Developers allowed to sell only after 20% of project is completed

Property investor protection law by June 2012, says Dubai Land Department

20 April 2012
Dubai Government, represented by the Dubai Land Department, will issue a new law to organise the relationship between real estate investors and developer during the construction of projects, in June reported Al Bayan newspaper.

According to Sultan Bin Mejren Director General of Dubai Land Department, the new law will be the first of its kind devoted to the protection of a specific segment of investors and ensuring their rights.

"The department has completed the finalisation of the draft law on the protection of the real estate investor. It is expected to be passed [soon] and applied by the end of June."

He added that the final version of the law covers all the key stages of a real estate project. The law regulates the process of starting the project by ensuring the reliability of the developer and eligibility to carry out the project. It requires checking the legal status, and monitoring implementation of construction.

Developers will not be allowed to proceed with the sale before completion of 20 per cent of the project.

Developer protection bias

Bin Mejren disclosed that the department completed a comprehensive study of the real estate market in Dubai. It concluded that most of the existing legislations focused on protecting the developer, while there is no similar legislation for the protection of a real estate investor.

"The real estate investor protection law in Dubai, when it is released and implemented, will be the first law of its kind in the country and the world dedicated to the protection of the rights of a certain category of investors," he added.

The law is one of the department's mission that is part of the Strategic Plan of the Government of Dubai.

He stressed the importance of this step to protect and preserve the rights of real estate investor.

He said the new law is aims to protect real estate investors by achieving the required balance between the interests, rights and duties of the investor and the developer.

The new Act addresses all stages of investment in real estate - from the planning stage of the project and announced to the construction phase and delivery.

It regulates the contract process between the developer and the investor to ensure the rights of the parties.

It also regulates the delivery process to ensure conformity with the specifications mentioned in the contract concluded between the parties.

Also the new law organizes the process of re-selling the property.

Four stages

The new Law has outlined four stages that cover the rights of the real estate investor.

The first phase is based on providing data and determining the rights and obligations, and to provide data and accurate information on investment opportunities through the department and brokers.

The second stage of the contract communicates with developers authorised to conclude a real estate investment agreement.

The third stage organises delivery and maintenance where the investors receive the real estate and ensure its conformity with the specifications, and the fourth and final phase is the stage of sale or investment.


The final version of the law did not discuss any penalties or fines on violators.

Bin Mejren said that penalties and fines come as a result of irregularities while the law focuses on the organization of the steps and procedures in advance to prevent irregularities (defensive protection).

Bin Mejren pointed out "the real estate market in Dubai witnessed in the past two years.

He expected the market to continue its strong recovery, encouraging investors to increase their investments in real estate in the emirate because of its high levels of confidence, stability and commercial appeal.

© Emirates 24|7 2012


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