Off-plan projects are considered an ideal investment opportunity, especially in Dubai’s ever-growing real estate market. Such projects require less initial investment and offer higher ROI after completion. However, in certain cases, the project might get cancelled before completion. Though the chances of off-plan project cancellation in Dubai are lower, it can happen. To cater to this, the Dubai government has drafted different rules and regulations.
Here is how to deal with cancelled off-plan projects in Dubai.
Who Declare Off-Plan Project ‘Cancelled’
Any project that has been terminated before its construction phase is completed is known as cancelled. The Real Estate Regulatory Authority (RERA) declares if and when an off-plan project is cancelled.
RERA can cancel off-plan projects for multiple reasons, including delays in construction, technical issues, changes in budget and economic problems. The issues are elaborated in Article 23 of Resolution (6) of the Executive Council of 2010.
How an Off-Plan Project is Cancelled
The cancellation of off-plan projects is divided into multiple steps mentioned below.
Step 1: Passing Resolution
RERA passed a resolution to cancel an off-plan project when witnessing any discrepancy in the development of the project. It can either be related to the construction timeline or the quality of materials used. Moreover, RERA has the authority to cancel projects for multiple reasons.
Step 2: Report Submission
Once the resolution for project cancellation has been passed. RERA is obligated to create a comprehensive report elaborating on all the reasons for cancelling the project along with proof.
Step 3: Audit
On the basis of the report submitted by RERA, an auditor is hired to verify the escrow account. The auditor’s fee is charged by the developer.
Step 4: Fund Reimbursement
After checking escrow account details, the developer is instructed to reimburse the amount to the buyer within 14 days of project cancellation. However, if the finances are short, the reimbursement period is extended to 60 days.
Step 5: Formation of Committee
A Cancelled Real Estate Projects Committee is formed to scrutinise all the off-plan projects cancelled by RERA. The Committee has a panel of at least three Dubai Court judges. That said, the Committee’s verdict is more difficult to appeal.
Ways to Deal with Cancelled Off-Plan Real Estate Projects
Along with RERA, buyers also have the right to claim reimbursement if an off-plan project is cancelled or delayed. Following are the ways to deal with a cancelled off-plan project as a buyer.
Check if the Property is Cancelled
The first step is to check whether the property is cancelled by RERA or not. For this, buyers can consult with the Dubai Land Department (DLD) through their official website or by visiting their office.
Submit a Petition
In case the property is officially cancelled by DLD, buyers are requested to show proof of purchase. This includes but is not limited to Sales and Purchase agreements and fund transfer proof. Once the proofs are submitted, DLD will invite buyers on the hearing day to initiate the process of reimbursement.
File a Court Case
The above-mentioned steps can be taken if the project is officially cancelled. If the project is not cancelled, buyers have the right to file a court case.
As per the Law 19 of 2017, buyers can file a court case against the developer. However, prior to filing the case, please remember that developers are provided with a grace period of one year to handover the project. Besides, if the delay in handover or construction is unexplained, buyers can file a case.
For further information, read our blog on how to handle delayed off-plan property handover.
FAQs
What are the buyer’s rights when facing cancelled off-plan projects?
Buyers get complete reimbursement when the project is officially cancelled by RERA. However, buyers can also file a case against the developer in case of delayed handover.
What are the laws for cancelled off-plan projects in Dubai?
There are different laws governing the cancellation of off-plan projects in Dubai. Here are the complete details regarding laws for unfinished or cancelled real estate projects in Dubai.
In how many days will buyers get the amount of cancelled off-plan projects in Dubai?
Initially, the developer is provided 14 days to reimburse all the amount to the buyers. If not, then the period is extended to 60 days.
This is how to deal with cancelled off-plan projects in Dubai. The incidents of cancelled off-plan projects are rare, mainly due to the strict rules and regulations implemented by the government.
This is one of the reasons that Dubai’s real estate market is showing an upward trajectory continuously. If you are also interested in availing these returns, browse through these properties for sale in Dubai to make an investment.
Besides, if you are new to the market, read through our Dubai Annual Sales Market Report 2023 for detailed market trends.
Stay tuned to dubizzle’s property blog for more information on upcoming off-plan projects in Dubai.
