Dubai has attracted lots of investment in the real estate sector thanks to the off-plan projects with excellent prospects. While these off-plan properties offer several benefits, investors must take into account the laws for buying off-plan properties in Dubai. The rules and regulations include the considerations in case of a delayed project or payment.
One must learn the rules for buying an off-plan property in Dubai. These laws are important when you are considering off-plan property investment. Let’s go through the detailed laws here.
Rules and Regulations for Interim Real Estate Registration
Effective tools, such as the Oqood system, guarantee the rights of off-plan investors and real estate developers. The laws for buying off-plan properties in Dubai include the responsibilities of real estate developers and buyers. For instance, laws include payment plans and schedules.
Here are all the laws and regulations that ensure the off-plan sales agreement terms, timely payment of instalments, construction of the projects and transfer of ownership.
Failure to Fulfil Obligations Mentioned in the Contract
When the buyer doesn’t fulfil their obligations according to the agreement, developers must inform the Dubai Land Department (DLD). The developer must fill out the form and mention the following details:
- Developer and purchaser information
- Description of the Real Property Unit
- Breached contractual obligations
The DLD provides a 30-day written notice to the obligator and provides a resolution to resolve the dispute between the buyer and developer. After settling the issues, the buyers and developers must add the settlement to the sale purchase agreement as an addendum, according to the laws for buying off-plan properties in Dubai.
Failure to Comply With the DLD Notice
Once the given notice period expires, the DLD gives preference to the developer. It issues a document confirming the developer’s adherence to the sales agreement. Besides, the Real Estate Regulatory Agency (RERA) Dubai calculates the project completion percentage to give a fair ruling according to the rules and standards.
Measures for Developers
After maintaining the agreement and RERA’s rulings, the laws for buying off-plan properties give developers the following rights:
Project Completion Is 80% or More
- Developers can keep the agreement with the buyer.
- Retain the amount paid by the buyer and claim the remaining balance according to the completion of the project.
- The developer can request DLD to sell the property via auction.
- They will receive the remaining amount of the property, whereas other DLD registration fees will be incurred by the buyers.
In the case where the developers unilaterally terminate the sales purchase agreement (SPA), they can retain 40% of the project’s value. Besides, the real estate developer must pay the remaining amount within one year or sixty days after selling the property to a new buyer.
Project Completion Is Between 60% and 80%
If the real estate developer in Dubai has completed the project above 60% and less than 80%, they can keep 40% of the real estate’s value in case of the purchaser’s failure. Besides, they must refund the remaining amount within one year. Meanwhile, if the property is sold, the amount must be returned to the previous buyer within 60 days.
Project Completion Is Below 60%
According to the laws for buying off-plan property in Dubai, the developers can terminate the agreement if the project has started. However, they can keep 25% of the off-plan unit’s value. Plus, the remaining amount must be paid in the stipulated time frame mentioned above.
Project Hasn’t Commenced
When the developer hasn’t started the project, and the reasons are beyond his control, they can terminate the contract. Besides, they can retain 30% of the amount paid by the buyers. However, the remaining amount must be returned in the same time frame as the one mentioned above.
Cancellation of Real Property Project by RERA
If RERA decides to cancel the real estate project due to a delay in the completion of the off-plan property, the developers have to refund the buyers according to the off-plan property buying law in Dubai.
Off-Plan Property Dispositions
The law for buying off-plan property in Dubai mandates that any disposition related to a real property unit sold off-plan must be recorded in the Interim Property Register.
Commencement and Approval Requirements
Master Developers or sub-developers can’t commence off-plan sales without obtaining possession of the land and necessary approvals from competent entities, such as DLD.
Regulation of Fees by Developers
Developers must not charge fees on completed or off-plan property units except for administrative costs approved by the DLD. This provision safeguards buyers from potential exploitative practices while allowing reasonable administrative charges.
Completion and Registration Process
Developers must enter completed projects in the property register upon receiving completion certificates from competent entities. The Department has the authority to register property units sold off-plan in the name of purchasers, ensuring a smooth transition from interim to permanent registration.
Involvement of Real Estate Brokers
When developers opt to market their projects through real estate brokers, they must contract with certified brokers in Dubai and register the agreement with the Department. It introduces an additional layer of accountability and professionalism in the marketing process.
Approval Requirements for Private Sale Contracts
Developers or real estate agents can’t enter into private sale contracts for off-plan properties without approval from competent entities. Contracts entered into before obtaining such approval are null and void, emphasising the necessity of regulatory clearance.
FAQs
Is it risky to buy off-plan in Dubai?
While the market value of the properties can fluctuate, Dubai has a steady real estate market. Therefore, buying off-plan property doesn’t have many risks. However, buyers must learn the checklist before buying off-plan property.
What are the benefits of off-plan property?
Investors have several benefits of buying an off-plan property. With flexible payment plans in Dubai, one can create an asset. Besides, these off-plan projects will yield an impressive ROI after completion.
These were all the laws for buying off-plan properties in Dubai. If you buy a property in Dubai which is off-plan, ensure that you learn the laws and adhere to those regulations. Moreover, you can explore the popular areas for buying off-plan properties in Dubai.
One can follow the guide to buying off-plan properties in Dubai to avoid any discrepancies. Besides, investors must fulfil the obligations specified in the contract.
Stay tuned to the dubizzle Real Estate blog to learn more about laws and regulations for buying and renting properties in the UAE.
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