Investing in real estate projects, especially off-plan developments, can be highly intimidating as many investors might be apprehensive regarding the delay of possessions. After all, real estate investments often involve a lifetime’s worth of savings and money and it is natural to feel concerned about your financial risks.
A country like the UAE where the real estate industry is extremely evolved sees dealing with properties on a daily basis. From localities seeking interests in the real estate sector to expats buying properties in the UAE, the property development sector is booming in this nation.
However, the Government of Dubai and the UAE by extension has put several measures in place to ensure the safety of the buyers. The stringent policies and regulations laid out by the Dubai Real Estate Authority make it extremely easy to ensure you are going to get your property in due time. By instilling regulatory standardization in the real estate industry, it has layered it with a seal of security.
This makes you, as an investor, properly deal with the delays in handing over a property by a developer. In this space, we are going to run you through all the information you need to know about the actions you need to take in the event of such delays. You will get to know about the compensation aspect that buyers can claim from developers and how you can file a case against them for the same in the UAE.
The Course of Action to Take if Developers Fail to Fulfil Delivery Date
If you have invested in a property and made necessary payments but were still not handed over the property on the due date that is mentioned in the contract, then you can definitely question the developer. The concerned authorities in the UAE are obligated to receive your complaints.
In special circumstances, you also are eligible to begin a proceeding for arbitration. It is of paramount importance to get your contract legally reviewed before signing it. You need to run due diligence about the registration of the developer and the concerned project.
It is recommended to have a consultation session with property lawyers in the UAE before implementing a course of action. This way, you will know which route to take and how to protect your interests in the best manner.
Understanding Your Rights as a Buyer
Although the terms and conditions of each contract may vary from one another, the main rights of you, as a buyer, as per the UAE laws and regulations and the agreement signed between you and the developer must include the following details.
- Transfer of ownership and title
- Agreed time of possession handover
- Agreement to meet construction requirements.
- Accomplishment as per the agreed progress plan
Hiring a lawyer to draft a contract will make it easier for you to define these aspects furthermore with complete transparency.
How Can RERA Help You Out?
The RERA (Real Estate Regulatory Authority) is a government body that regulates the real estate industry of the country. It aims to offer relief and assistance to investors and buyers against the unfair and malpractices of suspecting developers. It specifies the norms and standards in relation to the building and development of properties to promote transparency of transactions that take place within the real estate sector.
When the developer fails to deliver the handover of the project in due time, then the buyers can exercise the right to withdraw themselves from the project. They will be compensated by being given a completed refund from the developer. Buyers also can choose to continue with the project if they wish to do so and will be provided due compensation for the delay of the handover of the project by the developer.
If the developer makes any false promises regarding the development and there are disparities found, then, buyers have the choice of claiming the whole compensation for the property along with the amount of interest rates.
If you, as a buyer, find any defect after the delivery of the property such as structural defects in relation to the construction, then the developer is responsible for making repairments without charging anything from you. It must be noted that these defects have to be found within a predetermined time limit following the delivery date set beforehand by the involved parties.
Buyers can also claim compensation from the builder if there are any defects with the title. Please note that the defects in a title aren’t barred by any limitation.
Penalties for Delayed Possession Handover of Real Estate in the UAE
Depending on the severity of the situation, RERA will determine the amount of compensation that the developer has to pay to the buyer for delaying the handover of the project. Buyers can choose from two options in the event the developer fails to meet the due date mentioned in the Sales and Purchase Agreement (SPA). They can choose to terminate the contract and get completed compensation for the same along with the rates of interest or they can continue with the project and claim apt reimbursement for the delay from the developer.
Please keep in mind that if the buyer chooses to continue with the project, then the interest can be claimed for the delay period until the handover of the property by the developer.
If the developer fails to make the compensation voluntarily, then the buyer can exercise their right to file a complaint with the RERA. An officer will then be appointed by RERA who will perform the function of a judge. The appointed offer will conduct an inquiry and then pass an apt order.
This is why we can’t stress enough on the fact that you need to get in touch with a reliable law firm in the UAE before signing an SPA as it will save you from getting unfair treatment by the developer. It will make you legally aware of the terms and conditions and further secure your deal.
Conclusion
Investing in a property can be an overwhelming experience. In a country like the UAE which is known for its booming real estate industry, the robust laws and regulations are meant to safeguard the interests of both buyers and developers. As you have seen from the aforementioned discussion, you as a buyer, can claim compensation in the event the developer has failed to meet the deadline of the handover of the project.
Make sure to get legal advice beforehand and take the help of RERA if your developer has not been able to hand over the project in due time. You can get complete compensation and terminate the project or can choose to go ahead with the project and get apt compensation.