New Regulations to Protect Buyers in Dubai
New regulations covering off-plan sales of real estate are to be issued soon to prevent developers from charging registration fees
The Dubai Lands Department said the rules would set out clear mechanisms and procedures - and officials hope they will reduce the number of disputes between developers and buyers.
"Some off-plan projects are not executed for a number of reasons, which leads to disputes," Director-General of the Department, Sultan Butti bin Mijrin, told Emirates Business.
"Buyers complain to the Lands Department but we do not have sufficient data on the project, which means a loss of rights for the buyer."
Mijrin said the regulations, currently being drawn up by the Dubai Government's legal advisers, would prevent real estate developers from imposing registration fees on customers when they buy a property or sell it.
But developers would still be allowed to charge administrative expenses when ownership is transferred from one person to another provided the fee was fixed rather than a percentage of the value of the property.
Most real estate developers in Dubai charge buyers around two per cent of the property value when ownership is transferred. Some, however, charge as much as six per cent.
Hundreds of property transfer requests are waiting for approval by some major developers who have received letters from the Lands Department telling them they should not charge a percentage.
The regulations will, in addition, set out the procedures that developers should follow before offering their projects to the public.
Mijrin said Dubai's real estate market had matured but was still growing at an accelerating pace, offering many promising opportunities for both developers and buyers.
"The department is keen to be at the forefront of efforts to organise real estate procedures and to urge workers in the sector to provide more professionalism and transparency. The sector has recently witnessed several legislative developments," Mijrin said.
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Comments on New Regulations to Protect Buyers in Dubai
I agreed in Sept 2007 to purchase an apartment in Kensington Manor from a Devoloper on a payment schedule based on completion date March 2009 that influenced me on the purchase agreement. I ghave already paid 65% of the money and honoured the payment BUT now I was told the work has not begun & the completion date is not known. Still they are demanding the money and levying interest on the original payment schedule which I feel is no more valid as they have not honoured the ancipated cpmpletion date March 2009. Now all our hopes are shattered as we do not know where we stand with this devoloper who is demandeing for the balance payment and not informing us the present situation and the revised anticipated completion date. Could you please advice. Thank you. Nizam Ismail
Hi Nizam -
Sorry to say, I can’t really help much. This is happening all over Dubai. There is one group that has got together in an effort to challenge the developers. There are a few discussions here that might help:
http://www.dubaiforums.com/
In the meantime, if you would care to send me copies of any letters you have received from the developers, I would be happy to write a story about it and attract attention in that way. You can contact me here:
http://internationalpropertyinvestment.com/contact-ipi