'40% complete' rule may cost property defaulters

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

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.

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