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Monday, August 22, 2011

Dubai Law No. 9 of 2009

Bringing back buyers or scaring them away

Recent developments in the ongoing dispute between owners and investors in Dubai is a new change of Dubai Land Department in real estate law, issuing a new law that is made as Law No. 9 of 2009. Especially when a decision Dubai Real Estate Court took the edge of misery investors, this law could knock them over and over. On the other hand, would the developers who were outraged by the decision to feel relieved now to see that buyers off plan now does not terminate contracts on their own. Seems at first glance, the new law, the conditions of reimbursement explained by a developer made to customers in other circumstances, but as a law that effectively disables buyer announces an agreement that is perceived.

The law states that the only way an investor be able to opt out of the agreement to take their case to the court by sound reasons. Another way out of the agreement is to Dubai Real Estate Regulatory Authority (RERA) request to cancel the project. In a market where investors were already feeling the heat, this law will probably continue to dampen the spirits, yet such a law was expected that buyers from exploiting the market, which has already prevented through a rough phase.

Act No. 09 of 2009 sets the rate of refunds, based on the total completion of the project. For example, if the developer is 80% of the project completed, the developer is not liable to pay back all the amount paid, and in case the investor defaults on the remaining amount, the developer may request for an auction of the property. 60% if the project was completed, developers can keep 40 percent of the purchase price. Less than 60% completion means 25% deduction, while keeping in case of no construction at all, the developer 30% of the total payment made by the buyer is. Note that in the first three cases, the relative proportion of the total purchase price of the unit, while in the last scenario (where no building took place) we have the total amount that the buyer has paid the developer speak.

Therefore, the buyer is obliged to give a certain amount if the project of Real Estate Regulatory Authority (RERA) is repealed. In this case, the developer has returned all amounts, without deduction, within one year of termination.
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