What to do in a situation wherein you are facing real estate dispute with the Developer?
In the past, real estate property disputes in the UAE were extremely common, especially after the global financial crisis the impact of the same remain till the end of 2012. Due to the side of effects of financial crisis the real estate property disputes emerged as Tsunami.
Thereafter, in order to regulate the arbitrary act of developers and to secure the interest of buyers many reforms in the real estate development systems were introduced by the legislature, such as project batches, the existence of developer funds in the possession of the Land Department and its periodic reports on the completion ratios of buildings, but unfortunately despite such reforms there are numerous real estate property disputes which still exists.
Such disputes may be the result of either the circumvention of developers regarding such systems, misuse of funds, or the inability to implement projects and finalize them. In rare cases, there may be compelling circumstances as reason in such disputes.
Nour Attorneys Law Firm provides best property lawyers in Dubai, which works in a highly professional manner to represent the clients and developers in real estate property disputes. Our law firm team consist of highly experienced property lawyers which deals in cases such as completion delays, failure to provide services, the existence of a difference in areas, applying different specification than those agreed upon for finishes and raw materials, and other issues that usually arise in buying-selling, rental, or lease contracts.
Eventually, our law firm offers valuable advice and consultation for anyone who is about to sign real estate property agreements to protect them from the depletion of their funds in real estate as well as to help them avoid paying for the costly litigation fees. It is noteworthy that judicial proceedings before courts and compensation claims are known to all investors and the one always takes lead for positive results, whose has the best property lawyers.
Our best property lawyers in Dubai advice you regarding the consideration of some important points while dealing in real estate sector:
You should never think that the booking agreement is sufficient for you to complete the contract, on the contrary, you must make sure that you receive your detailed rental agreement within the appropriate time to study it carefully and sign it. If you start making payments and you have not received the agreement until one or more years after the contract, you will be forced to sign it.
Therefore, the ability to negotiate the agreement’s terms and conditions will be limited and you may bear severe loss. Moreover, there may be compulsory conditions that does not satisfy you, but under pressure to register or receive the unit, you would eventually sign it.
You should always mention the fact if you have received a copy of the detailed agreement or not if it is included in the booking agreement and you can add this to the signature (I did not receive a copy of the detailed agreement).
This procedure aims at ensuring that the developer will not claim that he gave you the same copy of the contract, as this may lead to issues concerning the extent of your knowledge of the agreement’s terms and conditions.
Imagine in a case of real estate property dispute. If you opt to arbitration for redressal of the dispute then by appointing 3 arbitrators at an average cost of 350-425 thousand dirhams will be levelled, while the unit price ranges from 500 to 800 thousand dirhams. Even if the unit was not delivered, you will not be able to pay for the required amounts to file the case. You should take into consideration that in some cases, due to the insignificance possibility of collecting the due amounts, the unit owners may refrain from filing claims due to the arbitration costs of the arbitral bodies. This is especially the case when the body is tripartite.
Concerning the litigation, the fees have a maximum of approximately 30,000-50,000 dirhams and it varies from one court to another. Moreover, if you choose to resort to filing an appeal or a cassation appeal, the cost will amount up to 50,000-75,000 dirhams. You can also postpone the payment of such fees in court until the end of the lawsuit or request its installment. The court may also give you a discount, and in this case, you will not need to pay these costs.
You should always review the litigation and arbitration cost and consider the cost that you would incur in the light of the value of the unit and the extent to which you can manage to pay for the dispute costs.
You must always inquire about the reputation of the real estate developer by asking real estate marketers about the completion ratios of his projects, the disputes that usually arise around his projects, and in cases of delay, whether the delay is a long-term or a short-term delay.
Furthermore, you should also learn more about if his projects usually differ from the agreed specifications, how the company resolves disputes with clients, as well as verifying the information contained in the company’s portfolio such as the number of projects it has completed. As an additional step, you can review the company’s projects at the Land and Property Department, its completion ratios and delays.
In any case, the owner/buyer shall not make any payment to the real estate developer, whether by cheque in the name of the developer, or by bank transfer or otherwise. The payment made by the owner/buyer must be transferred or can be deposited by way of cheques by the owner/buyer himself to the real estate escrow account to ensure that funds arrive at the Land and Property Department according to each emirate.
This procedure aims at ensuring that the developer is committed to completing certain ratios of the project for the disbursement of payments and making sure of the non-use of these payments in other projects. Moreover, this procedure allows you to receive a refund of a percentage of the paid amounts in case of the cancellation of the project.
It is noteworthy that you can only pay commissions or administrative and other registry expenses directly to the developer or in his bank account, however, construction payments have to be paid to the escrow account.
You should agree through a contract that payment shall be associated with the completion ratios with the existence of a specified schedule rather than an absolute schedule. Postponement of payment should be done automatically if the completion ratios are not met. In order to check authenticity of the completion ratios of project, the same can be report issued by the Land Department or by its approved consultants according to each Emirate and not just relying upon the statement issued by the developer.
The second option is that you can also agree on a time schedule mode of payment. In this mode the payment is to be made after the receipt or completion of the entire unit. In such cases, agreement on this matter is better making payments that are proportional to the completion ratios.
You should always be aware that the Civil Code governing all contracts and its general principles has determined that if either party breaches their obligation in the contract, the other party may suspend the execution of their obligations due to the breach made by the violating party. Moreover, the latter shall not be considered a breach of the party who has suspended to fulfill its obligation.
You should consider that your refrain shall be proportionate to the breach as you may not refrain from making a due payment just because the developer did not send you a monthly completion report. However, you may refrain from paying in case of not receiving the original agreement. Moreover, you are also entitled to terminate the contract due to the unclarity of the terms and conditions of the contract.
One of the doctrinal principles known in a simplified language is the warning “Stating that the breaching party is liable for default.” This means that you clarify to the breaching party that he has breached the obligations and conditions of the contract. Thus, you reserve the right to claim compensation and refrain yourself from implementing any obligations in the event of failure to address the breach within the appropriate time.
The accumulations of warnings sent to the developer without an action taken, in addition to all of the above, allow you to claim a bigger compensation as well as not considering your silence as a waiver of your rights against the developer. Therefore, your refrain from committing to your obligations becomes valid without having to compensate the developer for this.
To find a property lawyer in Dubai the following steps are required:
- Search property lawyers near me or
- Search best property lawyers in Dubai.
- Thereafter use the services of best property lawyers provided by our law firm.
Nour Attorneys Law Firm, team of best property lawyers in Dubai, adheres to provides our clients highly diligent and professional services. Therefore, our law firm tends to provide legal advice and consultation on how to deal with real estate purchase offers, negotiate contracts and make market inquiries through our real estate brokers or investors in the real estate market. We also offer litigation services in such real estate property disputes and claims. Therefore, to avail the benefit of our services feel free to contact us.
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