I purchased two apartments in Business Bay and paid 70 per cent of the value. The developer built nearly 60 per cent and suddenly stopped work in 2010. Their office is closed and there is no one at the project site. I approached the Land Department for information, but they don't even have the company in their records. I tried contacting the company's office in South Korea but there was no reply. I also contacted the South Korean embassy but they don't know about this company either. Can you please help?
Unfortunately, you are not alone in trying to track down a developer that has apparently ‘disappeared' — it seems to be a common problem where construction sites have been abandoned and the developers and agents who once gave enthusiastic assurances are now nowhere to be seen. So, what can you do? All developers must be registered in the Register of Developers held by Dubai's Land Department (LD). Probably this particular developer is registered under a different name, therefore, it would be worth making further enquiries with the LD. It would also be worth checking with the LD whether the developer has complied with the escrow law so that you can find out if any funds are currently being held by the escrow bank.
However, the likelihood is that any such funds would have been utilised for land payments and construction costs to date. You should contact the master developer who should be able to advise in what name the developer purchased the plot. They may also be able to provide further useful information. If you bought through a reputable agent, contact them and see if they can confirm the position too. If you are still not able to contact the developer, you should request a joint meeting with representatives of the LD and the master developer to try to get to the bottom of the matter.
I paid the full amount for a property in Ajman, but it is yet to be completed. The project was scheduled to be completed in 2009, but the developer is now saying I should wait till 2012. I asked for a refund, but they couldn't process it, instead, they suggested that I find a buyer who would purchase the unit from me. How can I get my money back? Alternatively, can I buy a completed property and will the developer pay for it?
To find out whether you have a right to terminate for this delay, I would need to look at the terms and conditions in your Sale and Purchase Agreement (SPA). Most SPAs contain clauses giving the developer a grace period in which to finish construction after the original agreed anticipated completion date. Most SPAs also have very widely drafted force majeure clauses, which allow developers further extensions where delays are caused by reasons ‘beyond their control'. Without examining the SPA or knowing what excuses the developer is giving you for the construction delays, it is difficult for me to say whether or not you have a right to terminate and demand a refund of the monies paid.
If your SPA does contain a clause allowing you to terminate after a certain period of time and if the developer is not claiming force majeure, then you should have the right to terminate. This usually triggers an entitlement to a refund of the amounts you have paid to date, sometimes with interest.
However, having said that, it would seem from what you have said that the developer is not accepting any suggested termination and does not intend to give you a refund. If this is the case and you still wish to terminate the SPA your only alternative would be to approach the courts (if the SPA is subject to the jurisdiction of the Ajman Courts) or to file a claim at arbitration (if your SPA contains an arbitration clause) for confirmation of the termination and a refund. You should be aware that even if you were successful in such a claim, which cannot be guaranteed, you will not in practice be able to enforce your entitlement if the developer does not have sufficient funds to pay you back.
Alternative arrangements of the kind you suggested are an option but in the absence of any reference to such arrangements in the SPA, they would need to be negotiated and accepted by the developer. Also, I would suggest that you seek legal advice before agreeing to any property swap to ensure that none of your rights are lost in the deal.
Jerry Parks is a partner and head of real estate at Taylor Wessing
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