All property must register with the Land Department, even
before it's builts
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.
Disclaimer: The following text comes from the Dubai Land
Department’s RERA Law.
“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”
-Article 4Tweet this
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
RERA: Dubai rental law for landlords, tenants
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
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