Dubai: The Dubai Government has formed a new judicial committee that will deal with cases involving bounced cheques in the property sector.

His Highness Shaikh Mohammad Bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai on Thursday issued a decree setting up a judicial committee to this effect.

The committee will settle cases related to bounced cheques whether issued by a buyer to a developer, or from tenants and beneficiaries of long-term units under the provisions of Law No 7 of 2006 regarding real estate registration in Dubai, WAM reports.

Judgments pronounced by the committee will be decisive and cannot be challenged and will be implemented through the execution department of the Dubai Courts.

The committee will consist of a chairman, to be selected by appeal court judges in the Dubai Courts, and two members, the first a Dubai primary court judge and the second a representative from the Dubai Land Department.

Complaints

The decree prevents the Public Prosecution and courts from carrying out any investigation into bounced property cheques or issuing any ruling in this regard until the case is looked into by the committee.

These bodies should also stop investigating any complaints or cases related to bounced cheques, and must refer them to the committee.

The move, experts say, will help the emirate's real estate sector move forward.

Marwan Bin Galita, CEO of the Real Estate Regulatory Agency (Rera) told Gulf News: "Creating a judicial committee to settle bounced cheque disputes in real estate deals will be useful to the real estate market."

Pointing to Rera's role as an intermediary between buyers and sellers, Bin Galita said: "Most real estate problems and disputes could be solved by bridging the gap between buyers and sellers by offering them logical compromises that satisfy both parties."

New body to resolve disputes

Dubai Government's move to tackle property disputes through a new judicial committee is expected to help the emirate's real estate sector to move forward from the current stagnant situation.

His Highness Shaikh Mohammad Bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, yesterday issued a decree setting up a judicial committee to this effect.

The committee will include a chairman, to be selected by appeal court judges in Dubai Courts, and two members. The first is a Dubai Primary Court judge and the second is a representative from the Dubai Land Department.

Marwan Bin Galita, chief executive officer of the Real Estate Regulatory Agency (Rera) told Gulf News: "This is very good and useful for the real estate market. Most of real estate's problems and disputes could be solved by bridging the gap between the buyers and sellers [and] offering them logical compromise that satisfies both parties.

"Moreover, the judicial committee will be very helpful in protecting the rights of the two parties if they are abide to the law."

The decree states that the committee will be granted the required powers necessary for it discharge its duties properly.

The committee's jurisdiction includes cancelling a bounced cheque issued to a developer, if it has been proved that the developer has no right to the amount, and obliging the issuer of the cheque to write another one to replace the disputed cheque.

Ahmad Saif, Chief Justice of the Dubai Criminal Court of First Instance, told Gulf News: "The ultimate aim of the judicial committee is to spread justice and protect the rights of the buyers and sellers in the real estate business.

"The role of this committee would be very important to review whether [the issue of] this bounced cheque will end up [with] its issuer in jail or not."

With the global economic downturn negatively affecting the real estate sector in Dubai, a lot of projects have been cancelled or shelved at a time when developers are asking buyers to pay their instalments on time for the properties they bought, despite the fact that such properties may not be ready, and in certain instances, are still on the drawing board.

"In such cases, when the buyers fail to honour the cheque and if the developers submitted the bounced cheques to [the] police, the case [will] be transferred to court and the cheque issuers might be charged for [issuing a bounced cheque] and... end up into prison," he said.

According to the decree, law enforcement authorities, including Dubai Police, should refer all cheque complaints to the committee.

The decree also prohibits the general prosecution and courts from investigating cases involving bounced cheques or giving any judgment before the case is looked into by the committee.

Protecting rights

Saif added: "This judicial committee will secure [the rights of] these people and protect the right of the developers at the same time as the committee will look [into] the case before transferring it to the court."

Natasha Gangaramani, Al Fara'a Properties director, told Gulf News: "As the market dynamics have [changed], there is a great need for such a committee."

Dubai is following the international standard of solving disputes involving bounced cheque, she said.

"Finding a middle party to [deal] in fairness and solve [disputes involving] bounced cheques... in the real estate business is [helping] maintaining transparency and regain confidence in the market."

Members and duties

  • The judicial committee will manage cases involving bounced cheque in the real estate sector through consultation.
  • The committee will include a chairman and two members. The first is a Dubai Primary Court judge, and the second is a representative from the Dubai Land Department.
  • Law enforcement authorities, including Dubai Police, should refer all cheque complaints under to the committee.