All units must be registered with Land Department

The Dubai Cassation Court has introduced a new legal ruling necessitating the registration of the property purchase contract with the Lands and Property Department as means of proving property ownership.

The ruling was issued in line with the terms of Law No. 13 of 2008.

The ruling sates that signing a contract is not enough to prove ownership of a property.

The contract must be registered with the relevant department to be considered a valid document before the court.

The same ruling says that off-plan units should not be registered in the final property register, but rather in the initial register.

It also states that should a developer fail to register the project for reasons beyond his control, sales made would still be valid.

Once finished, the developer should register sold units in the name of buyers who fulfilled their contractual commitments.

The Land and Property Department has the right to register a property in the name of the buyer who has fulfilled contractual obligations whether on its own, or on a request made by the buyer.

The court stated: “The law covers units that have been sold prior to its enforcement and those that have been sold after implementation, thus requesting the registration of all units in the initial property register.”

The law also obliged the developer to apply to the Land and Property Department to register sold units within 60 days from the date of the law’s enactment.

The court said that the role of the developer is limited to submitting the application and the department would process registration procedures considering its control and supervisory authority on property register and for ensuring rights of all of those who deal in properties are maintained.

These rules have been decided based on a case filed by a buyer against a developer asking for a refund of Dh251,000 and other damages.

The plaintiff paid the developer the amount for booking a residential unit that was to be delivered to him after two months from the date of the deal.

The developer has later notified the buyer that the project is temporarily suspended without specifying the date of resuming construction.

The plaintiff realised that the company did not start any construction work and that the project does not exist at all, so he filed the case asking for the refund of the money.

The Court of First Instance ordered the developer to pay the amount with damages.

The developer appealed the sentence and the court of Appeal Court ordered the cancellation of the sentence and turned down the case.

The plaintiff appealed the sentence with the Cassation Court.

After studying the case, the Cassation Court found out that the situation of the developer was legal as he had applied to register the lands and the units of the project in the relevant register of the Land and Property Department.

The Department issued a certificate testifying that the developer has adhered to registering the project in the initial register.

However, the registration was suspended for technical reasons beyond the developer’s control.

Therefore, not having the contract registered was not due to the developer’s fault, but rather because of the department and this does not result in the invalidity of the deal.

The plaintiff asked the court to end the contract as the developer failed to fulfill his obligation of handing over the subject unit after two months from the date of sale.

As the plaintiff failed to submit a document stating this obligation, the Cassation Court upheld the sentence of the Appeal Court and turned down the case.

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