Off plan protection
Investors in off plan property in Dubai are hoping that new laws will protect them from an increasing number of developers who are failing to begin or finish projects on time...
There is growing disquiet that the economic downturn is affecting developers so much that they are trying to go back on signed contracts.
There is widespread agreement that if projects are not started or finished in time then the developers should give refunds but instead some are asking for more payments.
One investor said that he bought an off plan unit a year ago and construction has not yet started. 'I have already paid 30 per cent of the total price and the developer is now sending letters wanting more money,' he said.
Another investor fears that the developer on a project he has paid out for may not start work at all because of the economic downturn. 'I know some others are defaulting because work hasn't started,' she said.
'Refunds should be given and projects cancelled if construction has not started way beyond the date given but this isn't happening,' said another.
They want new draft laws to be rushed in to cope with the rapidly deteriorating situation. The first protects investors from start dates being put back and states that developers must own the land and complete 20 per cent of construction before selling off-plan.
The second new law links payment plans to construction progress, thereby forcing developers to start work and making sure investors pay only 20 per cent of the property price up-front.
Source: www.propertywire.com