Off-plan buyers tell Brid-Aine Conway proposed legislation is unlikely to get them compensation for current issues
Investors yesterday questioned whether the new property laws under consideration would have any effect on their own situations or the current property market, but said they would help future buyers.
"I have great reservations that the law will not be strong enough," Alex George told 7DAYS.
George bought a villa in Jumeirah Village Triangle from developer Nakheel, which has been delivered, but was delayed by 11 months.
"The villa I purchased was completed eight months prior to the handover and no reason was given for the delay," he said.
In an interview with Lisa Dale, a senior partner at law firm Al Tamimi and Company, published on Sunday, Emad Eldin Farouq, senior legal adviser at the Dubai Land Department outlined the legal priorities for the department and the Real Estate Regulatory Authority (RERA), including a law to help protect investors.
One aspect of the proposed law is the possibility of financial penalties for developers who deliver properties late.
Jamal Sirhi, an investor in Schon Properties' Dubai Lagoon project, was also concerned with the strength of the proposed legislation.
"These are good laws but if they don't get implemented, what's the use?" he asked.
On Sunday, Farouq said the land department would "seek to fully enforce regulations against developers, brokers and any others found to be in violation".
The Land Department is also considering detailing regulations to help clarify the so-called Strata Law, which covers multiple ownership within a development and allows Owners' Associations to be set up.
This law came into effect in March 2008, but has been difficult to understand and implement without detailed regulations to support it.
George welcomed further clarification of the Strata Law and hoped that it would be expanded to cover a wider range of developments.
"Because [Jumeirah Village Triangle] has independent villas as opposed to units within a building, setting up an Owners' Association at this stage is very difficult because the Strata Law has not made allowances for individual villa owners and therein lies a significant problem," he said.
Sirhi and George both felt that getting any compensation for their issues from developers would be difficult for a variety of reasons and may not be worth pursuing.
Sirhi said he now felt that direct dialogue with the developer was the best step forward rather than seeking a third party solution like court action.
George said he thought the likelihood of getting compensation from a developer that is having liquidity issues, as Nakheel is, were slim.
He also questioned the value of having the laws act on older cases after they come into force.
On Sunday, Al Tamimi's Dale told 7DAYS she anticipated that "inves-tors with current contracts would be able to avail of the new provisions going forwards".
George said that "the market would be flattened" if every purchaser of off-plan properties in the last few years could act on these laws.
Investors that 7DAYS spoke to also felt that, in the long run, the laws would have a positive effect.
Sirhi said that the laws would help to restore confidence in Dubai's property market.
"It will make a difference for the future, for people who start investing two to three years down the road," he said.
Sirhi also pointed out that current investors should have entered into their off-plan contracts with a full knowledge of the laws of the emirate at the time.
"As much as we are frustrated with developers, I believe it's also our risk. We went into this and knew the risk... we went into it without the rules and regulations," he said.
Laws under consideration
Conversion of Granted Title to Freehold Title
A draft decree is being considered which, if passed, will enable hold-ers of granted land titles, who are usually UAE nationals, to convert their title to freehold after paying a fee that is a percentage of the market value of the land
Protection for Purchasers of Off-plan
This law proposes a number of regulations including:
Financial penalties on developers who deliver properties late
Grounds for cancellation of contracts, for example if the developer does not link payments to cons-truction or if the developer makes material changes to the property
Giving investors a refund or rep-lacement if properties are defective
Strata Law Regulations
The Dubai Land Department will shortly issue the General Regul-ation, Jointly Owned Property Declaration Regulation and Survey Regulation, most likely in the form of guidelines. The standard form of Owners Association Constitution is still awaited
Regulations of Real Estate Professions
Adding real estate conveyancers lawyers who specialise in helping with buying and selling property and land and real estate valuers to the list of registered and regul-ated professions
© 7Days 2010
