Investing in off-plan properties has become increasingly popular in Dubai over the years. However, with the excitement of owning a new property, there are risks involved. One of the biggest concerns for investors is what happens if the developer fails to deliver the property. In this article, we will discuss the rights of buyers in such a scenario.
To begin with, it is important to note that in Dubai, any off-plan property sold by a developer needs to be registered in the Interim Real Property Register maintained by the Dubai Land Department (DLD). This ensures that developers comply with the necessary regulations and obtain the required approvals before selling any units off-plan.
Therefore, before investing in an off-plan property, it is recommended that buyers verify if the developer has registered the project with the DLD. This can be done by checking the DLD’s website or visiting their office.
In case the developer fails to deliver the property, buyers have the right to request that the developer fulfills their obligations as per the Sale Purchase Agreement (SPA). If the developer fails to comply, buyers can file a complaint with the DLD.
The DLD may attempt to settle the matter amicably between the buyer and the developer. If an agreement is reached, it shall be documented in a written agreement executed by both parties or their representatives. Once approved by the DLD, the agreement shall become binding to both parties.
However, if the developer still fails to deliver the property or refund the payments made by the buyer, the Real Estate Regulatory Agency of Dubai (Rera) may cancel the project on technical grounds. This may happen if the developer fails to commence construction work without a valid reason, if the authority is satisfied that the developer has no genuine intention to continue with the project, or if the developer fails to implement the project due to gross negligence.
In case the project is cancelled, the developer is obligated to refund all the payments made by the buyer. If the developer fails to do so, the Rera may take all necessary actions to preserve the rights of the buyers, including referring the matter to the competent judicial authorities.
Buyers may also approach the competent court in Dubai to seek termination of the SPA. However, developers may have protection under Article 21 of the Executive Council Resolution No. 6 of 2010 if the reasons for handing over of the property is delayed due to reasons beyond their control, such as the property being taken over by authorities in the interest of the public or if authorities suspend the project for replanning purposes.
In conclusion, investing in off-plan properties in Dubai can be rewarding, but buyers need to be aware of the risks involved. It is crucial to verify if the developer has registered the project with the DLD before investing in any off-plan property. In case the developer fails to deliver the property, buyers have the right to request that the developer fulfills their obligations as per the SPA. If the developer fails to comply, buyers can file a complaint with the DLD, and if necessary, approach the competent court in Dubai.