Dubai: His Highness Shaikh Mohammad Bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai on Monday issued a decree to set up a judicial committee to liquidate cancelled real estate projects in Dubai.
The committee will provide settlements after the liquidation expenses are deducted. It will also be tasked with resolving grievances, operational procedures or other issues related to scrapped projects.
The committee’s decisions and rulings will be carried out through Dubai Courts. All rulings issued by the committee will be final and cannot be appealed.
Sultan Bin Butti Bin Mejrin, Director General of the Dubai Land Department, told Gulf News that all the cancelled real estate projects will be liquidated by 2015. “The committee will present a fast track for investors to solve their problem with developer who are not able to continue their project,” he added.
“The main role of this committee is to refund the money to investors by selling the developers’ assets in auction or through the money available from the deposits in escrow account.”
The committee will not only ensure protection of investors’ rights but will also save them time and energy as they need not approach different courts to hold the developers accountable.
Through this committee, the court will take up cancelled projects one by one and resolve outstanding issues through a single-window system whatever the number of investors and will get their rights back, Bin Mejrin said.
As per the decree, the committee is permitted to request the services of consultants, auditors and experts to audit the financial position of various cancelled projects. The developers concerned will bear all expenses for these services and consultations. Auditors and consultants will also verify the amount paid by the buyers to the developers, money deposited in the developer’s escrow account for the concerned project, as well as funds used in project operations.
Article No 3 of the decree forbids Dubai Courts and Dubai International Financial Centre courts from looking into any claims that now fall within the purview of the committee. Any claims or complaints submitted to these courts prior to the issuance of the decree will now be referred to the committee.
While the Land Department was able to solve most of the disputes between developers and investors, the cancelled projects represent those that fell through during the financial crisis, he said. “A number of developers have failed to complete their projects due to the financial crisis. Thus, special action should be made to liquefy these projects and help the investors who gave up in that situation.”
The committee will work without imposing any charges on investors, he said.
Property anlysts have welcomed the new committee.
The move is expected to encourage more investments in the Dubai property market, according to Chiheb Bin Mahmoud, Executive Vice-President and Head of Hotel Advisory for the Middle East and Africa at Jones Lang LaSalle. “It will improve visibility and transparency, and pave the way for the market to enter into a new phase of growth with stronger mechanisms and tools to ensure better protection and better functioning,” he said.
With tighter regulations being implemented, the Dubai property market could see more long-term investments and increased buying from end-users, said Mat Green, head of research for the UAE at CBRE Middle East. “One of the issues is that investors look at the Dubai property market with a short-term view. It would be ideal to see investments for the long-term,” he said.
Green added that the introduction of the legal team is a positive sign for the Dubai market. “Regulations being tightened show that the market is becoming more mature and developing,” he said.