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RERA: Understanding the property register law in Dubai

2015-09-22 13:50:42

Contractors and sub-contractors have a responsibility to register their projects

Understanding your responsibilities as both a developer and sub-developer is an important part of the property industry in Dubai. Below is RERA’s Law 13 (and amendments from Law 9) with regards to the regulating the interim property register in Dubai.

Martin Fullard, Guides Writer

 

Law No. (9) of 2009 amending Law No. (13) of 2008

 

Regulating the Interim Property Register in the Emirate of Dubai

Article 1

This Law will be cited as “Law No. (13) of 2008 Regulating the Interim Property Register in the Emirate of Dubai”.

 

Article 2 - Amended; Law 9 of 2009

The following words and expressions will have the meaning indicated opposite each of them unless the context implies otherwise:

Emirate The Emirate of Dubai.

Department The Land Department.

RERA The Real Estate Regulatory Agency.

Property Register The property register maintained by the Department.

Interim Property Register The documents maintained by the Department in written or electronic format in an electronic record in which sale contracts, Off-plan Sales, and other off-plan legal dispositions of real property are registered prior to inclusion in the Property Register.

Real Property The land and any fixed structure constructed on it.

Real Property Unit Any designated part of Real Property including any part designated as off-plan.

Off-plan Sale The sale of designated Real Property Units Off-plan or of those which are under unfinished.

Master Developer Any person licensed to engage in real estate development and the sale of Real Property Units to third parties in the Emirate.

Sub-developer Any person who undertakes part of a real estate development project of a Master Developer in accordance with a mutual agreement.

Real Estate Broker Any person who undertakes the real estate brokering business in accordance with Bylaw No. (85) of 2006 Regulating the Real Estate Brokers Register in the Emirate.

Competent Entities The entities authorised to license and register real estate development projects in the Emirate..

 

Article 3

1. Any disposition that occurs in respect of any Real Property Unit sold off-plan will be entered in the Interim Property Register, and any sale or any other legal disposition that transfers or restricts ownership or any ancillary rights will be void unless entered in that Register.

2. Any developer, who disposed of a Real Property Unit by way of sale or any other disposition that transferred or encumbered a Real Property Unit before this Law came into force, must apply to the Department to enter such disposition or encumbrance in the Property Register or in the Interim Property Register, as the case may be, within a maximum of 60 days from the date on which this Law comes into force.

Article 4

No Master Developer or Sub-developer may commence a project or dispose of its Real Property Units by way of Off-plan Sale before taking possession of the land on which the project will be implemented and obtaining the required approvals from the Competent Entities in the Emirate. In all events, the Department must designate the entry of the Real Property as “under development”.

Article 5

The application to enter a Real Property Unit in the Interim Property Register must be submitted on the form prepared for such purpose provided that all required information and documents are provided in accordance with the rules and procedure adopted by the Department.

Article 6

Real Property Units sold off-plan and entered in the Interim Property Register maintained by the Department may be disposed of by way of sale, mortgage, or any other legal disposition.

Article 7

No Master Developer or Sub-developer may charge any fees on the sale, resale, or on any other legal disposition of the Real Property Units which are completed or sold off-plan except those administrative costs which are approved by the Department to be received by the Master Developer or Sub-developer from third parties.

Article 8

Developers must enter completed projects in the Property Register maintained by the Department once they receive the completion certificate from the Competent Entities. This includes entering sold Units in the name of purchasers who fulfilled their contractual obligations in accordance with the procedure adopted by the Department.

For the purposes of this Article, the Department may, either upon the request of the purchaser or upon its own initiative, register in the Property Register in the name of the purchaser a Real Property Unit entered in the Interim Property Register which was sold off-plan, provided that the purchaser fulfilled all his contractual obligations.

Article 9

If a developer wishes to market his project through a Real Estate Broker, the developer must contract with a certified Real Estate Broker in accordance with the terms and conditions stipulated by Bylaw No. (85) of 2006 Regulating the Real Estate Brokers Register in the Emirate of Dubai. The developer must also register that contract with the Department.

Article 10

No developer or Real Estate Broker may enter into a private sale contract to dispose of Real Property or Real Property Units by way of Off-plan Sale in projects which are not approved by the Competent Entities. Any contract which is entered into prior to obtaining such approval will be null and void.

Article 11 - Amended; Law 9 of 2009

If the purchaser breaches any of the terms of the sale contract of the Real Property Unit concluded with the developer, the developer must notify the Department of such breach, and the Department must give a thirty (30) days’ notice to the purchaser, in person, by registered mail or by email, to fulfil his contractual obligations.

2. If the notice period mentioned in paragraph (1) of this Article expires and the purchaser fails to perform his contractual obligations, the following provisions will apply:

a. where the developer has completed at least 80 per cent of the real estate development project, the developer may retain all payments and claim the balance of the contract value from the purchaser, failing which the developer may request the sale of the Real Property by way of public auction to recover the balance of the amounts to which he is entitled;

b. where the developer has completed at least 60 per cent of the real estate development project, the developer may terminate the contract and retain a maximum of 40 per cent of the value of the Real Property Unit stipulated in the contract;

c. where the developer starts the construction works but fails to reach the 60 per cent threshold of the real estate development project, the developer may terminate the contract and retain a maximum of 25 per cent of the value of the Real Property Unit stipulated in the contract; or

d. where the developer, for reasons beyond his control but without any negligence on his part, fails to start the construction works, the developer may terminate the contract and retain a maximum of 30 per cent of the payments made by the purchaser.

3. For the purposes of items (c) and (d) of paragraph (2) above, “construction works” will mean the developer taking possession of the real estate development project site and starting construction works in accordance with plans approved by Competent Entities.

4. For the purposes of items (b) and (c) of paragraph (2) above, the developer must return any amounts payable to the purchaser within a period not exceeding one year of the termination date or within a period not exceeding 60 days of selling the Real Property Unit, whichever is earlier.

5. Notwithstanding paragraphs (1) and (2) of this Article, RERA may, based on a reasoned report, decide to revoke the real estate development project, in which case the developer must return all payments received from purchasers, in accordance with the procedure and provisions stipulated in Law No. (8) of 2007 Concerning Escrow Accounts of Real Estate Development in the Emirate of Dubai.

6. The provisions of this Article will not apply to sale contracts for land which is not disposed of by of Off-plan Sale. Those contracts will be governed by the terms of the contract concluded by the parties.

7. The provisions of this Article will apply to all contracts concluded before this Law comes into force.

Article 12

The area of a sold Real Property Unit will be deemed to be correct. However, if any increase in the area of the Real Property Unit takes place after delivery of the Unit, the developer may not claim any increase in price in consideration for such increase. However, if a decrease in the area occurs, then the developer must compensate the purchaser for such decrease unless such decrease is inconsequential, in which case the developer is not liable for compensating the purchaser for such decrease.

Article 13

If the Department proves that a developer or a Real Estate Broker has committed any act or omission in breach of the provisions of this Law or any other applicable legislation, the Director General of the Department must prepare the relevant report and refer the matter to the competent entities for investigation.

Article 14

The Chairman of the Executive Council will issue the regulations required for the implementation of the provisions of this Law.

Article 15

This Law will be published in the Official Gazette and will come into force on the day on which it is published.

Call centre 6005 55556

Source Dubai Land Department