property law No 9 A Relief
Rera law # 9 about Cancellation of Projects and Refunds on installaments paid by the customer
By Muby Asgher, Features Editor
Published: May 18, 2009, Gulf News
Although no announcements are scheduled until the end of the month, RERA's CEO Marwan Bin Ghalita said that he expected about 25% of the projects in Dubai would be cancelled. According to RERA's Law no. 9, investors who put their money into projects which are subsequently cancelled by the Dubai Government will get a full refund. There are three ways a project could be considered not feasible. It could be a RERA decision, or the developer can request a cancellation (provided the investors are paid, or there are no investors).
A third factor that could lead to the cancellation of a project is if a large number of investors file a complaint.
The news comes as a relief to both buyers and developers. With the property sector in Dubai having slowed down drastically, and with many projects coming to a halt, some developers are having trouble financing the completion of their projects due to investors defaulting on payments.
Buyers who have been making regular payments on properties where construction hasn't even begun, also stand to benefit from the refund if the project is cancelled. Mohanad Alwadiya, managing director of Harbor Real Estate, says that in Dubai alone, an estimated $72.5 billion (Dh367 billion) worth of projects have been delayed with more than $3.2 billion (Dh12 billion) cancelled, while there are many developments that are still not declared as cancelled or delayed, but are unofficially on hold for review.
The cancellation of projects ties in with RERA's revised estimation of residential units to be handed over the next two years. "RERA currently estimates that 30,000 units are scheduled to be made available in 2009 and 45,000 in 2010. At the height of the market, the number being touted was 145,000 for the same period, a drop of almost 50% in planned releases," says Mohanad.
RERA joins forces with regulatory Ajman agency
Dubai's Real Estate Regulatory Agency (RERA) and Ajman Real Estate Regulatory Agency (ARRA) have signed an agreement to unify real estate-related strategies between the two emirates and communally identify blacklisted agents and developers.
The agreement, signed by RERA's CEO Marwan Bin Ghalita and ARRA's director-general Omar Barghouthi, will emphasise the need to create a strategy to develop, modernise and organise real estate-related activities. The database is expected to be ready soon and will then be available to the public.
100,000 The fee (in Dh) developers pay for registering with ARRA