Understanding Investor Rights: What Happens If an Off-Plan Property in Dubai Is Not Handed Over on Time?

Understanding Investor Rights: What Happens If an Off-Plan Property in Dubai Is Not Handed Over on Time?

If an off-plan property is not handed over on time, investors in Dubai possess certain rights safeguarded by Law No (8) of 2007 Concerning Escrow Accounts for Real Estate Property Development. It is imperative for potential buyers to conduct comprehensive due diligence before signing any off-plan sale and purchase agreement. Here are key steps to ensure informed decisions:

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  1. Verification of Real Estate Project:
    • Confirm registration with Rera for project legitimacy.
    • Ensure the existence of an escrow account for fund protection.
  2. Project Details:
    • Determine project completion percentage and expected completion date.
    • Verify developer registration with Rera and land ownership.

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  1. Permits and Approvals:
    • Confirm developer has necessary permits from DLD and Rera.
    • Ensure compliance with laws for off-plan unit sales.
  2. Investor Rights and Escrow Accounts Law:
    • Refer to Law No (8) of 2007 for investor rights.
    • Escrow Accounts Law mandates developers to open and maintain an escrow account for each project.

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  1. Escrow Account Provisions:
    • Developers must open an escrow account for each project.
    • Maintenance of the escrow account is mandatory throughout the development process.
    • Payments by investors must be deposited into a designated escrow account.
    • Records of the escrow account must be accessible to depositors.
  2. Protection in Non-Completion:
    • Escrow agent, in consultation with DLD, must take measures to preserve depositors’ rights.
    • In case of non-completion, refunding of payments made by depositors is required.

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In the event of delayed handover, investors can seek guidance from the DLD to ensure their rights are protected. Understanding the terms outlined in the sale purchase agreement is crucial. Investors are advised to thoroughly comprehend provisions related to project completion, extensions of time, and other relevant matters. Seeking advice from a legal practitioner in Dubai before proceeding with the agreement is recommended for comprehensive understanding and assistance.

This approach ensures that investors have a clear understanding of their rights and legal recourse if the developer fails to deliver the off-plan unit on schedule. It promotes transparency, accountability, and investor protection in Dubai’s real estate market.

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