Saturday, November 11, 2017

Sheikh Mohammed amends law on Interim Property Registration in Dubai

In his capacity as Ruler of Dubai, the UAE's Vice President and Prime Minister, His Highness Sheikh Mohammed bin Rashid Al Maktoum, has issued Law No. (19) of 2017 partially amending Law No. (13) of 2008 on Interim Property Registration in Dubai. The amendments aim to protect real estate investors and developers.

The new Law amends Article (11) of Law No. (13) of 2008, which specifies policies and procedures that will be applied in cases of breaches of sale contracts by the buyer. The Law specifies that in such an event, the developer must notify the Dubai Land Department (DLD). Once the notification is received, the Department must give a 30-day notice to the purchaser. The notice must be dated and given in writing and delivered to the purchaser directly by registered mail, electronic mail or any other method specified by the Department. If the developer and buyer reach an amicable settlement, it must be added to the sale contract and signed by both parties. If the buyer fails to fulfill contractual obligations or accept an amicable settlement, the Department may issue an official document stating that the developer has fulfilled his legal obligations, specifying the percentage of completion of the property.

After the developer receives this document from the Department, the developer is free to take any of the following actions: If the percentage of completion is over 80%, the developer can ask the purchaser to abide by the terms of the sale contract, confiscate the paid amounts and obligate the buyer to make the remainder of the payment specified in the contract or otherwise request the Department to auction the property to collect the remaining amount. The buyer is also obligated to pay any expenses arising from the auction. The developer may also void the sale contract solely, retain up to 40% of the sale contract’s value and return the remaining amount to the buyer within a year of the date of contract cancellation or within 60 days of the date of re-selling the property, whichever is earlier.

If the percentage of completion is between 60% and 80%, the developer may void the sale contract solely, retain not more than 40% of the sale contract’s value and return the remaining amount to the purchaser within a year of the date of contract cancellation or within 60 days of the date of re-selling the property, whichever is earlier.
If the percentage of completion is less than 60%, the developer may void the sale contract solely, retain up to 25% of the sale contract’s value and return the remaining amount to the buyer within one year of the date of contract cancellation or within 60 days of the date of re-selling the property, whichever is earlier.

If the developer did not initiate the work on the property for reasons beyond his control and without negligence, the developer may void the sale contract solely, deduct not more than 30% of the paid money and return the remaining amount to the purchaser within 60 days of the date of re-selling the property, whichever is earlier.

According to the new Law, if the project is cancelled by a resolution from RERA, the developer must refund all payments made by the buyer, pursuant to Law No. (8) of 2007 concerning Escrow Accounts for Real Estate Development in Dubai.

Pursuant to the new Law, the procedures prescribed in Article (11) of Law No. (13) of 2008 are not applicable to land sale contracts. Such a sale remains subject to provisions stated in the sale contract.

This Law annuls any other legislation that contradicts or challenges its articles and is valid from the date of its publication in the Official Gazette.

Wednesday, May 24, 2017

U.A.E Visa Rules and Regulations: UAE’s non-Muslim expats now register a will

U.A.E Visa Rules and Regulations: UAE’s non-Muslim expats now register a will:

Non-Muslim expatriates can now dictate where they want their assets to go when they die, after a decision to change rules governing wills. The changes will ensure there is no dispute or confusion over a deceased’s belongings and custody of children, and expats can register a will for about Dh500.

Abu Dhabi has had no way of registering wills drafted in the UAE or an expat’s home country.

Wednesday, February 15, 2017

U.A.E Visa Rules and Regulations, Labour Law: Unified rental contract from March 2017 in Dubai

U.A.E Visa Rules and Regulations, Labour Law: Unified rental contract from March 2017 in Dubai:

From
next month March 2017 onwards, all of Dubai's property lease contracts
will have a unified structure, according to the Land Department. The
"Unified Lease Form" is designed to "regulate relationships between all
parties involved in such transactions and guarantees the rights of all
parties," the agency said.
Landlords
will have to download and print contracts from the Ejari website and
must provide assurance that all items included within are based on a
legal framework that regulates the transactions. Items within the
contract will thus be governed by applicable laws, including those
related to rents.
If
any omissions are subsequently found, there is provision for penalties
to be applied. Parties to the contract agreement should agree on the
items before signing the lease.
According
to Hamdan Al Madhani, Director of Rental Relations Regulatory
Department, “The applied unified lease form primarily depends on the
legal system, and having unified contracts between the parties
guarantees the rights of all stakeholders involved.
“The
Rental Affairs Sector carries the responsibility to apply the new
unified lease contract, in addition to registering leases and tracking
the real estate index."
As per Law No. (26)  (under
clause No. 16), the landlord is responsible for maintenance repair, and
repair of any damage or defect that may affect the well-being of the
tenant within the premises, unless otherwise agreed.
Therefore,
there cannot be a clause forcing the responsibility on one party alone.
Law No. (2) is one of the references used to draft the unified
contract. The document also refers to Law No. (33), which regulates the
relationship between landlords and tenants, specifically clause No.
(25), which specifies the cases that enable the landlord to request an
eviction.
These
can include subleasing of the property, or in the case of using the
property for carrying out prohibited or illegal activities.

Sunday, December 04, 2016

New rule on marketing properties in Dubai



Properties can be marketed and sold in Dubai only if there is a prior written agreement where the property’s owner authorises estate agents to carry out the marketing process.

This is as per new directives issued by the Dubai Land Department, and in line with earlier moves aimed at creating a more transparent transactional marketplace in the emirate.

Once the written agreement is in place, permits will be issued through the Real Estate Regulatory Agency’s e-service system. It will also apply to advertisements being placed to sell a property or project in Dubai.

All “real estate advertisement mechanisms will be regulated through this system, with Rera facilitating marketing agreements between the landlords and the brokers through its Form A,” said the statement.

“The property owner is required to sign Form A to authorise brokerage offices to market any properties, in order for any broker to obtain permission from Dubai Land Department to represent properties for sale or for lease. The landlord is permitted to deal exclusively or with more than one real estate broker for the marketing of any property.”

According to Ali Abdullah Al Ali, Director of the Real Estate Licensing Department at the government entity, “We regulate the process of advertisements within a specific agreement that defines the role of each party involved in any real estate sales or rent with total precision, which will guarantee the rights of all parties, including landlords, investors and brokers.”

Recently, the Land Department Authorised that marketing of all overseas properties too should have prior clearances before they can be showcased in Dubai. This applies to any marketing exposure across all advertising platforms.

   
  

Thursday, June 23, 2016

Off-plan property investors can get full refund - Dubai Court ruling

A property purchaser whose sale and purchase agreement was terminated for non-payment and the property is re-sold by the developer without a court order, can file a claim to recover the amounts paid, according to a judgment by the Dubai Court of Cassation.
In a report titled ‘Terminating a contract for an off-plan’, law firm Hadef and Partners said the Dubai Court of Cassation found that going through the Article 11 Cancellation Process was not sufficient to give the developer the right to repossess and to sell the unit, and that a developer still needs to file a civil claim and to obtain a court order for the termination of the existing contract.
“The court took the view that the Article 11 Cancellation Process are simply a set of administrative guidelines/recommendations and they do not override the general requirement that a court should determine the matter and decide whether or not the contract is to be terminated due to the purchaser’s default,” Walid Azzam and Karim Mahmoud wrote in the report.
This general requirement is found in Article 267 of the Federal Law 5 of 1985 (‘the Civil Code’), which provides that a contract can only be terminated “by mutual consent [of the parties], court order, or under a provision of the law”, they said.
The Court of Cassation was reported to have said that if a developer re-sold a repossessed unit; the purchaser (even if he was in default) may be able to recover the payment(s) he made.
“Given the recent ruling, the developer’s actions in repossessing the unit and reselling it constitutes a unilateral termination of the contract, so making the developer liable to repay any amounts received from the defaulting purchaser,” the lawyers said.
In the court’s view, Article 11 Cancellation Process is just an administrative step which is separate from obtaining the court’s approval to the termination of the contract.
The law firm further mentioned that in case of a defaulting purchaser, even if the developer is able to de-register the unit from the interim register prior to re-selling that particular unit, it would be strongly recommended to file a claim against the defaulting purchaser to implement the compensation provisions of Article 11 and to secure a court order for the termination of the contract.
The Dubai Land Department (DLD) cancellation process arises out of Law No. 13 of 2008 regulating the Interim Property Register in Dubai (Law No. 13), which was later clarified and amended by Law No. 9 of 2009 (Law No. 9). The revision of Law No 13 by Law No. 9 was intended to set up a clear termination mechanism and to provide guidelines in case purchasers stopped making their contractual payments.
It also established a specific compensation mechanism that correlates to the construction level of the project at the time of the purchasers’ default. Law No. 9 also made the specific article, Article 11, apply retrospectively.
Article 11 of Law No. 9 provides that:
1.  In the event the purchaser shall be in default of any of the terms and conditions of the contract for the sale of a real estate unit entered into with the developer, the developer must notify the DLD of such default. Thereupon, the department shall give the purchaser, by hand, registered post or e-mail, a 30-day notice to fulfill his contractual obligations.
2. If at the end of the notice period stipulated in the preceding paragraph the purchaser has not fulfilled his contractual obligations, the following provisions shall apply:
a. In case the developer has completed at least 80 per cent of the project, the developer may keep the full amounts paid and request the purchaser to settle the remaining amount of the contract price. If   this was not possible, the developer may request that the property be auctioned in order to collect the remaining amounts due to it.
b. In case the developer has completed at least 60 per cent of the project, the developer may revoke the contract and deduct up to 40 per cent of the purchase price of the real estate unit stipulated in the contract.
c. In case of projects where construction commenced, but did not reach 60 per cent, the developer may revoke the contract and deduct up to 25 per cent of the purchase price of the real estate unit stipulated in the contract;
d. In case of projects whereat construction has not yet commenced for reasons beyond the developer’s control without any negligence or omission on its part, the developer may revoke the contract and deduct up to 30 per cent of the total amounts paid by the purchaser.
Based on this cancellation process, when a purchaser was sent a notice and did not rectify his position, the DLD traditionally de-registered the property from the interim register and re-registered it in the name of the developer.
The DLD cancellation process appears to have permitted developers to address issues related to losses from defaulting purchasers quickly and without having to go through a lengthy court process.
Likewise, the developer also had recourse under Article 15 of Executive Council Resolution No. 6 of 2010 to apply to the courts in the event the monies paid by the defaulting purchaser did not meet the thresholds outlined in Article 11, and to claim for the balance.
“Generally, these laws appear to provide a balance between the needs of developers (who are harmed by both defaults and having to wait for a court judgment to recoup losses) with the interests of purchasers (who stand to have a part of their deposits returned to them).
“However, due to a recent Dubai Court of Cassation judgment, any developer considering terminating a contract through the DLD for lack of payment now faces a great deal of uncertainty,” the lawyers said.