'40% complete' rule may cost property defaulters

Developers rush to ensure 40% completion as this will enable them to issue notices and repossess properties

Staff

Published Saturday, August 28, 2010

Picture used for illustrative purposes only. (FILE)

Dubai developers are reportedly taking advantage of an upturn in construction activity in order to put investors in difficult financial positions, according to media reports.

Some developers are rushing through to the 40 per cent completion stage on projects, in order to issue default notices to buyers who have missed instalments.

If the investors are not in a position to renegotiate the instalment terms, developers will then be able to repossess the property and get it on to their books. Such property could then be sold when market conditions are deemed proper or placed in the rental market by the concerned developers. In effect, this is a win-win situation for developers, according to one report in Gulf News.

The fresh impetus on the construction side should move up a gear or two in the post-Ramadan period.

Comments

Rizwan Siddiqui 30 December 2010 00:08 0 0

This is giving unfair advantage to devlopers and will hurt the Dubai real estate market and international cofidence! If Rera can think of another way of making devlopers, who have already minted money from the Dubai market, pay back failrly, then Dubai real estate will boomed again.

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Angry Fire 5 September 2010 10:52 0 0

Rubbish! Those developers who already took 80-90 per cent of the money from investors and not yet completed 10 per cent of the work - what will happen to them? Who is gonna protect us? Rera?

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Suffered Investor 29 August 2010 12:13 0 0

Win-win? If developer received 30-40 per cent of the contract but still has not started, even 1 per cent, you think the investor has the same power to take his money easily? Never ever. This is absolutely win-lose situation.

Due to a high number of negative responses this rating has been hidden. To view it click here.

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