DLD Termination Amended Law 2020

Law No. 19 of 2020

Amending Certain Provisions of Law No. 13 of 2008

Regulating the Interim Real Estate Register in the Emirate of Dubai

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Upon review of law No. 8 of 2007 concerning guarantee accounts of real estate developments in the emirate of Dubai, law No. 13 of 2008 regulating the interim real estate register in the emirate of Dubai and its amendments, law No. 7 of 2013 concerning the Land Department, and law No. 4 of 2019 concerning the Real Estate Regulatory Agency, hereby issue the following law:          

Superseded Article

Article (1)

Article 11 of the above referenced law No. 13 of 2008 shall be superseded by the following stipulation:

Article (11)

1. The following rules and procedure shall be complied with in the event that a purchaser fails to fulfill its obligations under Off-plan Sale contracts concluded with a real estate developer:
   1. A real estate developer shall notify the Department of a purchaser’s breach of its contractual obligations, in accordance with the Department-drafted form that is intended for this purpose. Such form shall include details of developers, purchasers, specifications of the real estate unit that is the subject matter of the Off-plan Sale contract, a clear statement detailing the contractual obligations violated by purchasers and any other details required by the Department.
   2. The Department shall, promptly upon receipt of the notice and verifying that a breach(es) of contractual obligations by purchasers has taken place, do the following:
      1. Notify purchasers that they shall fulfill their developer-relevant contractual obligations within 30 days of the date of notice. Such notices shall be in writing, stating the date thereof, and served to purchasers by the Department in person, via registered mail or email or using any other method as decided by the Department.
      2. Where possible, finalize amicable settlements between developers and purchasers. Such settlements must be in the form of a contract appendix and signed by purchasers and developers.
   3. In the event that the period mentioned in Article 11.A.2.ii above expires without purchasers having fulfilled the relevant contractual obligations or finalized amicable settlements with developers, the Department shall issue an official document in favor of developers that states the following:
      1. Developers are in compliance with the provisions of Article 11.A
      2. The percentage of completion by developers of the real estate project that is the subject matter of the Off-plan Sale contract, in accordance to RERA-adopted standards and regulations.
   4. Developers may, upon receipt of the official document referenced in Article 11.A.3 above and based on the percentage of completion of relevant real estate projects, take the following actions against purchasers without the need to resort to the judiciary (courts) or arbitration:
      1. Provided that they completed more than (80%) of relevant real estate projects, developers shall have the right to any of the following approaches:
         1. Maintain the Off-plan Sale contract concluded with the purchaser, retain all amounts paid by the purchaser, and claim the balance of the price of the Real Property Unit from the purchaser;
         2. Request the Department to sell the Real Property Unit, subject of the Off-plan Sale contract, by public auction to collect the remaining amounts payable to the Developer; and hold the purchaser liable for the costs arising from such sale; or
         3. Unilaterally terminate the Off-plan Sale contract, retain up to forty percent (40%) of the value of the Real Estate Unit stipulated in the Off-plan Sale contract, and refund any amounts in excess of this to the purchaser within one (1) year from the termination of the contract or within sixty (60) days from the date of resale of the unit to another purchaser, whichever occurs earlier.
      2. Where the percentage of completion of the Real Estate Unit is between sixty percent (60%) and eighty percent (80%), developers may unilaterally terminate the contract, retain up to forty percent (40%) of the value of the Real Estate Unit stipulated in the Off-plan Sale contract, and refund any amounts in excess of this to the purchaser within one (1) year from the termination of the contract or within sixty (60) days from the date of resale of the unit to another purchaser, whichever occurs earlier.
      3. Where developers have commenced work on the Real Estate project, having taken hold of the construction site and started construction works in accordance with the designs approved by the Competent Entities, and the percentage of completion of the Real Estate Unit is less than sixty percent (60%), developers may unilaterally terminate the Off-plan Sale contract, retain up to twenty-five percent (25%) of the value of the Real Estate Unit stipulated in the Off-plan Sale contract, and refund any amounts in excess of this to the purchaser within one (1) year from the termination of the contract or within sixty (60) days from the date of resale of the unit to another purchaser, whichever occurs earlier.
2. Where developers have not commenced work on the Real Estate project for any reason beyond their control, without negligence or omission on their part or in the event that the project is cancelled by a RERA-issued final and justified decision, developers must refund all and any amounts received from purchasers, in accordance to with the procedures and rules stipulated in the above-mentioned Law No. (8) of 2007.
3.  The rules and procedures stipulated in this Article do not apply to land sale contracts which do not involve any Off-plan Sale. Such land sales shall continue to be governed by the terms of the land sale contracts concluded by the parties thereto.
4. The rules and procedures stipulated in this Article shall apply to all Off-plan Sale contracts whether they were concluded prior to or after the commencement of this Law.
5. All procedures, decisions, transactions finalized prior to commencement of this Law shall be valid, enforceable and may not be appealed, challenged or otherwise objected to in any manner whatsoever. This includes terminations of Off-plan Sale contracts finalized from the date of commencement of the above-mentioned Law No. 13 of 2008, provided that they were carried out in accordance to the rules and procedures stipulated by legislations that were valid and applicable at the time. This does not apply to termination decisions rendered null and void by final judgments issued by competent courts prior to the commencement of this Law.
6. The rules and procedures stipulated in this Article are considered part of public order, and failure to comply therewith will result in nullity of the legal act in question.
7. The rules and procedures stipulated in this Article do not preclude purchasers from having recourse to courts or arbitration.

Canceling the Contravening and Contradicting Provisions

Article 2

Any provision, in any other legislation, contravening or contradicting the provisions hereof shall be cancelled.

Publication and Commencement

Article 3

This Law shall be published in the official gazette and shall apply as from the date of publication.

Issued in Dubai on 24 Nov 2020