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Real estate: New Dubai law issued for cancelled and unfinished projects

Real estate: New Dubai law issued for cancelled and unfinished projects

If RERA cancels a real estate project, a special tribunal will be responsible for liquidating it and ensuring settlement of all rights related to the project

Dubai Real estate

Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, has issued a new law dealing with cancelled and unfinished projects.

The Decree No. (33) of 2020 on the special committee for unfinished and cancelled real estate projects in Dubai, formed pursuant to Decree No. (21) of 2013, has changed the name of the special committee for unfinished and cancelled real estate projects in Dubai to the Special Tribunal for Liquidation of Cancelled Real Property Projects in the emirate of Dubai and Settlement of Related Rights.

The chairman of the Dubai Judicial Council will appoint the chairman and members of the new Tribunal which will review and settle all disputes, grievances and complaints for which the previous committee did not issue final decisions or judgements. It will also review and settle disputes and complaints arising from unfinished, cancelled or liquidated real estate projects, reported news agency WAM.

The Tribunal is also tasked with the settlement of disputes related to unfinished real estate projects that have been cancelled pursuant to Law No. (13) of 2008 and thereafter referred to the previous Committee by the Real Estate Regulatory Agency (RERA).

If the real estate project is transferred from one developer to another, the Tribunal is authorised to determine the rights and obligations of each developer.

If RERA has cancelled a real estate project, the Tribunal is responsible for liquidating it and ensuring settlement of all rights related to the project.

The Tribunal will also define the rights of investors and purchasers of unfinished real estate projects and settle all disputes, grievances and complaints related to both unfinished and cancelled real estate projects.

The new Tribunal is authorised to review both normal and urgent matters and issue judgments or amicable settlements. The chairman may assign one or more members of the Tribunal to review and issue judgments on such matters.

The chairman may also form subcommittees, appoint auditors, and issue orders to the trustees of the project’s ESCROW account in all matters related to the liquidation of cancelled real estate projects.

The new decree also details the responsibilities and obligations of the Real Estate Regulatory Agency (RERA) related to supporting the Tribunal in performing its duties and responsibilities. RERA will prepare detailed reports about unfinished projects and provide its recommendations to the Tribunal to help settle disputes or refer the project to another developer.

Following its activation, the Decree prohibits all courts in Dubai, including DIFC Courts, to accept any disputes, appeals or complaints related to unfinished or cancelled real estate projects, or those that fall under the jurisdiction of the Tribunal.

Sheikh Mohammed also issued Law No. (19) of 2020 amending Article (11) of Law No. (13) of 2008 on the Interim Real Estate Register in Dubai.

According to the amendment, if the developer did not initiate construction works in the real estate project due to reasons beyond his control, or if the project was cancelled due to a decision issued by RERA, the developer must refund the entire amount paid by purchasers.

All decisions and judgements issued by the Tribunal are final and incontestable, and the Execution Court at Dubai Courts will execute the Tribunal’s judgments.

Any other legislation that contradicts or challenges the articles and provisions of Law No (19) of 2020 is considered null. The new Law will be published in the Official Gazette and is effective from the date of its publication.

Read: Dubai’s real estate space: Is demand catching up?

According to a report by Knight Frank issued earlier this year, new supply in Dubai’s residential space has grown steadily – from 12,900 units in 2015, to 18,100 units in 2016, 27,700 units in 2017 and 28,500 units in 2018.

The number of new homes forecast for completion in Dubai this year is 50,700 units – a 40 per cent increase over the approximately 36,300 units added to the market in 2019. The report added that Dubai came second on the list (after Hong Kong, at 53 per cent) when it came to the addition of new residential supply for 2020.

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