Law No. (19) of 2020
Amending Law No.
(13) of 2008 Regulating the
Interim Real
Property Register in the Emirate of Dubai[1]
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We, Mohammed bin
Rashid Al Maktoum, Ruler of Dubai,
After perusal of:
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;
Law No. (7) of 2013 Concerning the Land
Department; and
Law No. (4) of 2019 Concerning the Real
Estate Regulatory Agency,
Do hereby issue this Law.
Article (11) of the above-mentioned Law No.
(13) of 2008 is hereby superseded by the following:
a.
Where a purchaser
fails to fulfil his contractual obligations under an Off-plan Sale agreement
concluded with a Developer, the following rules and procedures will apply:
1.
The Developer must
notify the DLD of the purchaser’s non-performance of his contractual
obligations. This notification must be submitted on the form prescribed by the
DLD for this purpose and must include the details of the
Developer and purchaser; a description of the Real Property Unit subject of the
Off-plan Sale agreement; a detailed account of the contractual obligations
breached by the purchaser; and any other details determined by the DLD.
2.
Promptly upon
receipt of the notification and verification that the purchaser is in breach of
his contractual obligations, the DLD must:
A.
serve a thirty (30) days’
notice on the purchaser requiring him to fulfil his contractual obligations
towards the Developer. The notice must be in writing and dated; and must be
delivered to the purchaser either in person or by registered mail with
acknowledgement of receipt, email, or any other means prescribed by the DLD;
and
B.
where possible,
mediate an amicable settlement between the Developer and purchaser, in which
case such a settlement must be attached as an addendum to the Off-plan Sale
agreement and must be executed by the Developer and the purchaser.
3.
If the notice period
mentioned in sub-paragraph (a)(2)(A) of this Article expires and the purchaser
fails to fulfil his contractual obligations or to reach a settlement with the
Developer, the DLD will issue an official document in favour of the Developer
confirming the following:
A.
the Developer’s compliance with the procedures stipulated in paragraph (a) of this
Article; and
B.
the percentage of
completion of the Real Property project subject of the Off-plan Sale agreement, calculated in accordance with the relevant standards and rules
adopted by RERA.
4.
Upon receiving the
official document referred to in sub-paragraph (a)(3) of this Article, and
based on the percentage of completion of the Real Property project, the
Developer may take any of the following measures against the purchaser without
recourse to courts or arbitration:
A.
Where the percentage of
completion of the Real Property project exceeds eighty percent (80%), the
Developer may:
1.
maintain the Off-plan Sale agreement
concluded with the purchaser, retain all amounts paid by the purchaser, and
claim the balance of the value of the agreement from the purchaser;
2.
request the DLD to
sell the Real Property Unit, subject of the Off-plan Sale agreement, by public
auction to collect the remaining amounts payable to the Developer; and hold the
purchaser liable for the costs arising from the sale; or
3.
unilaterally
terminate the Off-plan Sale agreement concluded with the purchaser, retain up
to forty percent (40%) of the value of the Real Property Unit stipulated in the
Off-plan Sale agreement, and refund any amounts in excess of this to the purchaser. In this
case, the Developer must refund the amounts owed to the purchaser within one (1) year from the termination of the
Off-plan Sale agreement or within sixty (60) days from the date of resale of
the Real Property Unit to another purchaser, whichever occurs earlier.
B.
Where the percentage of
completion of the Real Property project is between sixty percent (60%) and
eighty percent (80%), the Developer may unilaterally terminate the Off-plan
Sale agreement concluded with the purchaser, retain up to forty percent (40%)
of the value of the Real Property Unit stipulated in the Off-plan Sale
agreement, and refund any amounts in excess of this to the purchaser. In this case, the Developer
must refund the amounts owed to the purchaser within one (1) year from the termination of the Off-plan Sale
agreement or within sixty (60) days from the date of resale of the Real
Property Unit to another purchaser, whichever occurs earlier.
C.
Where the Developer
has commenced work on the Real Property project, having taken hold of the construction site and started construction works in
accordance with the designs approved by the competent entities, and the
percentage of completion of the Real Property project is less than sixty
percent (60%), the Developer may unilaterally terminate the Off-plan Sale
agreement concluded with the purchaser, retain up to twenty-five percent (25%)
of the value of the Real Property Unit stipulated in the Off-plan Sale
agreement, and refund any amounts in excess of this to the purchaser. In this case, the Developer
must refund the amounts owed to the purchaser within one (1) year from the termination of the agreement or
within sixty (60) days from the date of resale of the Real Property Unit to
another purchaser, whichever occurs earlier.
b.
Where the Developer
has not commenced work on the Real Property project for any reason beyond his
control, without negligence or omission on his part, or where the Real Property
project is cancelled pursuant to a final reasoned decision of
RERA, the Developer must refund all payments made by the purchasers, in
accordance with the procedures and rules stipulated in the above-mentioned Law
No. (8) of 2007.
c.
The rules and
procedures stipulated in this Article do not apply to land sale agreements
which do not involve any Off-plan Sale. Land sale will continue to be governed
by the terms of the land sale agreements concluded by the parties thereto.
d.
The rules and
procedures stipulated in this Article will apply to all Off-plan Sale
agreements concluded prior to or after the effective date of this Law.
e.
All measures,
decisions, and dispositions undertaken prior to the effective date of this Law
are deemed valid and enforceable and are not subject to any form of appeal,
provided that they
are made in accordance with
the rules and procedures stipulated in the legislation in force at the time of undertaking the same. This applies to the termination of Off-plan
Sale agreements after the effective date of the above-mentioned Law No. (13) of
2008, except where that termination is revoked by a definitive judgement rendered by a competent court prior to the
effective date hereof.
f.
The rules and
procedures stipulated in this Article are considered part of public order, and
failure to comply therewith will result in nullity of the legal act in
question.
g.
The rules and
procedures stipulated in this Article will not preclude the purchaser from
having recourse to courts or arbitration.
Any provision in any other legislation will be repealed to the
extent that it contradicts the provisions of this Law.
This Law will be published in the Official Gazette and will come
into force on the day on which it is published.
Mohammed bin Rashid Al Maktoum
Ruler
of Dubai
Issued in Dubai on 24 November 2020
Corresponding to 9 Rabi al-Thani 1442 A.H.
©2021 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.