Contractual and legal obligations of the real estate developer


* What are the causes of real estate disputes between the developer and the buyer?

UAE law allows the issue of real estate ownership, and any citizen or investor can contract to buy a real estate unit within the luxury and multiple residential development projects that a real estate developer in Dubai or the rest of the Emirates put forward according to well-known contractual procedures, but this real estate developer may cancel the project after it occurs From investors, payment of the value of the units sold, and this results in real estate disputes that reach the courts, as breaching the terms of the contract is one of the main reasons that lead to real estate disputes.

* What is the law regulating the relationship between a real estate developer and a buyer?

Regulating the initial real estate relationship between the real estate developer and the buyer in the Emirate of Dubai and the amendment of the executive regulations in this regard stated in Law No. (13) of 2008, and Law No. (8) of 2007, where the real estate developer is obligated under the contract between him and the buyer to build Real estate units on land he owns, or has the right to build on, and transfer its ownership to the benefit of buyers according to the agreed specifications and dates, in return for the buyer’s commitment to pay the financial installments according to what is agreed upon and according to the stages of completion.

This type of sale is called (off-plan sale) and it is a modern method with which common interests are achieved for both parties of the real estate relationship, as the buyer can purchase the real estate unit in installments commensurate with his financial ability, and allows the real estate developer to obtain the necessary financing for the establishment and implementation of real estate projects through what he pays Buyers of installments without the need for bank borrowing and the necessary exorbitant interest.

The buyer begins to pay the installments that he committed to pay to the developer, and based on the contract, a time limit is set for the delivery of the property subject of the contract, but the buyer may be surprised to cancel the contract by the developer for many reasons, and so that the buyer does not fall victim to that, the legislator and by adding paragraph (b) of Article (11) of the law, which was recently amended by Law No. (19) of 2017 amending some provisions of Law No. (13) of 2008 regulating the initial real estate registry in the Emirate of Dubai to fill such loopholes.

The law stipulated that these procedures and rules should not be applied except to the off-plan land sale contract, and the sale remains subject to the provisions of the contract concluded between its parties, and they apply to all (off-plan sales) contracts, whether those concluded before or after the implementation of this law and are invalidated in the event of non-compliance. adhere to it

These rules do not preclude prejudice to the buyer's right to resort to court or arbitration, in case the real estate developer abuses the powers granted to him under this article.

* What happens if the project is canceled with a reasoned decision from the developer?

The above law included a provision that in the event that the real estate project is canceled by a reasoned decision from the Real Estate Regulatory Agency, the real estate developer, in this case, must return all amounts received from buyers, in accordance with the procedures and provisions stipulated in Law No. (8) of 2007 regarding escrow accounts Real estate development in the Emirate of Dubai, this law requires the account custodian to take the necessary measures to preserve the rights of depositors to ensure the return of the amounts paid from them in the event of any emergency circumstances resulting in the failure to complete the real estate project, including the cancellation of the project by the Real Estate Regulatory Agency.

* What is the buyer entitled to in the event of abuse by the real estate developer?

Paragraph (f) of Article (11) of the law gives the buyer the right to resort to the judiciary or arbitration in the event of the real estate developer’s abuse of the procedures and measures that this article allowed him to take against the buyer in the event of a breach of his contractual obligations - we had referred to this in an article Previous - This falls within the framework of the legislator's keenness to achieve a balance between the interests of dealers in the real estate sector and to protect their legal positions and their acquired rights.

The rules and procedures that have been enacted in the interest of the real estate developer when the buyer breaches his contractual obligations do not mean that the developer’s powers, in this case, are absolute and free from the supervision of the judiciary without accountability, censorship or scrutiny. If it is proven that the real estate developer has infringed on the rights of the buyer and abused the powers granted to him under this article.

* Friendly Endeavors and Legal Action

Gradual conflict resolution is a strategy followed in the UAE and may be used in the event of a conflict that may result from a real estate project not being completed on time.

The contract amicably is resorting to filing lawsuits against the judiciary.

The Dubai Property and Land Department can intervene at the request of one of the parties, and conduct an amicable settlement between the real estate developer and the buyer in the event of a legal dispute.

Caused by the real estate developer or the Real Estate Regulatory Agency, as a result of negligence, fraud, or misuse of funds, the real estate developer must return all amounts received from buyers.

The buyer who was harmed by not receiving the property in dispute can initiate legal litigation procedures by sending a legal warning to the real estate company that did not fulfill the terms of the contract concluded between it and the buyer, as a procedure that preserves his right, and then start the procedures for filing a lawsuit, to recover the amounts he paid as installments, in addition to Compensation, attorney fees, and obligating the real estate company to pay all expenses.


* What happens if the real estate project is canceled?

The Canceled Real Estate Projects Committee was established by the Dubai Land Department (DLD), which is a committee specialized in supervising canceled projects. If the project is canceled, it will be listed with the Canceled Real Estate Projects Committee.

The Dubai Land Department will take disciplinary steps against the real estate developer who violates the laws and executive regulations governing real estate in the emirate, especially in matters related to real estate that has not been completed or stopped.

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