Executive Council Resolution No. (6) of 2010 plays a key role in shaping Dubai’s real estate market. It supports Law No. (13) of 2008 by outlining how the Interim Real Property Register should be managed. This resolution sets clear rules for developers, brokers and buyers. It also aims to increase transparency, protect buyer rights and bring more structure to off-plan property sales. As a result, it has helped build greater investor confidence in Dubai’s property sector and contributed to a more regulated and stable market. Here is all you need to know about this important regulation.
Executive Council Resolution No. 6 of 2010 in Dubai
This law was issued on February 14, 2010, by His Highness Hamdan bin Mohammed bin Rashid Al Maktoum, Crown Prince of Dubai and Chairman of the Executive Council. Here are the core insights.
Key Takeaways
- Registration compliance: Developers must apply for property registration within specified timeframes; late applications incur a fine of AED 10,000.
- Development preconditions: The commencement of construction and off-plan sales are contingent upon obtaining the necessary approvals and actual control of the land.
- Unit handover: Developers must transfer property units to purchasers who have fulfilled all their contractual obligations, regardless of any outstanding financial dues.
- Broker regulations: Real estate brokers must deposit sale proceeds into the project’s escrow account and cannot receive commissions until they do so.
- Area discrepancies: If the actual area of a unit is more than 5% less than the agreed-upon area, the developers must compensate the purchaser.
- Contract termination and refunds: Specific conditions under which contracts can be terminated and stipulations for refunding amounts to purchasers are outlined.
- Project cancellation: Real Estate Regulatory Authority (RERA) has the authority to cancel projects under certain circumstances, with provisions for grievance and refund processes.
Understanding the Resolution
Here’s the summary of Executive Council Resolution No. (6) of the 2010 articles. They provide a clear understanding of each regulation and its implications.
Article (1): Definitions
This article ensures that the terms used in the resolution align with those in Law No. (13) of 2008, maintaining consistency in legal language.
Article (2): Registration Compliance
Developers must apply for registration within the stipulated time. Even if the Dubai Land Department (DLD) does not complete the registration within that period, the developer is considered compliant. Late applications are subject to a fine of AED 10,000.
Article (3): Late Registration
If a developer applies for registration after the deadline, the DLD is required to register the legal disposition. However, it will impose a fine of AED 10,000.
Article (4): Preconditions for Project Implementation
Before commencing construction or selling off-plan units, developers must:
- Take possession of the land.
- Obtain a demarcation certificate.
- Obtain all necessary approvals from the relevant authorities.
Article (5): Project Denotation
The DLD must notify the real property registry that the land is designated for a development project governed by Law No. (13) of 2008. This entry remains until the project is completed or cancelled.
Article (6): Registration Application
Developers must submit registration applications in the format approved by the DLD, along with all required supporting documents.
Article (7): Unit Handover
Once the project is completed and a completion certificate is issued, the developer must transfer the unit to the buyer. This applies if the buyer has met all contract terms, even if some other payments are still pending. The DLD may register the unit in the purchaser’s name if the developer refuses to do so.
Article (8): Prohibited Charges
Developers cannot charge purchasers any amounts other than those approved by the DLD for legal dispositions of real property units.
Article (9): Fee Payment
Unless otherwise agreed, developers and purchasers are responsible for paying their respective shares of registration fees as prescribed by applicable legislation.
Article (10): Broker Involvement
If a developer wishes to market a project through a broker, the following conditions apply:
- The project must be registered with the DLD.
- An agreement must be concluded with a broker approved and licensed under Bylaw No. (85) of 2006.
- The marketing agreement must be registered with the DLD.
Article (11): Off-plan Sale Restrictions
Any off-plan property sale in Dubai made before obtaining approval for the project’s commencement and registration with the DLD is deemed null and void.
Article (12): Escrow Account Deposits
Brokers must deposit the sale proceeds into the project’s escrow account and cannot deduct commissions until they do so. Any contrary agreements are considered null and void.
Article (13): Area Discrepancies
If the actual area of a unit is more than 5% less than the agreed area, the developer must compensate the purchaser. The compensation is calculated based on the agreed price.
Article (14): Dispute Resolution
The DLD may undertake conciliatory efforts to resolve disputes between developers and purchasers. Any amicable settlement reached is documented and becomes binding upon approval by the DLD.
Article (15): Purchaser’s Default
If a purchaser fails to fulfil contractual obligations, the developer must serve a notice requesting fulfilment. If the purchaser does not comply within 30 days, the developer may:
- Retain a percentage of the amounts paid, depending on project completion status.
- Terminate the agreement and retain a specified percentage of the unit’s price.
Article (16): Developer’s Proof of Compliance
Developers who have not commenced construction cannot retain 30% of payments unless they prove compliance with all contractual obligations and that failure to commence is due to reasons beyond their control.
Article (17): Completion Confirmation
A technical report from a RERA-approved consultant confirms completion percentage. Completion of levelling works and infrastructure is considered as commencement of the project.
Article (18): Refunds
Developers must refund retained amounts to purchasers within one year from agreement termination or within 60 days from unit sale, whichever is earlier.
Article (19): Public Auction Sales
If a unit is sold in a public auction, the DLD can put the money into a trust account. After taking out the developer’s dues, the rest is given to the buyer.
Article (20): Purchaser’s Right to Terminate
Purchasers may seek court intervention to terminate contracts if:
- The developer refuses to deliver the final sale agreement without a valid reason.
- Payments are not linked to construction milestones.
- There are material deviations from agreed specifications.
- The unit is unfit for use due to defects.
- Other valid reasons are as per general legal rules.
Article (21): Reasons Beyond Developer’s Control
Circumstances beyond the developer’s control include:
- Expropriation of land for public interest.
- Government suspension for re-planning.
- Discovery of obstacles on the project site.
- Changes by the master developer affecting the project.
- RERA determines other reasons.
Article (22): Developer’s Negligence
Developers are considered negligent if they:
- Delay in taking possession of land or obtaining approvals.
- Sell off-plan without written consent.
- Delay in obtaining approvals for plans and designs.
- Delay in preparing the project for construction.
- Fail to provide the required information to RERA.
- Fail to register the project with RERA.
- Fail to disclose financial statements to RERA.
- Other grounds determined by RERA.
Article (23): Project Cancellation
RERA may cancel a project if:
- The developer fails to commence construction without valid justification.
- The developer commits offenses under the Escrow Law.
- The developer shows no genuine intention to implement the project.
- The land is withdrawn due to the sub-developer’s failure.
- The land is affected by planning or re-planning.
- The developer fails due to gross negligence.
- The developer expresses the intention not to implement.
- The developer is declared bankrupt.
- Other reasons determined by RERA.
Article 24: Grievance Against Project Cancellation
- A developer has the right to file a written grievance against RERA’s project cancellation decision within 7 working days of being notified.
- The grievance must clearly state the reasons for the objection.
- RERA must respond within 7 working days of receiving the grievance.
- If accepted, RERA will set specific conditions that the developer must agree to in writing.
- If rejected, RERA’s decision is final and cancellation procedures proceed.
Article 25: Post-Cancellation Procedures
Upon cancellation, RERA must:
- Prepare a technical report detailing the reasons for cancellation.
- Notify the developer via registered mail or email.
- Appoint a certified auditor (at the developer’s expense) to review financials and confirm what was paid, deposited and spent.
- Instruct the escrow agent or developer to refund due amounts within 14 days of cancellation.
Article 26: Insufficient Escrow Funds
If the escrow funds are insufficient to reimburse the purchasers fully, the developer must pay the shortfall within 60 days of the cancellation decision. RERA may extend this deadline for valid reasons.
Article 27: Failure to Refund
If the developer fails to refund the required amounts within the allowed period, RERA must take necessary legal actions, including referring the case to judicial authorities to protect purchaser’s rights.
Article 28: Enforcement and Publication
The Resolution No. 6 of 2010 Dubai law took effect on 14 February 2010. It must be published in the Official Gazette for official impact.
FAQs
Who must follow the Executive Council Resolution No. 6 of 2010 in Dubai?
Property developers, brokers and buyers must all follow the rules in this resolution.
Can a developer sell property before getting approvals?
No. Selling units off-plan before getting all approvals is not allowed and is considered void.
What does the Dubai Executive Council Resolution 6/2010 say about escrow accounts?
Brokers must put all sales money into the escrow account. They can’t take any commission before that.
That wraps up the details about Executive Council Resolution No. 6 of 2010 in Dubai. This law sets strong rules for Dubai’s real estate sector. It protects buyers, ensures fair sales and holds developers accountable. From registration to refunds and project cancellations, each step is clearly defined. By enforcing transparency and timely actions, the resolution builds trust in off-plan property deals and supports a stable property market.
If you’re interested in the new developments in Dubai, learning about the off-plan laws and regulations can come in handy.
Stay tuned to the dubizzle Real Estate blog to learn more about laws and regulations for buying off-plan properties in Dubai.
