United Advocates

Investing in Off-Plan Property in Dubai: Your Rights as an Investor

Investing in an off-plan property in Dubai can be a lucrative opportunity, but it’s essential to understand your rights and conduct thorough due diligence before signing any agreements. Here’s a comprehensive guide on what to consider and your rights if the property is not handed over on time.

Due Diligence Before Signing an Agreement

Before committing to an off-plan unit, it’s crucial to gather detailed information about the project and the developer. Here are key steps to follow:

  1. Registration and Escrow Account:
  • Verify if the real estate project is registered with the Real Estate Regulatory Agency (RERA).
  • Confirm the existence of an escrow account for the project and obtain its details.
  1. Project Completion and Developer Credentials:
  • Check the percentage of project completion and the expected date of completion.
  • Ensure the developer is registered with RERA and owns the development land or has a valid development agreement with the landowner.
  • Verify that the developer has all necessary permits and approvals from the Dubai Land Department (DLD) and RERA to sell units off-plan.

By obtaining satisfactory details, you can assure yourself that you are investing in a bona fide project.

Rights Under the Escrow Accounts Law

Law No. (8) of 2007 Concerning Escrow Accounts for Real Estate Property Development in the Emirate of Dubai provides significant protections for investors. Here are the key provisions:

  1. Mandatory Escrow Account:
  • Developers must open and maintain a separate escrow account for each real estate project. This account is exclusively dedicated to the project and protected from the developer’s creditors (Articles 6 and 9).
  1. Deposit of Payments:
  • All payments made by investors must be deposited into the project’s escrow account (Article 7). This ensures that the funds are used solely for the completion of the specific project.
  1. Access to Escrow Records:
  • Investors or their representatives can access and request copies of their escrow account records (Article 12). This transparency helps investors monitor the proper use of their funds.
  1. Protection in Case of Non-Completion:
  • If a project is not completed, the escrow agent, in consultation with the DLD, must take necessary measures to protect the rights of depositors, including ensuring project completion or refunding payments (Article 15).

Action Steps if Property Handover is Delayed

If the developer fails to hand over the property on time, you can take the following steps:

  1. Consult the Escrow Agent and DLD:
  • Approach the escrow agent and DLD for guidance and to ensure your rights are protected under the Escrow Accounts Law.
  1. Review the Sale Purchase Agreement (SPA):
  • Carefully review the SPA for terms related to project completion timelines and extensions. Ensure you understand your rights and the developer’s obligations under the agreement.
  1. Seek Legal Advice:
  • United Advocates can provide expert advice on your specific situation. We can assist you in understanding your rights and the legal remedies available to you.

By following these steps and understanding your rights, you can protect your investment in an off-plan property in Dubai and take appropriate action if the property is not handed over on time.