(EMAILWIRE.COM, April 29, 2009 ) If you have invested in a development in Dubai that has since been cancelled by the emirate’s property regulators, don’t despair – new rules have been announced that will ensure investors receive a full refund...
All cash paid by buyers on property development projects that are officially cancelled by The Real Estate Regulatory Authority (RERA) will be returned by developers upon termination of contract.
This announcement will bring relief to thousands of property investors who were concerned that they would not see their money again. But, it wonÂ’t help everyone as there is a sliding scale for refunds, meaning that if construction is partway along already, the buyer will still have to forfeit some of their money.
Law No 9 of 2009 provides the sliding refund scale. If a project is 80 per cent completed, the buyer will forfeit 100 per cent of cash that they have paid to date.
If the project is 60 per cent completed, the buyer will forfeit 40 per cent of purchase price. If it is less than 60 per cent completed, the buyer will forfeit 25 per cent of purchase price.
If construction hasnÂ’t started yet, the buyer forfeits 30 per cent of cash they have paid to date. When the project is officially cancelled by RERA, the buyer shall be refunded all cash that they have paid to date.
Law No 9 has been signed and approved but only becomes official and legally binding once it gets published in DubaiÂ’s official gazette.
It is hoped that the introduction of this new law will provide guidance to the property market and help to clarify uncertainty on terminations and damages.
Many investors have continued to make regular payments to developers despite no sign of the project starting. They will now have an end to some of their concerns.
At present, more than 800 projects are being examined by RERA inspectors across Dubai to determine each oneÂ’s progress. RERA will apply the law and give directions to developers on what steps to take.
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