Al Tamimi & Company, in conjunction with the Dubai Land
Department provided an Update on Property Laws & Regulations in
Dubai on 27 January 2009 at the Godolphin Ballroom, Emirates
Towers.
The well attended event attracted journalists, lawyers, property
developers and others in the property industry from the region
posing numerous questions for the expert panel to answer.
Emad Eldin Farouq, Senior Legal Advisor at the Dubai Land
Department opened his presentation by discussing Law 13 of 2008
Regulating the Interim Register and highlighting its legislative
importance. The Law introduced the Real Estate Register, which
provided investors with added peace of mind. Emad went on to
explain the Developers' obligations under Law 13 of 2008
relating to commencing construction of a project, sales off plan
and fees payable. He also discussed Unit Area Variations and
explained that if a unit turns out to be larger on completion, the
developer may not claim the difference in value and if the unit
turns out to be smaller then the developer must compensate the
purchaser for the difference unless it is marginal in which case
the developer would not be required to compensate the purchaser for
the shortfall in the area. Emad closed his presentation by
discussing the role of Dubai Land Department.
Mohammad Kawasmi, Senior Associate at Al Tamimi & Company
addressed the recent changes including the "2009 Cap
Decree" and Amendments to the Landlord & Tenant Law. He
explained that there would be no rent increase in 2009, if the rent
in 2008 was equal to or 25% or less below the average similar rent,
as set out by the RERA rent index which was attached to the new
decree. He added, however, that RERA were also updating the Index
and that the new decree and Amendments to the Landlord & Tenant
Law have not yet been published in the Gazette and are therefore
still in draft form and not yet implemented by the Rents
Committee.
Lisa Dale, Partner and Head of the Property Department at Al Tamimi
& Company provided a general overview of some of the recent
laws published and explained how the Mortgage Law covers properties
registered on both the Interim Real Estate Register and the Real
Estate Register and discussed how default notices are handled, with
the whole process taking a maximum of 4 months. She also referred
to the regulation of developers and highlighted that "A
Developer shall be cancelled from the Register... if he does not
commence construction within 6 months of the date he was granted
approval to sell off plan without an acceptable
excuse..."
Lisa mentioned two new laws are in the pipeline which will bring
further protection to investors and end-users to Dubai's
off-plan property market. The first law shall provide that
developers must own the land and have completed at least 20 per
cent of construction before they can request consent from RERA to
sell off plan. The second law says the payment plan must be linked
to construction milestones and maximum of 20 per cent of the
property price can be taken up front as a deposit. Lisa commented
that both laws are currently in draft form but are expected to be
published soon.
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