Dubai Property Investment :: Repossesions?

The 1st public auction of reclaimed mortgage properties is anticipated to be held the month after next at the Dubai Land Department Offices. Despite numerous statements claiming that there were no foreclosures in Dubai,we reported on this phenomenon at the beginning of 2009, but with no laws in place and numerous hastily produced new laws - at last some repossessions will - maybe - come to market. Navigating strict Sharia laws against money lending with interest and "unusual" private property laws seems to have been the delay. As interest cannot be charged, and no one in the past having dared not to repay a loan, it will be interesting to see how this plays out.

The Dubai Land Department has begun to appraise the repo'd mortgage properties for public auctions, suggesting that they can shortly announce the date for its first public auction of these properties, related Dubai-based legal company, Al Tamimi at a convention held yesterday. Talking with this paper at the convention titled 'The Changing Landscape of Property Laws, Property Finance and Enforcement in Dubai', Jody Waugh, Partner, Al Tamimi, asserted : "We forecast the 1st public auction to be held in a month's time."

But we aren't sure since it is summer time. "We have received the first analysis from the on a property that'll be in public auctioned. It's an official analysis from the Land Department. Hence I think we are near to our first public auction under the mortgage law. "so far as any notification of the statement of the first public auction from the DLD is concerned it still is to come thru. Now, we have just received the 1st evaluation. " Al Tamimi said around ten of its properties have been accepted by the Execution Dept at the Dubai Courts to be generally auctioned. Waugh said Al Tamimi is at present providing the DLD the small print of the property. "We are working with them to keep the details in place and after they have all of the mandatory info, they'll announce the 1st date of the general public auction, " he asserted. "with regard to all of the information needed to be given to the DLD, we have just about all we want to share the info. "Hopefully, it will occur soon, " he revealed.

Al Tamimi recounted the evaluated price of the property has been set at current market costs and will serve as the reserve price at the public auction bidding, which should be held at the Land Department itself. "The DLD has an Analysis Office and they see what the existing market analyses are, " announced Waugh. He announced in the case of developers repossessing properties, they are able to repossess them and take possession, but in case of banks, they must go thru the method of public auction. Goodness knows what "market value," will look like - property prices have fallen drastically since the mortgages were written on most of these properties, and I suspect any outstanding monies will still be due after the property is snatched and sold.

Certainly the amount of investment property for sale in Dubai is quite staggering at the moment, so hard to predict what sort of prices these may achieve.

He revealed the Execution Office set up at the Dubai Courts has enabled rapid approvals for the properties to be generally auctioned. "there aren't any cases heard at the Execution Dep."

They only look at your documents and based mostly on your notice, your title and your mortgage, they are going to give you an order for execution to sell the property. This order needs to be submitted to the DLD for enabling the general public auction. The DLD won't act without the order of the Execution Department, " declared Waugh. "We had ten successful judgments and these properties will go to public auction, " said Waugh. Talking at the convention, Waugh said time-lines for judgments on mortgaged properties have improved given the mortgage law prepared.

"From the time of submission to getting judgment, we are looking at an one month period with excluding the notice period. Al Tamimi and Company claimed generally a special legal council is established pursuant to a decree issued by the Ruler of Dubai to address certain cases or matters. The legal company published some details of special committees set up : Rebounded Checks and Powers of the Council ( Decree fifty six of 2009 ) This panel has the exclusive jurisdiction to decide grumbles filed for rebounded checks related to properties' transactions ,eg sale and long-lease. It has no capableness over rebounded checks related to monetary exchange like checks issued by the purchaser to the bank / banker.

Special Legal Council to cope with cases filed against Amlak / Tamweel This deals with claims and cases filed against Tamweel and Amlak only. It's not competent to address cases filed by Amlak and Tamweel against 3rd parties. This panel has no jurisdiction over rental disputes and claims before settlement. Whatever happens -  property investment in Dubai is going to be a different beast to the past few years and the property investment loan rates are likely to be usurious. Sorry - I mean the "fee" for lending, or however it works now. As I understood it - it was originally going to be a profit sharing system of some kind when the money was lent for commercial ventures and a convoluted "rent back" scheme for private home purchases, whereby the bank charges interest in the form of a partial rent payment - thus avoiding the strictures against charging "interest" by calling it "rent" instead. Presumably whichever higher power is in charge of monitoring these things is unable to tell the difference.