+97142555496      WhatsApp

Dispute Resolution for Incomplete Real Estate Projects

Dubai Land Department has introduced various mechanisms to solve disputes related to stalled or incomplete real estate projects. Mentioned below are several dispute mechanisms which work to relief developers and investors who face issues related to incomplete or stalled real estate projects.

Judicial committee for liquidation of abandoned projects

This Judicial Committee for Liquidation is set up for the properties which are specifically cancelled by RERA. Real Estate Regulatory Authority (RERA) has the authority to cancel the projects when the construction has ceased or not commenced.

Judicial Committee for liquidation has exclusive jurisdiction over any dispute related to cancelled projects and no other court or arbitration proceedings are permitted to decide on any stalled projects. Investors have the right to lodge their claims directly to the Judicial Committee For liquidation.

The Judicial Committee for Liquidation will review the stalled projects as per its own timetable. Investors installed projects who were not referred to the Judicial Committee for Liquidation (JCL) may follow up with Real Estate Regulatory Authority (RERA) and check the status of the project’s liquidation.

Real Estate Investment Promotion and Management Center

Dubai land department established the Real Estate Investment Promotion and Management Center. This center is set up to promote international and national real estate investment and develop the real estate investment environment. It also has a component that provides a platform for investors and developers alike to seek the opportunity to refresh incomplete projects of varying degrees. This center has launched different schemes in safeguarding the interest of investors and developers.

Tanmia Scheme

The Tanmia Scheme acts as a mediator for the developer of stalled projects and investors who might be interested in buying or investing in property. The aim of Tanmia Scheme is to redress the grievances of investors and developers who are facing property issues related to stalled projects.

Tanmia Scheme Mandate:

  • Contribute towards the real estate investment wheel in Dubai.
  • Reduce the number of incomplete projects in Dubai.
  • Settle all pending issues and revitalize real estate projects.
  • Raise the attractiveness of investing.
  • Reactivate a developer’s investment portfolio.
  • Offering multiple options through the presence of projects in more than one geographical location.

Developers and investors can each approach the Centre – developers to request enrollment of their project and investors to register their intention to a specific project.

An investor can buy the whole project or alternatively become a joint partner with an existing developer.

The Centre supports investors to obtain information about the project, through the support of the Dubai Land Department (DLD) and the Real Estate Regulatory Authority (RERA).

Dubai Land Department possess the necessary information in respect of a project, will give relief to an investor that he will be able to undertake comprehensive due diligence related to the project.

Tayseer Initiative

This initiative was introduced under the Real Estate Investment Promotion and Management Center (REIPMC). This initiative seeks to provide financial assistance to investors and developers, it also provides financial assistance to incomplete projects, this is the investment arm of the Dubai Land Department.

Resolution Trust Corporation

The Resolution Trust Corporate Facility scheme is set up for fast track revival of stalled projects. Many public and private sector are moving towards Resolution Trust Corporation to solve their issues.

Their main duty is to take over the failing company at a relatively low price and selling the underlying assets so that developers can start their project without facing any liabilities.

This Resolution Trust Corporation (RTC) model provides framework were public and private sector could jointly participate in collaboration for growth of real estate sector.

Remedies claimed

There are certain remedies claimed during the dispute resolution on behalf of both investors and developers for failure to revive incomplete projects.

Reliefs provided for Investors

There are many reliefs provide to an investor for the damages caused for delayed projects:

  • Price deductions
  • Unit upgrades
  • Late payment fee
  • Waivers
  • Family consolidations deferred payment

Reliefs provided for Developers

  • Developers who are unable to complete their project or facing any difficulty to handover the property can transfer their ownership to any third-party developer who is capable to fulfill their obligation toward investors.
  • Developers can request for a gross period for completion of the project.

Due diligence behalf of the investor

  • The main legal issue which an investor needs to consider as part of its due diligence exercise is the existence of third-party rights in respect of a project.
  • An investor will need to consider obligations entered into by the developer with respect to third parties. In this respect, the developer should provide the investor with full disclosure and copy of documents needed, in order for the investor to be aware of any third-party party defaults and the developer’s liability toward third parties which will be assigned.

Key considerations

  • Ensure that owners are properly registered,
  • Land interests have been fully secured and established
  • Enquire whether the land is encumbered by any third-party interests and undertake a full financial due diligence in respect to the credibility of the project.

A Property Dispute in Dubai For Breach of Contract

HHS lawyers are able to assist developers and investors alike through conducting comprehensive legal due diligence and drafting the appropriate legal documentation as may be required between the developer, investor and master developer.

We have an expert team who deal with Dubai Land Department and Real Estate And Regulatory Authority, from our expert experience we can deal with investors and developers, and provide a valuable service by assisting all parties, providing them with the required information regarding a property dispute.

Hassan Humaid Al Suwaidi., LL.B. is a Senior Partner in HHS Lawyers. He has 20 years of experience dealing with high-value and complex cases. Frequently featured in local and international legal directories and commended for his ability to attain favorable outcomes for clients, Hassan has been involved in some of the largest legal settlements. A major part of his work is providing expert legal advice on UAE legislation and acting for individuals and businesses during disputes and litigation.