Brokers need to be vigilant when dealing with off-plan properties in Dubai, as there may be uncertainty around the extent of their responsibilities if a developer fails to complete a project, a real estate firm CEO has said.
A Dispute Over an Off-Plan Investment
Tim Boswell made the comments a few weeks after his company, Ocean View Real Estate, had its business licence revoked by Dubai Courts following a payment dispute with a German investor.
The investment, made by German firm Ventafonds Capital under the trading name Dubai Opportunity 1 GmbH & Co. KG, related to a floor in the Legacy Tower, Dubai Waterfront, in late 2007. The project never took off.
Boswell’s firm had brokered the deal. The court ordered Boswell to pay the German firm Dhs2.4 million, of which Dhs1.4 million was taken from his bank account.
Speaking to 7DAYS, Boswell said: “We sold one floor in the Legacy Tower and the development never happened. We’re only the broker and we had nothing to do with the development of the project. For instance, if we sell a property for a developer and they don’t develop it – are we responsible? The law isn’t clear.”
The Importance of Due Diligence
Boswell said the market needed greater clarity on the responsibilities of brokers selling off-plan properties. He advised brokers to carry out as much due diligence as possible on any off-plan property they are selling and not simply assume that the developer or master developer has completed all necessary checks.
The dispute highlights the importance of clearly defining the responsibilities of brokers, developers and investors in off-plan transactions. Proper contractual documentation and appropriate due diligence can help parties better understand their potential obligations and risks.
Boswell remained determined to keep his firm running and said he hoped to reopen the following year. He had already let go of 24 employees while 40 remained.
Legal Advice on Off-Plan Property
Off-plan transactions can involve substantial financial commitments and complex contractual arrangements. Developers, brokers and investors should ensure that they understand their respective obligations and obtain appropriate real property legal advice before entering into or facilitating an off-plan transaction.
For investors considering off-plan property investments, it is important to understand both the potential opportunities and risks involved. Buying off-plan property in Dubai can offer investors access to new developments and flexible payment arrangements, but it also requires careful due diligence. Before investing in off-plan properties in Dubai, buyers should research the developer, review the terms of the purchase agreement, understand the expected completion timeline and consider the protections available if the development is delayed or does not proceed as planned. Obtaining professional legal advice before committing to an off-plan property investment can help buyers understand their rights and obligations.
For legal advice or assistance with off-plan property transactions, real estate contracts or related disputes, please contact James Berry Law to discuss your requirements.
This article is based on a historical report and is provided for general informational purposes only. It does not constitute legal advice and should not be relied upon as a statement of current law. For specific advice, please contact us.
Source: http://7days.ae/uae-real-estate-boss-calls-clarity-off-plan-properties/78113