Dubai: For property owners in Dubai who find their funds are stuck in stalled or delayed projects, there is ready help at hand. GVG Real Estate Development recently confirmed that such investors will be given options to transfer the ownership rights to projects that are complete.
“What we do is enable them (buyers) to receive similar options in terms of property specifications to what they bought - without losing any money,” said Ali Salami, CEO of GVG. “Yes, we are working on ready-to-handover projects to offer as alternative for stalled projects, which we are willing to deliver consecutively by the last quarter of this year.”
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Other developer-investors too are coming up with such plans, where they take over stalled projects and, at the same time, ensure buyers' interests and funds are safeguarded.
The local property market is still trying to find its way out of the crisis sparked by the COVID-19, with developers confirming that their buying activity is still 50-60 per cent lower than what it was before the pandemic. That’s not the only worry.
Short of funds
Property owners will be watching closely whether projects launched in recent years - and where they picked up homes – are on track with the construction. The real estate authorities too are closely monitoring this space. But some small to mid-sized developers are finding their cash situation is getting precarious. A delay or the complete stalling of that project will be the obvious outcome – and leave thousands of property owners with no clue about what will happen to their funds.
This is what GVG – and some other developer-investors – are trying to offset. “The pandemic was the direct reason for the blocking of projects through the first two quarters of 2020,” said Salami. “Some projects have freshly restarted, but others are still stalled until their financial situation is rebalanced.
“There is no doubt there are stalled projects and - that is completely normal in a large real estate market. Between 2014-17, the fickleness of the oil market affected UAE real estate, which recorded a decline in handovers by over 42 per cent compared to previous years.”
What buyers should do
Dubai’s real estate regulations allow for such a transfer from a stalled project, which should go some way towards easing investor concerns.
“Some problems are bound to arise - and solutions always exist,” the CEO added. “RERA (Real Estate Regulatory Agency) has notified all previous property buyers of the necessity to register their purchase contracts. [This] helps limit the size of losses and facilitate the process of solving problems for customers.
“Law 13 provides that sales or transfers will be void if not recorded on the register in the Land Department. In fact, the aim of Law 13 is to give purchasers reassurance that their interests have been recorded at the Land Department. And, assuming all obligations under the contract are respected, the title to the property purchased would be transferred to them upon completion.
“There is no randomness in choosing alternatives for the property buyers. We study each project separately and find suitable alternatives for each buyer in terms of location, price, payment method, ease of procedures, and others.”
Affected developers also get a hand
Once the property owners in stalled projects are given their options, GVG and its partners turn their attention to getting these projects back on track.
“Any stalled project must be completed - or at least all problems related to it must be resolved - regardless of how long it was suspended,” said Salami. “Our main role in this matter is to contribute by taking [over] the lead on the stalled project, help customers to absorb or minimize their loss by proposing alternative projects and negotiate a settlement.
“When reviving any stalled project, we reap benefits from that - the first of which is to save time. As all the licensing procedures and required approvals are there, and some construction has also taken place.
“And let’s not forget that the buyers did not lose their funds. They will pump more money to complete the remaining payments and receive their property.”
The legal part
The CEO insists that the legal process to get all this done “may or may not take long to close and start reviving the stalled project.” That would depend on the type of legal issues confronting the project, the amounts already pumped in and the claims. These are all part of the risks we analyze before taking the appropriate decision regarding stalled projects.
"The volume of funds pumped by our partners and investors is enough to avoid any project block and to guarantee customer satisfaction, which is what counts most."