Property Handover Delay in Dubai | Cancelled Projects in UAE

Investors and builders in Real Estate sector are commonly hurdled by issues pertaining to the timely hand over of the property. This kind of dispute often causes enormous financial loss from investor’s pocket. Therefore, UAE legislators implemented laws to protect the claims of the investors who opt to deal with properties in off plan cases. However, several / difference legal options available for handover delays would mainly depend upon the terms and conditions mentioned in the contract.

Take for example, if the main reason of delay is within the context of force majeure (clause in the contract exonerating liability for unavoidable circumstances, such as catastrophes), then the purchaser will be unable to terminate the contract nor claim compensation for delay from the contractor/developer.

However, if the main cause of delay is imputed primarily due to the failure of the contractor/developer to perform its obligations set out in the contract resulting to breach thereof, then the purchaser may resort to the following legal remedies:

• Termination of the agreement
• Claim compensation for such delay (this must be expressly stipulated in the signed agreement between the parties and the purchaser must prove that the delay has caused substantial losses which is detrimental to the purchaser). Pursuant to UAE law, purchaser can claim compensation for the following: (i) Interest; (ii) Deposit; (iii) Legal and Agent fees; and (iv) any other amount accrued as determined and proved.

The above-mentioned legal remedies can be done by filing a claim in Dubai courts for litigation or if the parties have agreed in the contract for alternative dispute resolution, an arbitration case can be filed. Decision decreed in both the resolving avenues will be binding on all the parties related to the dispute.

In some instances, investors can also inquire with the Real Estate Regulatory Authority for delayed projects and cancelled project before the committee if the property is cancelled by RERA. Thus, Judicial Committee for liquidation has exclusive jurisdiction over any dispute related to cancelled projects and no other court or arbitration proceedings are permitted to decide on any stalled projects. Investors have the right to lodge their claims directly to the Judicial Committee in this regard.

Hence, before filing any legal case or seeking any settlement, it is very important to first review the terms and conditions of the signed contract between the parties. It is also noteworthy to check whether the property is registered with DLD and approved by RERA. Conducting a due diligence prior to lodging a claim will greatly be an advantage towards the investor in getting the aid needed and resort to the best remedy to protect its rights and interest.

If you are facing issued of property handover delays, legal opinion and assistance from experts will be indispensable. We at Al Reyami Advocates & Muhyealdeen International Legal Consultants has expert property lawyers in Dubai that can help you review and revisit the contract and provide you our legal opinion and assist you properly in enforcing your legal rights and remedies provided under the laws of United Arab Emirates. You may contact us for further information and consultation.

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UNDERSTANDING TENANCY AND THE SETTLEMENT PROCEDURE FOR RENTAL DISPUTES IN DUBAI

Tenancy Law or Law No. 33 of 2008 regulates and embodies the legislations concerning the rights, obligations and framework the relationship between Landlords and Tenants in the Emirate of Dubai. Whilst, the Rental Disputes Centre (RDC) acts as the main forum and receives dispute application for resolving tenancy disagreements and cases.

Rental Disputes Centre (RDC) administers adjudication procedures enhancing rental judicial system developed to simplify the resolution process systematically and come up to speedy disposition of tenancy disputes.

Except for cases already assigned to special judicial court and cases related to long-term lease or financial lease contracts falling under the umbrella of Law No. 7 of 2006 for real estate registration, the jurisdiction of RDC extends to:

• All rental disputes arising between tenants and landlords located in the Emirate of Dubai;
• Counterclaims as well as requests for ad interim or expeditious action from either party to the tenancy agreement; and
• Appeals from decisions and judgments in accordance with the provisions of the decree

OVERVIEW: Process and Procedures

RDC consists of two sectors: JUDICIAL and ADMINISTRATIVE. Administrative sector is mandated to provide technical and administrative support for the judicial sector. Judicial sector comprises of the following departments:

1. Arbitration and Reconciliation Department is tasked for settling rental disputes amicably within 15 days, unless otherwise extended by the supervising judge. Once the parties reach a settlement, an official settlement agreement will be issued which will be executory in nature. In the event that parties failed to reach an amicable settlement, the dispute will be elevated to the First Instance Department.
2. Department of First Instance consist of committees. These committees shall determine and decide if a rental dispute falls within the jurisdiction of RDC. The First Instance judgments are appealable to the Appeal Department within 15 days from the date following the issuance of the judgment.
3. Department of Appeal committees shall adjudicate appeals (only if rent claim is more than AED 100,000, except if it falls under special circumstances pursuant to Article 17(1) of Law No. 26 of 2013) filed against decisions issued by the First Instance Department unless otherwise its outside the realm of its jurisdiction. The judgments issued by the Appeal Department are final and executory.
4. Law Enforcement Department will execute and enforce all final judgments decreed by the First Instance and Appeal departments.

DOCUMENTATIONS AND FEES

Supporting documents required by the Centre includes:

• Claimant’s Emirates ID or Passport or Company’s commercial license
• Original Tenancy Agreement
• Copies of cheques given to the landlord (if any) or Statement of Accounts
• Notarized Power of Attorney issued by the party to its authorized representative (if any)

Rental dispute cases brought before the Centre generally involve fees of:

• 5% of the annual rent of the leased property (no less than AED 250 BUT NOT MORE THAN AED 20,000)
• Other fees such as: deposit of rent with RDC, expert’s fees, notice publication in the event the other party fails to show up during hearings)

CONCLUSION

As the judicial arm aimed to ascertain rental disputes in a speedy, systematic and bringing about steadiness in regards to tenancy relationship and matters concerning between the landlords and tenants, RDC is committed to continued upgrade of its working mechanism that enables rental parties to ascertain their legal positions and guides them in the legal proceedings at various stage until the finality or resolution of rental disputes within the Emirate of Dubai. For other legal queries regarding property law in Dubai UAE, Contact trusted lawyers in Dubai UAE and set an appointment.

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Divorce Settlement in Dubai UAE for Finance, Property & Assets for a Husband & Wife

In terms of financial gains, there are no laws with respect to a divorce settlement. The property assets will remain in the name of their respective owners and co-owned property will be dealt with under general civil laws.

The finances and maintenance of spouses under UAE laws cannot be claimed by the husband to his wife even when he holds custody of the children but a wife may do so even if she has wealth.

An application has to be made to evaluate the financial position of a couple that is planning separation. If the parties are Muslim and are married to enforce it an application has to be made by the receiving party and not the giving party which can either be husband or wife who is going to divorce cannot enforce a settlement.

Any party can apply to the court for sale of their jointly owned property or for someone else to buy out shares. The basic assumption is that both parties made equal payments in property purchase but if one party made a higher investment then capital share will be large. However, UAE courts have jurisdiction over property owned within UAE and not abroad otherwise jointly owned bank accounts and some other assets will be dealt the same.

The claims that can be made by the wife are as follows,

1- The first claim can be made for not supporting her during the last year.
2- The Second claim can be made for supporting her during the waiting period called “Nafket Eda”.
3- To cover moral damage of the wife after being divorced by her husband against her will a claim can be made by her covering 25% to 40% of husbands salary or income called “Nafket Motaa”.

As per child maintenance rules for a divorce in UAE implies that either a claim for a carer’s allowance be made depending on the husband’s income or the standard of living for a child would be equal to what he already had which includes schooling, medical, rent and other expenses.

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There are some obligations for the tenant that he or she must fulfill to avoid any legal charges against them which are as follows,

a- No changes can be made to the property by the tenant prior to landlord and higher authorities approval

b- There is a requirement to pay certain amount of deposit to the landlord which will be returned once the tenancy contract expires

c- Rent has to be paid on due date or else legal action would be taken against the tenant

d- Maintaining the property in a manner as any ordinary individual would take care of his own property

e- As per the rule the tenant may not remove the leasehold improvements made by the tenant

f- Without the written consent of the landlord, the tenant cannot invite someone for the use or sub lease the property to third party

g- The tenant must hand over the property the same means the condition should not deteriorate except ordinary wear and tear

h- If not stated in the contract the tenant has to pay fees and taxes for the use of property or for sub lease

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As an expat living in Dubai requires that you should familiarize yourself with tenancy rules and regulations which of course include the tenancy contract. Following are the rights of the tenants,

a- No changes are to be made by the landlord to the amenities or annexes of the property preventing its full use
b- Any decoration work or any other such work that requires approval from the authorities must be given to the tenant provided that does not affect the structure
c- The landlord is bound by law to give the house in good livable condition which is not bad allowing its full use
d- All the repairing and maintenance is to be done by the landlord and not the tenant during the term of the contract without affecting tenant’s usage
e- Rent can only be increased as per RERA rental bracket for contract renewal for different areas and properties
f- For any reason the landlord is not allowed to withhold the security deposit if done so then tenant can file complain to rent dispute committee
g- Disconnection of services to the property by landlord is not allowed if such incidence happens then tenant can complain to the police or the rent dispute committee for compensation

Please note that the contract can only be terminated with the mutual consent of both parties.

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Purchasing Property in Abu Dhabi

UAE property laws differ within cities or provinces such as property laws in Abu Dhabi are not the same as in Dubai. This relates to the sale and purchase by expats and it could be said that the conditions in Abu Dhabi for expat purchases have not evolved to the same extent as those for expats in Dubai.

As per Abu Dhabi Law 19 of 2005, UAE nationals are permitted to buy and sell property whereas GCC nationals and expats will also be able to own a property in selected areas such as Investment Zones where they can purchase flats, villas or land, however the main difference will be that GCC nationals can sell or purchase freehold.

The Investment Zones include areas such as Yas Island, Saadiyat Island, Reem Island, Al Reef, Raha Beach and more.

The types of ownership for non-GCC nationals or expats include,

1- Usufruct
Under this ownership they may hold only the rights to their flat or apartment but not the land. The person can benefit from the property owned by the third party, as per Article 4(1) the person can benefit till the lease of up to 99 years.

2- Musataha
This method is more commonly used to purchase villas or land as under this ownership one can make full use of land owned by the third party. As per Article 4(1) the right can be exercised for 50 years further extendable once for up to 50 years.

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Duties of a Property Broker in UAE | Property Lawyers in the UAE

Being a Property Broker in the UAE is effectively being the middle man between the buyer and the seller in relation to change of ownership of a fixed asset (a property)

As per property laws of UAE, the duties and responsibilities of a broker include:

a- Verify if the property title deed is genuine
b- Keep a record of all transactions with supporting documentation
c- Not be a part of or facilitate any transaction that is against the law
d- The broker and the developer are governed under a contract that should be registered with the Dubai Land Department (DLD)
e- The broker may take copies of the documents relating to the property for the transaction
f- Confidentiality
g- As per trusteeship rules, act as a trustee on behalf of the client
h- Carry out due diligence to ensure the developer is in good standing and is registered with the DLD
i- In the event of a breach of contract, as per law the broker should give up fees or claims
j- Where more than one broker is engaged, they are to be held jointly responsible for the transactions unless otherwise specified

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What is HEBA in the UAE

The unconditional and immediate transfer of property without any consideration (payment or reservation) by one person to another is known as Heba, under Muslim law.

In other countries, the term GIFT may be similar to what is known as HEBA but for the purpose of this article, we are referring to the donation of property to another person without the expectation of anything in return.

Once Heba has occurred, the transaction is final. In the event Heba was granted during a period of sickness, however, this could be contested by the potentially rightful heirs of the property in question. Similarly, if the donation was made under threat or duress, it can be revoked which also applies to cases where the gift was granted because of dishonest or deceitful action.

The recipient must accept the gift and may be cancelled only after the recipient’s consent while the giver still lives. It may also be reversed by court order in case Heba was provided under stress or deception, or by a person who has not the legal competence or capacity to grant it, even if the recipient does not accept the donation. Heba may be delivered by written document or with witnesses, however, it is advisable to have both.

HEBA Law in Dubai

There are 2 conditions whereby Heba can be granted at a future date which relate to death and birth. Heba can be granted whereby the transfer of the property occurs on the death of the current owner. It is also possible to enact Heba for the benefit of an unborn child provided that the child is born within 6 months of the Heba being given.

As with most aspects of law, it is strongly advisable to have any Heba you wish to grant clarified in writing and to have a witness to further authenticate its validity. In principal, Heba can be given verbally but has a strong possibility to be contested later if this cannot be verified clearly.

An important point to note. Heba can be refused by the person it has been granted to so may be advisable to ensure the intended recipient is happy to receive it.

Dubai Real Estate Lawyer | UAE Property Lawyers

The relaxation of the law allowing expats to purchase property and resulting boom in property demand and prices in the mid ‘noughties’ was shortly followed by the infamous 2008 collapse of the market. The subsequent cautious recovery highlights the complexity of UAE property law and the requirement to exercise buyer caution more widely appreciated.

According to UAE law, you may buy a property from a developer ‘off-plan’ by paying a 10% to 15% down payment with the balance payable over a period determined either by milestones in development or even, in some cases after the completion and handover of the project. It is imperative you ensure that the developer you are committing to is registered with the Dubai Land Department and that any payments are made to an escrow bank account.

Dubai Real Estate Lawyers And Their Role In The Process

Understanding the documentation involved and what rights and protection it offers all parties varies depending on the quality of that documentation. Make sure you fully understand the commitment and expectations before signing these documents.

If you choose to employ the assistance of a broker in making a purchase (or indeed if one is forced upon you by the developer), you will need to clarify that they are registered with RERA. You can do this by asking to see their ID card or simply visit the Land Department for verification.

Another important document in a property transaction is the Sale and Purchase Agreement which will form the ‘contract’ of your commitment to purchase as well as the parameters and commitment for the developer to build and deliver the project.

Ensure that the agreement clearly outlines and determines the date for completion of the project, actual milestones to be reached to trigger any payments and the penalties and exit clauses if these are not met. You will also need to understand which court is authorized to hear any dispute should future problems arise.

As purchasing a property is one of life’s ‘major’ purchases, the assistance of professional property lawyers proves to be invaluable in protecting your investment.

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