What You Need to Know About Delays in Buying Property Under Construction in the UAE
Buying property under construction in the UAE can be a lucrative investment, but delays in project completion can lead to significant inconveniences for buyers. It is particularly important to know your rights and the options provided by UAE legislation to protect your interests.
Legal Protection for Buyers During Delays
The legal system of the UAE provides several key protections for buyers of property under construction. In particular, Sale and Purchase Agreements (SPAs) include important conditions that regulate the completion process and the transfer of risks between parties. For example, if a project is completed more than 80%, the buyer must adhere to the contract terms or risks losing up to 40% of the payment.
One critical condition is the “Completion and Risk Transfer Condition,” which sets the anticipated project completion date and allows for extensions under certain circumstances such as technical issues or changes in the construction process. If the developer fails to complete the project on time, the buyer has the right to terminate the contract.
Regulation in Dubai
Dubai operates under a strict regulatory framework, including Escrow Account Laws (Law No. 8 of 2007), which require developers to open separate accounts for each project and deposit all buyer payments into these accounts. This ensures protection of buyers’ financial interests in case of financial issues or project delays.
Additionally, Law No. 13 of 2008 mandates that sales of off-plan properties in Dubai be registered with the Dubai Land Department (DLD), providing additional assurance for buyers in case of disputes or delays.
Practical Recommendations
Prospective buyers should thoroughly verify the project’s registration with the Real Estate Regulatory Agency (RERA) and details of the escrow account to ensure the legality and security of their investments. Furthermore, consulting legal experts is recommended to fully understand SPA conditions and potential compensation mechanisms in case of delays or non-performance by the developer.
These measures help minimize risks for buyers and ensure protection of their rights amid the instability of the off-plan property market in the UAE.
SPI Dubai brokers provide investors with necessary tools and expert guidance to minimize risks when investing in off-plan properties in the UAE. Our company conducts detailed checks on all projects for registration with RERA and the presence of escrow accounts, ensuring the legality and transparency of transactions. With extensive market experience and strict ethical standards, SPI Dubai provides clients with confidence in the reliability of their long-term investments.
