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New laws to help investors
The Federal and Dubai governments have adopted a numbers of initiatives to further regulate the real estate sector during the past few months, which have been well-received by both developers and customers/investors. Here is a summary of the area each regulation covered, together with a link for further information:
| 1. |
Federal Law on Residency for Property Owners: A federal law has finally been issued regarding residency for home owners, granting renewable, six-month residency visas to owners of freehold property in the UAE. New visa guidelines stipulates that the property should be worth at least Dh1m and the owner must earn at least Dh10,000 per month, or the foreign currency equivalent. However, the visa does not give the property owner the right to work inside the UAE. For more information, click here.
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| 2. | Buyer-Developer Relationship: Issued by the Dubai Government, Law No. 9 relates to all buyer-developer contracts for off-plan units, regardless of when they were signed. Under Law No. 9, if the purchaser fails to make an installment payment, the developer must notify the Land Department or the Real Estate Regulatory Authority (Rera). Law No 9 benefits buyers and investors immensely because prior to its implementation there was no agency monitoring purchaser-developer transactions in Dubai. The law clearly stipulates that: |
| • | If the developer has completed 80% of a project, it can keep the full amount paid and request purchaser to settle the remaining amount of the contract price. If not possible, it can request the property be sold at auction |
| • | If the developer has completed at least 60 per cent of project, it may revoke contract and deduct up to 40 per cent of the purchase price of the unit as stipulated in contract. |
| • | If the developer has completed less than 60 per cent of project, it can revoke contract and deduct 25 per cent of purchase price as stipulated in contract. |
| • | If construction has not yet started, the developer may revoke contract and deduct up to 30 per cent of amount paid by purchaser. |
| • | Refund sliding scale for defaulters |
For a full copy of the law click here. For more information, click here
| 3. | Applying the Strata Law: The Real Estate Regulatory Authority is now issuing regulation to bring the Strata Law into effect. “Strata refers to the horizontal and vertical subdivision of space or land and buildings to form an ownership right that can be registered against the title of a common plot of land. This is different from property law, which deals with single ownership rights registered against a single plot of land. Strata law creates multiple ownership rights within one development. All rights will be registered against the single lot on which the building stands.” For more information, click here. |
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