Guide to new laws for unfinished and cancelled projects in Dubai
Off-plan projects are considered highly lucrative investment opportunities in the UAE due to their potential to appreciate significantly once completed. However, delays and cancellations can occur in some rare instances, affecting the anticipated returns. The country’s government has established a comprehensive set of rules and regulations for managing unfinished or cancelled real estate projects to address these issues. Let’s look at Dubai’s new laws for cancelled projects.
DUBAI’S NEW LAWS FOR CANCELLED PROJECTS
The UAE’s Vice President, Prime Minister and Ruler of Dubai, His Highness Sheikh Mohammed Bin Rashid Al Maktoum, issued new legislation concerning Dubai’s new laws for cancelled projects in 2020 – Decree No. 33 of 2020.
This law was initially decreed in 2013 when a special tribunal was set up to oversee the liquidation of cancelled or unfinished projects. However, an amendment was made to the existing law under Decree No. (33) of 2020. Under Dubai’s new laws for cancelled projects, members of the new special tribunal were appointed by the Chairman of the Dubai Judicial Council.
The Dubai law on unfinished real estate projects is designed to protect investors and ensure greater accountability within the real estate market.
NEW RULES FOR UNFINISHED PROJECTS IN DUBAI
According to the new Decree No. 33 of 2020, the name of the special committee was changed to the Special Tribunal for Liquidation of Cancelled Real Estate Projects in the emirate of Dubai and Settlement of Related Rights. The new entity substituted a previous committee set up in 2013, responsible for surveying claims related to cancelled real estate projects in Dubai.
Under the Dubai law on unfinished and cancelled property projects, the new tribunal is responsible for the following:
- Resolving disputes and complaints — from cancelled or unfinished projects — that the previous committee did not finalise.
- “Define the rights of investors and purchasers” after liquidating assets of cancelled projects.
Please note that as per Dubai law on incomplete real estate projects, cases regarding suspended or rescinded projects cannot be filed at any courts in Dubai, including DIFC Courts, since the new Tribunal have jurisdiction over all related property disputes. Furthermore, all decisions the Tribunal makes are executed by the Execution Court at Dubai Courts.
DUBAI’S NEW LAWS FOR CANCELLED PROJECTS: AMENDMENT REGARDING INTERIM REAL PROPERTY REGISTER IN DUBAI
Apart from Dubai’s new laws for cancelled projects, a new amendment was also introduced regarding the emirate’s Interim Real Estate Register. According to the amendment, developers who fail to initiate real estate projects for unforeseeable reasons “must refund the entire amount paid by purchasers.”
The same rule also applies to real estate projects cancelled by the Real Estate Regulatory Agency (RERA).
FAQS ABOUT DUBAI’S NEW LAWS FOR CANCELLED PROJECTS
WHAT HAPPENS WHEN A PROJECT IS CANCELLED IN DUBAI?
According to Dubai law on cancelled real estate projects, the assigned judicial body steps in when a property project gets cancelled. They oversee the liquidation process, which typically involves assessing the project’s financial status, fund relocation and investments made.
DO INVESTORS GET THEIR MONEY BACK AFTER A PROJECT IS CANCELLED?
Yes, they do. The liquidation department requests developers to return investors’ money within 60 days from the date of the cancellation decision.
HOW DO I REQUEST A REFUND AFTER THE PROJECT CANCELLATION?
To request a refund, you must file a petition to the Dubai Land Department (DLD). To initiate the process, you have to present evidence, such as proof of money you have made and an SPA agreement. After this, the DLD will contact you with a hearing date to begin the refunding process.
ARE THERE ANY RISKS IN PURCHASING OFF-PLAN PROPERTY IN DUBAI?
While off-plan properties come with attractive prices and choices, there are certain risks to investing in off-plan projects in Dubai, such as delayed completion or handover, unanticipated changes in market conditions, and no immediate returns.
HOW CAN I TACKLE DELAYED PROPERTY HANDOVER IN DUBAI?
You can start by ensuring you have made the necessary payments, and don’t forget to visit the project site. Our handy guide covers all the tips on how to tackle delayed handovers in Dubai.
This sums up our guide to Dubai law on unfinished real estate projects. Are you a foreign investor interested in the country’s real estate market? International investors interested in purchasing a property in the emirate must consider the foreign property ownership rules in the UAE before investing in the perfect property.
For more updates on the state of real estate in the United Arab Emirates, stay tuned to MyBayut.
