Developer Schon Properties yesterday welcomed the proposed new laws that the Dubai Land Department and RERA are considering to help protect investors.
Executive director of Schon Properties, Sonia H Schon told 7DAYS that the new laws were "the best approach and the most fair".
The new laws were explained by Emad Eldin Farouq, senior legal adviser at the Dubai Land Department, in law firm Al Tamimi and Company's latest newsletter, reported on Sunday.
Farouq said the department and the Real Estate Regulatory Authority (RERA) were looking at grounds for the investor to cancel a contract, for example, if the developer does not link payments to construction or if it makes material changes to the contracted property.
Schon said yesterday that Schon Properties had "been on a drive to link our buyers to construction-linked payment plans and are fully supportive of this idea".
"It creates transparency and makes terms and conditions very simple for developers, buyers and contractors," she added.
Laws were also being considered to impose financial penalties on developers who deliver properties late and to give investors refunds or replacements if their property is defective.
Schon said "illogical refund requests should not be granted" but added that "all parties' interests should be fairly protected under the new law".
Developers Dubai Sports City and Damac said they would not comment on the new laws, while spokespeople from Emaar Properties and ETA Star were unavailable.
Matthew Green, head of research and consultancy UAE at CB Richard Ellis Middle East, told 7DAYS that the new laws would have a large variety of impacts on developers.
"Some of the more prominent issues we could expect to see include actions taken against developers who have either stalled or cancelled projects despite receiving payments," he said.
"These could include potential for compensation or in more extreme cases even cancellation of contracts.
As yet the recourse options are still a bit unclear and we await further details of the law to that effect," he added.
Green also welcomed the proposed legislation.
"Further regulation of the market can only viewed as a positive move," he said.
"It is essential that well-defined laws and regulations are in place in order to further the maturity of the local market, and also to offer clear signals to foreign and institutional investors that transparency issues are being addressed," he added.
Farouq also said that the Land Department would be releasing further regulations for the so-called Strata Law, which, among other things, allows for Owners' Associations for multiple owners.
The law was enacted in March 2007 but its full implications are unclear without suppporting regulations.
Green said yesterday that "the impact of Strata Title in terms of owners' associations is still to be fully realised and we remain in a transitional period in that regards".
"Further clarification from the Land Department is expected imminently," he added.
© 7Days 2010
