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"Off Plan" property purchase

"Off Plan" property purchase

I bought a property “off plan” in 2007 and have signed a sale and purchase agreement which documents the terms agreed. The developer also signed this....

         Q: I bought a property “off plan” in 2007 and have signed a sale and purchase agreement which documents the terms agreed.  The developer also signed this.  I have paid 30%              of the contractual purchase price, pursuant to a date based payment plan.  I stopped making payments when it became apparent that construction was not underway.                      Almost no construction has taken place; in fact, the developer abandoned the construction site many years ago.  The developer has ignored my repeated requests to process             a full refund to me.  What can I do?

A:    You should attend at the Land Department to enquire as to whether the project has been cancelled or whether the Land Department is attempting to find a new developer to take over your developer’s contractual obligations, pursuant to the Tanmia programme. 

Tanmia is an initiative that aims to breathe life into stalled projects.   Sometimes a third party developer can be lined up to take over a developer’s construction obligations.  That third party developer would be obliged to honour the contractual obligations that your developer agreed with you.  As construction of your project has made little progress at all, it is unlikely that a third party developer would step in to take over your developer’s construction and contractual obligations.

Assuming your project has been cancelled by the Land Department, you would be unable to file a case against your developer, either in court or at arbitration.  Pursuant to Dubai Decree No 21 of 2013, cancelled projects fall within the remit of a Special Committee, which has been specifically formed to liquidate such projects.  The Special Committee would liquidate your project, pay off creditors and distribute any leftover monies to investors, according to the proportionate amounts that investors paid. 

Claire McCarthy

Senior solicitor, authorised and regulated by the SRA (England & Wales)
Real Estate (residential and commercial)
Email:  claire.mccarthy@jamesberrylaw.ae

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