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REFORM IN DUBAI LAND LAW BENEFITTING PURCHASERS

01-11-2017

Menna Khalil
Author:Menna Khalil
Email:menna.khalil@tlg.ae

DUBAI LAW NO. 19 OF 2017

Several legal reforms have been introduced in the United Arab Emirates the past few months, one of which is Dubai Law No. 19 of 2017, Regulating the Interim Property Register in the Emirate of Dubai, amending Law No. 13 of 2008.

Amending Article 11 of Law No. 13 of 2008, Law No. 19 of 2017 regulates a developer’s conduct in the case that a purchaser violates his contractual obligations per the Sale Purchase Agreement (SPA). Additionally, the new law introduces two (2) clauses relating to the dismissal of a real estate project.  

ARTICLE 11 OF LAW NO. 13 OF 2008

Per Law No. 13 of 2008, if a purchaser breaches his obligations per the (SPA), the developer shall notify the Department of the breach and accordingly, the Department shall give a thirty (30) days’ notice to the purchaser to fulfill his obligations. If the purchaser fails to fulfill his obligations within this duration, the developer may revoke the contract and refund the purchaser after deducting up to 30% of the payments made by the purchaser. 

CHANGES TO ARTICLE 11 PER LAW NO. 19 OF 2017

In the event that a purchaser does not fulfill his contractual obligations to the developer, the new law provides explicit and detailed conditions and guidelines that the developer must follow.

Per the new law, upon notifying the Department of a purchaser’s violations, the developer must submit documents containing all required information and provide clear descriptions of the purchaser’s alleged violations. Only after the Department’s verification of the documents and purchaser’s alleged violations can the Department provide a written notice requesting the purchaser to fulfill his obligations within thirty (30) days. The developer and purchaser are to attempt to reach a settlement. Should the purchaser fail to fulfill his obligations and the parties fail to reach a settlement, only then can a developer seek to terminate the contract. To do so, the developer must follow specific guidelines, subject to the percentage of construction completed by the developer.

HOW CAN THE LEGAL GROUP HELP?

The Legal Group’s Corporate and Commercial Department is pleased to assist individuals seeking to purchase property in the UAE, current investors, real estate developers, or businesses, in all matters relating to Real Estate and in ensuring timely and organized legal compliance with the laws, procedures, and regulations. The TLG Corporate team may assist in verifying documents and conduct, preparing contracts and memorandums of understanding, preparing documents for filing and submission, coordinating with the relevant authorities including the Dubai Land Department (DLD) and the Real Estate Regulatory Agency (RERA), coordinating with third parties including banks and brokerage firms, and completing all sorts of transactions.

If you have any questions on the above or require legal advice and assistance with Real Estate in the United Arab Emirates, please do not hesitate to contact us.