Emaar Properties, Dubai’s largest developer, on Tuesday, August 7, 2013, issued a second list of property defaulters in its Claren T1 and 29 Boulevard T2 projects in Downtown Dubai, asking them to pay their pending installments within 30 days, or face termination of contract.
The master developer had issued similar notices to buyers in the same project on August 1.
Last month Mizin, now merged with Dubai Properties Group, had issued cancellation notices to defaulters in its Remraam project in Dubailand.
Although no details were mentioned on the number of installments pending from each buyer, the notice, which is served by Dubai Land Department in accordance with Law No (13) of 2008 as amended, and its Executive Regulations, requires a defaulter to clear the dues within 30 days as from the date of publication of the notice.
“If you fail to pay the amount due within the specified period DLD shall take the necessary legal proceeding pursuant to clause No. (11) of the aforesaid,” reads the notice issued in a local daily.
Scroll down to read what Article 11 of Law No (9) of 2009 says.
Emaar has handed over approximately 36,600 units including some 20,900 apartments and around 15,700 villas.
In June, the company said that over 95 per cent of the units launched in 2012 and to date in 2013 have been sold.
“All launches have witnessed an excellent response from investors and end users.
“Total sales value in Dubai till end of May 2013 is approximately Dh4.5 billion, which is almost four times compared to sales in the same period in 2012 (approx. Dh1.2 billion),” the developer said in its latest corporate presentation.
What the law states
Law No (9) of 2009 amending certain provisions of Law No (13) of 2008 regulating the interim real estate register in Dubai Article (11) 1. In the event the purchaser shall be in default of any of the terms and conditions of the contract for the sale of a real estate unit entered into with the developer, the developer must notify the department of such default. Thereupon, the Department shall give the purchaser, by hand, registered post or e-mail, a 30-day notice to fulfill his contractual obligations.
2. If at the end of the notice period stipulated in the preceding paragraph the purchaser has not fulfilled his contractual obligations, the following provisions shall apply:
a. in case the developer has completed at least 80% of the project, the developer may keep the full amounts paid and request the purchaser to settle the remaining amount of the contract price. If this was not possible, the developer may request that the property be auctioned in order to collect the remaining amounts due to it.
b. in case the developer has completed at least 60% of the project, the developer may revoke the contract and deduct up to 40% of the purchase price of the real estate unit stipulated in the contract.
c. in case of projects where construction commended but did not reach 60%, the developer may revoke the contract and deduct up to 25% of the purchase price of the real estate unit stipulated in the contract; d. in case of projects whereat construction has not yet commenced for reasons beyond the developer’s control without any negligence or omission on its part, the developer may revoke the contract and deduct up to 30% of the total amounts paid by the purchaser.
3. For the purposes of paragraphs (c) and (d) of this clause 2, the term "construction" shall refer to cases where the site of the project is handed over to the contractor and the construction works have commenced in accordance with the designs approved by the concerned authorities.
4. For the purposes of paragraph (b), (c) and (d) of the foregoing clause, the developer shall return the amounts due to the purchaser within a period not exceeding one year from the date of revocation or within a period not exceeding sixty days from the date of resale of the real estate unit, whichever comes first.
5. Notwithstanding the provisions of clauses 1 & 2 of this Article, the agency may, following a grounded report, decide to cancel a real estate project, in which case the developer must return to the purchasers all the amounts paid by them in accordance with the provisions of Law No (8) of 2007 concerning Escrow Accounts of real estate developments in the emirate of Dubai.
6. The provisions contained in this Article shall not be applicable to contracts of sale of lands where sales were not made off-plan as they shall remain governed by the provisions contained in the contract entered into between the two parties thereto.
7. The provisions of this Article shall apply to all contracts entered into prior to the entry into force of this Law.
Notice of cancellations served
- Investor receives a notice of cancellation, giving him 30 days to comply.
- During that time, the investor can register his "objection" with the Legal Affairs Department of the DLD.
- In response to the objection, DLD will schedule a meeting with the developer, investor and a representative of the department in an effort to achieve a settlement.
- If the settlement is not achieved, after 30 days, the notice of cancellation expires and the cancellation becomes official.
- At this point, the DLD will send a notice of termination. If the DLD makes a ruling in favour of the investor, it will notify the developer and expect them to comply with that decision.