Executive
Council Resolution No. (6) of 2010
Approving
the Implementing Bylaw of
Law
No. (13) of 2008
Regulating the Interim Real
Property Register in the Emirate of Dubai[1]
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We,
Hamdan bin Mohammed bin Rashid Al Maktoum, Crown Prince of Dubai, Chairman of
the Executive Council,
After perusal of:
Law No. (3) of 2003 Establishing the Executive Council of
the Emirate of Dubai;
Law No. (7) of 1997 Concerning Land Registration Fees in the Emirate of Dubai and its amendments;
Law No. (7) of 2006 Concerning Real Property Registration
in the Emirate of Dubai;
Law No. (8) of 2007 Concerning Escrow Accounts for Real
Property Development in the Emirate of Dubai;
Law No. (13) of 2008 Regulating the Interim Real Property
Register in the Emirate of Dubai and its amendments (the “Law”); and
Bylaw No. (85) of 2006 Regulating the Real Property Brokers
Register in the Emirate of Dubai,
Do
hereby issue this Resolution.
The words and expressions mentioned in this Resolution will
have the same meaning assigned to them in the Law.
A Master Developer or
Sub-developer who applies for the
registration of a legal
disposition in respect of a
Real Property Unit with
the DLD within the time limit stipulated by paragraph (2) of
Article (3) of the Law will be deemed to have
complied with
the stipulated time limit even if the DLD does
not complete the registration procedures
within that time limit.
Where a
Master Developer or Sub-developer submits an application for registration of a legal disposition of a
Real Property Unit after expiry of the time limit stipulated by paragraph (2)
of Article (3) of the Law, the DLD must:
1.
register
the legal disposition in the Interim Real Property Register; and
2. impose a fine of ten thousand Dirhams (AED 10,000.00)
on the Developer.
A
Master Developer or Sub-developer may not commence the implementation
of a project or sell its units off-plan unless:
1.
he
takes possession of the land
and receives the demarcation
certificate;
2.
he
has actual control of the land
on which the project is to be
constructed; and
3. he obtains from the Competent
Entities the approvals required to commence the implementation
of the project.
1.
The
DLD must, whether on its own initiative or upon request by the
concerned parties, create an entry on the Real
Property registry folio of any land on which a Real Property project is to be constructed to denote that the project is a development project governed by the
provisions of the Law.
2. The DLD will remove the entry
referred to in the preceding paragraph upon completion of the Real Property project and registration of its units in the names of
purchasers on the Real Property Register, or upon cancellation of the project
for any of the reasons set forth in Article (23) of this Resolution.
An application
for registration of a Real Property Unit in the Interim Real Property Register
will be submitted in the electronic or paper form approved by the DLD, together with the relevant
supporting documents
determined by the DLD.
1.
Upon
completion of a Real Property project and obtaining its
completion certificate from the Competent Entities, the Master Developer or
Sub-developer may not refuse to hand over any Real
Property Unit or register it in the name of its
purchaser on the Real Property Register, provided that the purchaser fulfils all his contractual obligations. This applies even if the purchaser owes the
Developer any financial dues other than in connection with the sale
agreement of the Real Property Unit.
2.
The
Master Developer or Sub-developer must register the Real Property Unit and all
facilities allocated to it, such as car parks, in
the name of the purchaser.
3. If the Master Developer or Sub-developer
refuses, for any reason whatsoever, to register the Real Property Unit in the name
of the purchaser despite the fact that the purchaser has fulfilled all his
contractual obligations, the DLD may, upon the request of the purchaser or on
its own initiative, register the Real Property Unit in the name of the
purchaser on the Real Property Register.
A Master Developer or Sub-developer may not, for any reason whatsoever, charge purchasers any
amounts, other than those
approved by the DLD, in return
for any legal disposition of their
Real Property Units.
Unless otherwise agreed, the Master Developer or
Sub-developer and the purchaser of a
Real Property Unit must pay the prescribed
fees for registration of any legal dispositions of that
Real Property Unit as per their respective share of fees prescribed by the applicable legislation.
If the Master Developer or Sub-developer wishes to market his
project through a Broker, the Master Developer or Sub Developer must comply
with the following:
1.
The
project to be marketed through the Broker must be registered with the DLD.
2.
An
agreement must be concluded with the Broker, who must be approved and licensed in accordance with Bylaw No. (85) of 2006
Regulating the Real Property Brokers Register in the Emirate of Dubai.
3. The project marketing agreement with the Real
Property Broker must be registered with the DLD.
Any legal disposition made by a
Master Developer, Sub-developer, or Broker which involves the
Off-plan Sale of any Real Property or
Real Property Unit prior to approval of the commencement of the project by the Competent Entities and its registration with
the DLD will be deemed null and void.
Where a
Master Developer or Sub-developer engages
a Real Property Broker to market
his project in full or in part, the Broker must
deposit the sale price of the relevant Real Property Unit(s)
into the project Escrow Account. The Real Property Broker may not deposit the
price into his own account or deduct his
commission from that price before depositing it into
the Escrow Account. Any agreement to the contrary of the provisions of this
Article will be null and void.
1.
As
of the effective date of this Resolution, the net area of a
Real Property Unit will be adopted for the purposes of registration on the Real
Property Register. This area will be calculated as determined by the DLD in
this regard.
2.
Unless
otherwise agreed, any
area in excess of the net area of the sold Real Property Unit will not be
taken into account, and the Developer may not claim any payment for that excess area.
3.
The
Developer must compensate the purchaser if the actual area
of the Real Property Unit is less than its net
area by more than five percent (5%).
4.
Where
the shortage in the net
area of the Real Property Unit exceeds the percentage set forth in
paragraph (3) of this Article,
the compensation payable to the purchaser will be calculated based on the price of the Real Property
Unit agreed upon in the agreement
between the Developer and the purchaser.
5. For the purposes of applying this Article, the
net area of a Real Property Unit, as set forth in its sale agreement and plan,
will be adopted as the basis for calculation of any excess
or shortage in the area of the Real Property Unit.
Where any
dispute arises between a Developer and a purchaser, the DLD may undertake conciliatory efforts to preserve their
contractual relationship and may propose any solutions
it deems appropriate to achieve
this objective. Where the
Developer and the purchaser reach an amicable settlement, that
settlement will be documented in a
written agreement executed by the
Developer and the purchaser or their respective representatives. Upon approval of that agreement by the DLD, it
will become binding on both parties.
Where a purchaser
fails to fulfil any of his
obligations under a Real Property Unit sale agreement concluded
between him and the Developer:
a.
The
Developer must serve a notice on the purchaser requesting him to fulfil his contractual obligations. The notice may be served in person by appearing before the DLD; or
in writing through registered mail or email, in which case the Developer
must provide the DLD with a copy
of the notice.
b.
The
DLD must give the purchaser a grace period of thirty (30) days to
fulfil his contractual obligations.
This period will commence from the
date of serving the notice on the purchaser
by the Developer.
c. If the purchaser fails to fulfil his
contractual obligations within the notice period set
forth in paragraph (b) of
this Article, the Developer may take any of the following actions:
1.
Where
the Developer has completed at least eighty percent (80%) of the project, he
may retain all the amounts paid by
the purchaser. In addition, the Developer may either request selling the Real Property Unit by public auction to settle the
remaining amounts payable to him, or terminate the sale agreement and retain a maximum of forty
percent (40%) of the price of the Real Property Unit.
2.
Where
the Developer has completed at least sixty percent (60%) of the project, he may
terminate the sale agreement
and retain a maximum of forty percent (40%) of the Real Property Unit price set forth in the agreement.
3.
Where
the Developer has completed less than sixty percent (60%) of the project, he
may terminate the sale agreement
and retain a maximum of twenty-five percent (25%) of the Real Property Unit price set forth in the agreement.
4.
Where
the Developer has not commenced implementation of the project for reasons
beyond his control, he may terminate
the sale agreement and retain a maximum of thirty percent (30%) of
the amounts paid to him by the purchaser.
d. The Developer
may resort to the competent court to seek a judgement awarding him the respective
percentage prescribed in sub-paragraph (c)(1), (c)(2), (c)(3), or (c)(4) of
this Article where the amounts retained by him are less than this percentage.
A Developer who has not commenced the implementation
of a project may not terminate an
agreement with a purchaser and retain thirty percent (30%) of the payments
made by the purchaser unless that Developer proves
that he has fulfilled all his contractual obligations towards the
purchaser and that the failure to commence the implementation of the project is not due to negligence or omission on the
part of the Developer, or is due to reasons beyond his
control.
For the purposes of applying Article
(15) of this Resolution:
1.
The completion
percentage of a project will
be confirmed by a technical report issued by a consultant approved by RERA, which includes a statement of the completed works based on an on-site inspection of the project.
2. Completion of the levelling
works and the infrastructure
of the project will be deemed as commencement of the implementation
of the project.
A
Developer must refund to the purchaser the amounts retained
by him pursuant to Article (15) of this Resolution no
later than one (1) year from the
date of termination of the agreement or within sixty (60) days from
the date of sale of the Real Property Unit, whichever occurs earlier.
1.
Where
a Real Property Unit is sold by public auction in accordance with the provisions of
Article (15) of this Resolution, the DLD may at its sole discretion deposit the
price of the Real Property Unit in a trust account and pay to the purchaser or his
representative the amounts
remaining after deduction of the
Developer's dues.
2. The Developer may use the Real Property Unit or
lease the same to third parties if it is not sold by public auction, in which case the Developer must
refund the remaining
amounts to the purchaser within the period stipulated in Article (18) of this
Resolution.
A
purchaser may resort to the competent court to seek termination of his
contractual relationship with
a Developer:
1.
if the Developer refuses without a valid reason acceptable to the DLD to deliver the final sale
agreement of the Real Property Unit to the purchaser;
2.
if
the Developer declines to link payments to the construction milestones proposed
by RERA;
3.
if
the Developer materially deviates from the specifications agreed upon in the
agreement;
4.
if
it is proven after the handover of the Real Property Unit that it
is unfit for use due to material construction defects; or
5.
in
any other circumstances that require the
termination of the agreement
in accordance with the general legal
rules.
The following will be deemed as reasons beyond the control of the Developer:
1.
the land
on which the project
is to be constructed is
expropriated for the public interest;
2.
a government entity
suspends the project for re-planning purposes;
3.
structures,
excavations, or utility lines are found in the project site;
4.
the
Master Developer makes any variation to the project site that
results in changing the boundaries and area of the project in a
manner that affects the performance by the Sub-developer of his
obligations; or
5.
any other reasons determined by RERA.
A
Developer will be deemed to have committed negligence or omission in
performing his obligations based
on the following:
1.
delay,
without valid reason, in taking possession of the land or obtaining the
required approvals from the Competent Entities to commence the implementation
of the project;
2. Off-plan Sale by the Sub-developer without the written
approval of the Master Developer;
3.
delay
in obtaining the Master
Developer’s written approval of the plans and designs;
4.
delay in preparing the project for construction
works;
5.
failure to provide RERA with the data and
information required for approval
of the project;
6.
failure to register the project with RERA;
7.
failure to disclose the financial statements of
the project to RERA; or
8. any
other grounds determined by RERA.
RERA may, based on a reasoned technical report, decides to
cancel a Real Property project:
1.
if the Developer fails, without valid
justification, to commence construction works despite having
already obtained all required approvals from the Concerned Authorities;
2.
if the Developer commits any of the offenses set
forth in Article (16) of Law No. (8) of 2007 Concerning Escrow Accounts for
Real Property Developments in the Emirate of Dubai;
3.
if it is proven to the satisfaction of RERA that the Developer has no genuine intention to implement the project;
4.
if the land
on which the project is
to be constructed is withdrawn due to failure by the Sub-developer to fulfil any
of his contractual obligations towards the Master Developer;
5.
if the land is
completely affected by the planning
or re-planning projects implemented by the Competent Entities
in the Emirate;
6.
if the Developer fails to implement the project due to gross negligence;
7.
if the Developer expresses his intention not to implement the project for reasons acceptable to RERA;
8.
if the Developer is declared bankrupt; or
9. for any other reasons determined by RERA.
1.
A Developer may submit a grievance in respect of any decision issued by RERA cancelling his project, no later than seven (7) working days from the
date on which he is notified of that
decision.
2.
The grievance
must be in writing and must include the grounds for objection to the decision.
3.
RERA
must consider the grievance and render its decision on the same within seven
(7) working days from the date of submission of the grievance to it.
4.
If
RERA admits the grievance, it must prescribe the conditions and
requirements that the Developer must
satisfy in order to revoke the project cancellation decision.
5.
The
Developer must undertake in writing to satisfy RERA’s
conditions and requirements.
6. If RERA rejects the grievance,
its decision in this regard will be final and it must
proceed with the project cancellation procedures.
Where
RERA cancels a project, it must:
1.
prepare
a technical report stating the reasons for cancellation;
2.
notify
the Developer in writing, through registered mail or email, of
the cancellation decision;
3.
appoint
a certified auditor at the expense of the Developer to audit the
financial position of the project and verify the amounts paid to the Developer
or deposited in the project's Escrow Account, as well as the amounts that have been expended; and
4. request the project's Escrow Agent, or the
Developer where any payments are not made
through the Escrow Account, to refund the amounts deposited in the Escrow
Account or paid to the Developer to the parties entitled to these amounts no later than
fourteen (14) days from the date of
cancellation of the project.
If the funds in the Escrow Account of the project are
insufficient to refund the purchasers the amounts owed to
them, the Developer must refund these
amounts to them no later than sixty (60) days from the date of
the project cancellation decision, unless RERA decides
to extend this period based on valid reasons.
If the Developer fails to refund the amounts owed
to the purchasers within the period set forth in Article (26) of this
Resolution, RERA must take all necessary actions to preserve
the rights of purchasers, including
referring the matter to the competent
judicial authorities.
This Resolution comes into force on the day on which it is
issued, and will be published in the Official Gazette.
Hamdan
bin Mohammed bin Rashid Al Maktoum
Crown
Prince of Dubai
Chairman
of the Executive Council
Issued
in Dubai on 14 February 2010
Corresponding to 30 Safar 1431 A.H.
©2020 The Supreme Legislation Committee in the
Emirate of Dubai
[1]Every
effort has been made to produce an accurate and complete English version of
this legislation. However, for the purpose of its interpretation and
application, reference must be made to the original Arabic text. In case of
conflict, the Arabic text will prevail.