Developers will be liable to pay compensation to purchasers if the disclosure statement, which becomes mandatory from January 13, 2011, is incomplete or inaccurate in a material way, according to the Strata regulation.
“It is important that the interim disclosure statement and disclosure statement are prepared properly and accurately, as the developer is deemed to have warranted the information contained in the statements and the developer will be liable to pay the purchaser compensation if the disclosure statement is incomplete or inaccurate in a material way,” Clyde and Co said in its latest real estate update.
“Failure to attach an interim disclosure statement, or from January 13, 2011, failure to attach a full disclosure statement to a contract for sale of a unit will result in issues with enforceability of the contract,” the legal consultancy said.
Article (5) sub-clause 3 of the Direction for General Regulation Concerning Jointly Owned Properties says: “The developer is deemed to have warranted the information in a statement given under sub-clause (1) of article (4) and if within two years of the date on which the unit is transferred from the developer any of that information is found to be inaccurate or incomplete in a material way the developer will be liable to the consumer to whom the unit is transferred for damages, whether the consumer purchased from the developer or another consumer.”
Since the introduction of Strata regulations in Dubai earlier this year, an extensive disclosure is required pursuant to the directions when selling units in Jointly Owned Property (JOP) especially for “off plan“ sales. Interim provisions currently in force provide that an interim disclosure statement must be attached to any contract for the sale of a unit within a JOP where the title to the unit has not been issued by the Land Department of Dubai and the seller is the developer.
The interim disclosure statement must include extensive detail of the project and the unit as prescribed by the directions. The interim disclosure provisions will expire on January 13, 2011, from which date a full disclosure statement must be attached to any contract for sale. The disclosure statement must include a copy of the proposed JOP Declaration for the project as well as extensive detail of the project and the unit as prescribed by the directions.