Incomplete off-plan units need to be registered too

The Dubai Court of Cassation has established a set of legal principles for the real estate sector under which incomplete off-plan home units will not be registered in the name of the buyers directly in the final real estate records.

They can, however, be registered in the Initial Land Registry of the Land Department in accordance with the provisions of Act 13 of 2008.

After the completion of the construction of units that are sold in advance, the developer may apply to the Land Department to register those units in the names of buyers who have fulfilled their contractual obligations. However, that should happen after the developer has received the completion certificate from competent authorities.

Meanwhile, the Land Department has the authority to register units in the names of buyers in case they submit a request or by the developer on behalf of the buyers when they have fulfilled their commitments.

The court affirmed the law equated between the units sold before applying the provisions of that law and those sold after the application of that law, and here the law is obliged to register all the units in the initial Land Registry.

The court also confirmed that the developer will be obliged within 60 days of the date of the law to apply to the Land Department to register the sold units in the final Land Register if they were fully constructed and can also be recorded in the initial register if such units were incomplete.

On the other hand, the Court of Cassation mentioned the role of the developer will be confined to submitting the application to the Land Department and the department will be the only body that can take action according to its powers.

The principles established by the Dubai Court of Cassation came in a ruling in favour of one housing unit buyer against a real estate development company.

The buyer asked the court to compel the developer to pay Dh251,000 plus the benefits.
The buyer claimed in his complaint that he had made a reservation for housing unit from the plaintiff (real estate development company) and added that he paid the amount stated in the contract and on the promise that he received the housing unit after two months.

He added the company breached the contract and told him the project will be stopped.

The Court of First Instance issued its verdict by obliging the developing company to return the amount and its profits.

The developer appealed the verdict before the Dubai Court of Appeal but once again the court supported the ruling of the Court of First Instance.

The developer went to the Court of Cassation, which refused the appeal and enhanced the verdict of both the Court of First Instance and the Court of Appeal.
 

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