Dubai: A sharp upswing in construction activity in Dubai is playing into the hands of developers who are putting buyers in an awkward position only to demand payments.
Some developers have hit on a plan to reach the 40 per cent mark in their projects in the shortest possible time, which would allow them to issue default notices to buyers who have missed instalments.
If the investors are not in a position to renegotiate the instalment terms, developers will then be able to repossess the property and get it on to their books. Such property could then be sold when market conditions are deemed proper or placed in the rental market by the concerned developers. In effect, this is a win-win situation for developers.
"What this does is tilt the balance decisively in favour of developers from the present legal perspective," said Samir Munshi, managing director at Silver Heights, which is into real estate services including investment. "As things stand now, the moment developers reach the 40 per cent mark, they are home and dry. This is irrespective of whether their projects have been delayed for years."
The fresh impetus on the construction side should move up a gear or two in the post-Ramadan period. "Developers are using whatever means they possess now to get their projects back on track ahead of any deadline imposed by the authorities," Munshi added. "Rather than get their projects named as cancelled, they are restarting construction and hope to extract better deals from investors. Only the investors stand to lose if they fail to renegotiate."
