Full Refunds For Incomplete Dubai Property Developments

Dubai’s Real Estate Regulatory Authority have confirmed that property investors who have bought property off-plan in development projects that have now been cancelled are eligible for full refunds.

Under Law No 9 of 2009, if a government review demonstrates that the development has officially been cancelled, all cash paid by the property buyers will be returned to them by the developers as soon as the contract is terminated. This is good news as the law will hopefully provide more clarification over the termination of purchase and sale agreements for off-plan property. Over the past few months there had been increasing concern about the number of developers who had been paid money for off-plan properties but who had failed to start building them with no solid plans to start building works in the near future.

The law is actually a sliding scale that shows how much purchasers can expect back dependent on the amount of building work that has actually progressed on a site. Currently there are around 800 projects being examined to determine their progress.

The legislation also means that all contract terminations must be passed through the Dubai Land Department and property purchasers have 30 days to rectify a breach.

The sliding scale currently says:
– If a property development is 80% or more complete, the purchaser is not due any cash back
– If a property development is 60-80% complete, the purchaser loses 40% of the purchase price
– If a property development is less than 60% complete, the purchaser loses 25% of the purchase price.
– If a property development has not yet begun, the purchase loses 30% of the amount paid to date, however if the development then gets official cancelled by RERA, all monies paid to the developer will be refunded.

RSS Feed for This Post3 Comment(s)

  1. dubai property | Jul 4, 2010 | Reply

    It’s a good news for Dubai property investors and it would help foreign real estate investors to regain confidence in Dubai property business. It’s an appreciable step taken by Dubai authorities.

  2. Seb Duncan | Jul 29, 2010 | Reply

    What if a deposit has been paid do I get the deposit back according to the above sliding scale or do I get the full amount back?

    Thanks

  3. Dubai Pearl | May 22, 2011 | Reply

    Thanks for your informative post. I have high regard for the valuable information you offer in your Articles. I really believe you will do well in the future. Thanks a lot.

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