Five years ago, I purchased a freehold property directly from a developer. The project is based in Ajman. In my purchase agreement, it is mentioned that all instalments of payment will be deposited in an escrow account. I paid the entire amount, as agreed to, in postdated cheques under a five-year instalment plan. The project has not commenced yet. When I contacted the Real Estate Department in Ajman, I found out that the project is not registered with the Real Estate Regulatory Agency and there is no escrow account for the project. As per the agency, the developer is not allowed to sell units unless he gets permission from it. In addition, after opening an escrow account with the Real Estate Regulatory Agency, all payments must have been deposited in that account. Instead, the developer has deposited my payments so far in his personal account. I did not get a conclusive settlement from the developer, and he also refuses to terminate the sale agreement and return the payments made so far. What is the legal way to get back my payments from the developer?
I would like to clarify to the questioner that he shall file a complaint of fraud and breach of trust with the Public Prosecution concerned in Ajman against the developer since the developer has not registered the project as per the decrees of properties which oblige the developer to register his name at the Real Estate Regulatory Agency as well as open an escrow account. He was also supposed to deposit the payments received from the questioner in the escrow account rather than in his own account. The questioner may also file a real estate case before the court concerned and request it to terminate the purchase contract, and refund his payments in full in addition to a compensation to cover all damages he has faced.
Third party manager
Does the new commercial companies law allow a limited liability company to appoint a third party as the manager instead of one of the partners? Does the third party manager have full power in the company?
Article No. 83 of Federal Law No. 2 of 2015 on Commercial Companies, Chapter 2, Management of the Company states the following: 1) The management of a limited liability company shall be undertaken by one or more managers as determined by the partners in the Memorandum of Association. Such managers shall be elected from the partners or third parties. If the managers are not appointed as per the Memorandum of Association or an independent contract, the general assembly of the partners shall appoint such managers. If there is more than one manager, the partners may appoint a Board of Directors. That board shall have such powers and functions as set out in the Memorandum of Association.
2) Unless the contract appointing the manager or its Memorandum of Association or Articles of Association provide for the powers of the manager, the manager shall be authorised to exercise full powers to manage the company and his acts shall be binding on the company, provided that the capacity of the manager is stated upon while doing such acts.
Based on the above, the new law does not require that the director should be from the partners.
— Questions are answered by lawyer Mohammad Ebrahim Al Shaiba of Al Shaiba Advocates and Legal Consultants