Dubai offplan property buyers find missing installments come at a steep price
Even paying Dh1m or more is no guarantee for buyers with missed payments
Dubai: Keep paying those instalments… or you are at clear risk of forfeiting all rights to the property you bought.
More investors are getting hit with notices from developers for failing to keep up with the payments schedule. And in many cases, even when those projects they bought into are delayed by a year or more.
“It’s particularly hard to have any sympathy for those developers retaining the money of those who, for one reason or another, aren’t able to stick to their payment plan,” said a buyer who missed out on two installments and is at risk of losing all of the near Dh2 million he has paid to date.
“Especially, when work on the development had stopped or been delayed for a long time. This effectively means that buyers, including myself, were financing the project.
“I know I’m at fault for missing the instalments – but these are exceptionally difficult times for all.”
Not the sole one
Other investors too are finding that developers are becoming more insistent about sticking to payment schedules… even in instances where the COVID-19 breakout resulted in changes to the buyer’s financial or employment status.
During the initial weeks and months of the pandemic, developers, it would seem, were far more amenable to make changes rather than lose their buyers altogether. Especially those developers who had launched offplan projects in 2018-19 and had received only the initial payments.
Wherever possible developers are trying to accommodate buyers facing issues – only as long as this doesn’t impact on their cashflows drastically
Not much respite
But developers who were well into their project development are less likely to go easy on rescheduling payments. What they may do is transfer the buyer’s interest/equity into a more recent project and where the payments also start at a later date.
This transfer, however, comes with a catch. “It can happen as long as the value of the new property is higher,” said Niraj Masand, Director at Artha Realty, a consultancy. “Even then, these will be done only on a case-by-case basis.
“Wherever possible developers are trying to accommodate buyers facing issues – only as long as this doesn’t impact on their cashflows drastically.”
Post-handover plans
But property buyers are saying that the current situation offers them no respite. Many are scrambling whatever financial means they have to keep up with the payments.
Even those who bought property thinking that they will have years to pay off after handover are in a bind. The two-, three- or even five-year post-handover payments kick in…. after handover.
Which means that whatever payments they are obliged to make before the handover remain intact. So, whether it’s 20 per cent of 40 per cent of the property value that needs to paid, it better be.
“When you’ve coughed up between Dh1 million to Dh2 million for an offplan home, and the same market conditions that affected your finances have delayed the hand over by more than three years, is it fair the developer keeps all the money?,” asks one property owner.
Any legal option?
According to legal sources, the affected investors can approach the Dubai Land Department to work out some sort of understanding and whereby they don’t lose out on the property they have paid instalments on.
But this is a process that takes time. And if one of the options is for the developer to find another buyer, then in the current market situation, it’s unlikely that the original value will be recovered.
For the original property investor, it’s definitely not a good place to be in…