I have recently been made redundant and am in the middle of purchasing an off-plan apartment from one of the large developers in Dubai. I have paid the cash component and the balance is due on completion. I was going to settle with a mortgage but clearly I am now not in a position to secure a mortgage due to unemployment. The property has already been registered in my name with the Dubai Land Department and I have signed the developer’s sales and purchase agreement.

The development has been delayed for six months and is scheduled to handover in December this year – although it looks as if there will be a further delay. My preferred scenario is to get my cash returned by the developer. I accept I would lose the fees I paid to have the property registered, however, I think it is very unlikely the developer would return my money anyway. Alternatively, I may be able to use the cash I paid to the developer to purchase outright (no mortgage necessary) a studio or one-bedroom from one of the developer’s many new and current projects in Dubai? JT, Dubai

You should inform the developer of your situation as quickly as possible to come up with a possible solution that benefits all. Communication is key in these situations especially as the problem you find yourself in is not of your choosing. Swapping projects could be a possibility assuming the developer has available inventory to share.

Should you encounter a negative response – if the developer is unable or willing to offer alternatives – it is important to note that last year an update was issued on the law related to “the interim property registration”. This is Law No (19) of 2017, which partially amended Law No (13) of 2008. The new version clearly sets out the procedures to be applied in cases of breaches of sale contracts by a buyer. In such an event, the developer must notify the DLD of such a breach.

Once the notification is received, the DLD can give a 30-day notice to the buyer. The notice must be dated and given in writing and delivered to the purchaser directly by registered mail, email or any other method specified by the DLD. If the developer and buyer subsequently reach an amicable settlement, it must be added to the sales contract and signed by both.

But if the buyer fails to fulfil contractual obligations or a settlement cannot be reached, the DLD may issue an official document stating the developer has fulfilled the legal obligations, specifying the percentage of completion of the property.

This is where the new law sets clear guidelines on what a developer and property buyer can expect.

Given that your project is scheduled for handover in December this year, it would fall under the following statement/amendment: if the percentage of completion on the off-plan project is over 80 per cent, the developer can ask the purchaser to abide by the terms of the sale contract and confiscate the paid amount. He can call on the buyer to make the rest of the payment specified in the contract or otherwise request the DLD to auction the property to collect the dues.

The buyer is also obligated to pay expenses for the auction. The developer can void the sale contract, retain up to 40 per cent of the contract’s value and return the remaining amount to the buyer within a year of the date of contract cancellation – or within 60 days of the date of re-selling the property, whichever is earlier.

As you can see, it is unlikely that the developer will just allow you to walk away irrespective of the fees paid. Having said that, I’m sure they would sooner try and work something out.

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