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Investors against interpretation of law no 13

Discussion in 'Dubai property' started by mohammedno11, Nov 14, 2008.

  1. mohammedno11

    mohammedno11 New Member

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    Dear all,

    thanks to the huge respond about the topic. We really need to join and fight for our money.

    Most of us worked hard for the money, maybe it is their lifes savings. To recover from a collateral damage with the upcoming recession will be tough or impossible.

    As the developers joint forces against us, to achieve this interpretation we should join forces to revers it. Just by some phonecalls yesterday 10 people contacted me to initiate a group, only these 10 people own properties worth 200 Mio AED.

    Imagine if we are hundreds !?!

    Most of them are stuck because there is no finance available and the offplan sales and resale is dead (of course there are also some specualtors).

    Most of these investors invested in Dubai Waterfront.

    It makes absolutely no sense to approach the Land Department in small groups, the more we are the better it is.

    And the developers shall not forget that they overheated the market by themselves, caused by greed, lies about construction costs to justify their high prices.

    A lot of developers dont have enough equity for their projects, they depend only on the purchasers funds, and there will be no bridge finance for them as well.

    Developers shall stop fingerpointing to investors, only with their help the market came up and all developers were thankful for the speculation because it helped them to increase their profits.

    Many developers will cancel their projects, thats for sure, because their equity is too low and no one will buy offplan anymore.

    Please dont believe in wonders or that Shk. Mohmd. will fix everything soon. Dubai is bancrupt, look at the debt. He cannot do anything to help us.

    Only Abu Dhabi can, and so far as I know will help to prevent a disaster but only for the governmental developers and institutions.

    I dont want to see the developer walk away with my money in 6 month after forfeiting 40% of my life savings ! And believe me gentlemen there are so many intelligent ways to cheat the escrow account.

    Some developers had to submit an audit of their Escrow Account, this was possible when somebody complaint about the developer in RERA.

    Now they stoped (as per yesterday) to accept complaints. They directly tell you to go to the court. What is now the usage of RERA ?

    As far as I am informed ALL the developers which had to audit their escrow account failed ! Amounts of up to 40 Mio AED of purchaser funds were missing in single cases.

    Who writes in the newspaper about this ?

    RERA told me that only the court can force a developer to audit his escrow account. Does anybody believes after 2 years at the court the funds or the company is still there ?

    I know personally that developer used tricks to get funds from the escrow account, e.g. buying commodities like steel, increasing the contractors price and the downpayment for mobilisation to get a kickback an so on !

    Its so easy guys to get a invoice for the steel, believe me !

    As I think that this is just the top of the iceberg, I am conviced some medium size private developers will misuse the interprettion of law no 13 for their benefit. They will forfeit and after that they will go to Rera with a nice apology to put the project on hold or cancel it.

    HOW TO JOIN:

    I set up an email adress which is:

    investorsagainstinterpretationoflawno13 @ live . com (just make copy and paste)

    Please send me the following informations:

    First and Last Name
    Approx amount of property value in off plan projects
    Mobile Number (if you like)
    And a short bullet point about your opinion about the interpretation


    NEXT STEPS:

    We shall gather, in front of the Land Department. I think it is the right place, it will create public awareness and it is for free.

    We shall hire a lawyer who is not afraid to fight for us or appoint one of us.

    We shall make a petition to the Land Department to achieve that:

    1. All contracts, before and after the law is issued are covered by the law

    2. The developer can only forfeit 30% of the total payments of the purchaser and needs to refund them in case of reselling the units, cancellation or when he puts the project on hold.

    Please forward this email to all other investors you know in Dubai, circulate it through your email and network !

    Lets start all together to make the first step for a change. Remember everybody is a part of the chain and part of the success.

    And dont be silly guys, everybody who can not continue to pay will loose his money.

    Dont listen to the sweet talk of the developers, at the end it is their interest to keep the funds.

    I hope for a good reply and also some suggestions.

    Regards to the forum

    Mohammed
     
  2. djaan

    djaan New Member

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    What about people living outside Dubai?

    with regards
    Djaan
     
  3. TommyC

    TommyC New Member

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    There's nothing stopping them from sending their details, even though they might not be able to join up in front of the Land Department.

    Email sent! Thanks!
     
  4. Datum1m

    Datum1m New Member

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    Hi Mohammed,

    I have a couple of questions for you:

    1)Does your off plan purchase have to be registered with the land department before you can benefit from law 13, which would mean having to find 2% of the purchase price?
    2)If you are already in default of your payments would this stop you from been able to register your investment?, because the developer would without doubt tell the land department about your breach of contract and stop the registration, so you would have to bring the payment schedule up to date, which would mean losing 30% of what you are about to pay, just to try and get 70% back of what you have already paid.

    Best Regards

    Nigel
     
    Last edited: Nov 14, 2008
  5. TommyC

    TommyC New Member

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    All offplan projects should be registered by now, though the exact details might still be up for transfer to the Land Department. The developer had 60 days from the initial implementation by the end of August, but this might of course be abused by unscrupulous developers.

    Mohammed: Need to check this, some problem with the email

    This is an automatically generated Delivery Status Notification. Delivery to the following recipients failed. investorsagainstinterpretationoflawno13 @ live.com (I have on purpose put the spaces before and after the @ to not make it to easy understandable by bots....)
     
  6. mohammedno11

    mohammedno11 New Member

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    1)Does your off plan purchase have to be registered with the land department before you can benefit from law 13, which would mean having to find 2% of the purchase price?

    Answer:

    You will benefit from law no 13, Article 11 only if you have a new contract. New means as the Land Department told me yesterday, a contractual agreement which was signed after the 31. August 2008.

    For all contracts which were signed before that date the provisions of the contract apply.

    MY COMMENT:

    This means a part of the law will be retrospective (e.g. like registering the units) and the part of the law regarding the compensation not. This is relly ridiculous.

    2)If you are already in default of your payments would this stop you from been able to register your investment?, because the developer would without doubt tell the land department about your breach of contract and stop the registration, so you would have to bring the payment schedule up to date, which would mean losing 30% of what you are about to pay, just to try and get 70% back of what you have already paid.

    Answer:

    Asit is only for contracts after 31.08.2008 I dont think anybody is in default right now. Anyway as far as I know is the registration mandatory (there is a grace period for all developers until the end of this year). Btw. you will loose 30% of the property value! only your payments which exceed 30% will be shared 70/30.
     
  7. Datum1m

    Datum1m New Member

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    Sorry, I already know that within Law 13 it is down to the developer and not the purchaser to sort out the registration, but what I am asking is if it is not registered for whatever reason do you still get the benefits of Law 13?

    Regards

    Nigel
     
  8. mohammedno11

    mohammedno11 New Member

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    From my understanding you do have the rights. But I am also sure that some developers will try not to register you name, with the reason that you are in default of payment.

    And than the will try to say that as per article 3, any ancilary rights are void.

    Anyway you can only secure 70% of the exceeding amount of 30% of the property value. If you do not have the funds as many others, than its better to loose 10% than 30%.

    Or join the group and we can fight to get even 70% of your first payment !

    Please use this thread only for the reason of joining the group, there is another thread regarding the explanaiton of the law 13.
     
  9. TommyC

    TommyC New Member

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    Please check that email adress, I copied and pasted and my email was returned saying the adress doesn't exist, check post above!
     
  10. TommyC

    TommyC New Member

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    Grass-root action: Contact Form

    Get the word out, every mail sent will count in the end. More coverage is needed on this!
     
  11. Datum1m

    Datum1m New Member

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    Yes, I will be joining the group, but I feel it is important for everyone to understand how law 13 may benefit them as it is already written. I have seen nothing saying that you loose your first 30% and are only entitled to 70% of any payments made after the 30% is paid, if this was the case it would be worse than some of the contracts I have already entered into. I am meeting my solicitor on Sunday who has been part of the negotiations with RERA regarding the amendments made to law 13, so I will take it up with him, because he has told me already that people will benefit who signed contracts after the law came into force with was July and not the end of August.

    Best Regards

    Nigel
     
  12. poorwoman

    poorwoman New Member

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    i email to the mail id given but it says failure notice and mailbox unavailable
    kindly check this
     
  13. TommyC

    TommyC New Member

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    Got the same problem; Mohammed, check that email-adress!
     
  14. TommyC

    TommyC New Member

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    Answered in the Law 13 thread, but a quick question for you; Wasn't it that exact amendment that changed the entire Law 13? (Now you WILL lose 30% of contract value, applying to all contracts signed from now on. Contracts dated earlier will still be valid in their form and have nothing to do with Law 13 which is only valid now, for NEW contracts)
     
  15. M.Iqbal Aboobakar

    M.Iqbal Aboobakar New Member

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    Land department is protecting developers and saying the investors to go to hell

    Dear All ,

    Yesterday ,I read in 24/7 on page 22 ,about the interpretion of Law 13 ,which I was surprised to read.
    As the Law as stated that the developer can deduct 30% of the Paid Amount as compensation and the rest ,to be returned ,but thanks to the Land Department ,which made it more easier for the developer to eat ,away our hard earned money.

    Yes,that 30% also from the paid up amount can be taken away by the developer ,if he has been timely on his delivery promises.

    I received one of my property in JLT ,after a period of 57 months ,instead of the 24 months initially promised ,with a confirmation that after a delay of 12 months ( 36 MONTHS maximum) ,they will pay me a compensation of 6.5% per year.

    When on delivery ,I asked that the compensated amount should be paid ,they asked me that I am at liberty to file a complaint ,and wait another 3 years to take the delivery of my property ( These are the type of developers ) which are being protected)

    Law No.13 ,interpretation according to the whims and wishes of the developer ,is to try putting a golden spoon in the mouth of these developers.

    Thanking you ,

    Aboobakar












     
  16. Datum1m

    Datum1m New Member

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    I will reply to this in the other post
     
  17. TommyC

    TommyC New Member

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    Yeah, that's the ones that need the protection. Just amazing, just amazing!
     
  18. tkk

    tkk New Member

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    Following is article from Khaleej Times explaining the change or as they say "interpretation" in Law 13 and some comments from readers. Should we start posting our comments in response to this article?


    Dubai Land Dept Tightens Rules for Property Buyers
    Abdul Basit

    13 November 2008
    Print Print Article E-mail Send to A Friend
    DUBAI - Property buyers breaching contracts or defaulting on payments will have to forfeit 30 per cent of the sale price to the developer under new rules announced by the Dubai Land Department on Wednesday.

    The developer may also delay any payment until the property is resold to another buyer, the Land Department said in a statement.

    Developers can also keep 30 per cent of any payment made in excess of the initial 30 per cent instalment.

    The new rules, effective immediately, apply only to new contracts.

    The Land Department move came a day after two of the largest British banks operating in the country, HSBC Holdings and Lloyds TSB Group, announced steps that would curtail lending to individuals in the UAE.

    Several local bank and finance companies have also restricted lending, especially in the real estate market where prices have quadrupled in the last five years, fueling concerns that a sharp fall is imminent in the wake of the global downturn.

    The Land Department said developers could offer a 30-day deadline to buyers in breach or default of a sale contract to meet obligations before cancelling the agreement and refund only 70 per cent of the amount paid.

    The Department said it has established an interpretation for article No. (11) of Law No. (13) for the year 2008 in regards to regulating the Interim Real Estate Register in Dubai.

    “The interpretation of the said article explains the details of implementing the article itself, in order to protect the rights of developers and buyers and maintain the contractual balance in the real estate equation,” said Sultan Butti Bin Mijrin, Director General of the Land Department. Legal experts told the Khaleej Times that the law was needed to clarify damages issues in case of default on property sale agreements.

    Nick Clayson, head of real estate practice at law firm Norton Rose (Middle East) LLP, said: “A principle matter of concern for developers and investors in the current economic climate is that of compensation/damages payable if a property sale defaults.”

    He said the Real Estate Regulatory Authority has also issued an administrative circular indicating that the provisions of all contracts entered into before August 31, 2008 will still be valid.



    Reader's Comments:


    It shall definitely serve as a deterrent for future short term speculators. However, it would also be nice to see certain clarity on regulations for cases where after collecting part or full payments, the developer is trying to cancel projects. How is the investor protected in such cases? Are they also supposed to pay 30% of the contract price as compensation? This would only be fair!!! - Bharat Nankani, Dubai




    This was a good law that had a good advantage in the sense that developers would still retain a certain amount of money while buyers, now unable to get loans due to increased restrictions, will not go bankrupt. This law was definitely a step in the right direction to boost confidence in Dubai by making it safer for investors to put their money into the different projects. -Nick, Dubai


    Is there anyway the buyer is protected too? I have been paying for the last 6 months for an apartment that I booked in Ajman but up to now even the ground levelling work is not done. The company is earning interest on my money but where can we go to address our problem? Can’t authorities stipulate a time; say for example 6 months, that one should start the project after launching it? -Mohamed Ismath, Abu Dhabi


    What about the developers who delay the hand over of possession. What about the authorities who can not provide clearance due to short supply of electrical connections. Why tighten only the buyers. If the buyer gets frustrated what the developers will do to sell the projects. It is natural justice, if there is a penalty clause, it should cover all..- PP Rao, Sharjah

    This law stands fair as far as the developers are concerned. On the other side, there has to be a law to save the interest of the investor to have the property on or before the agreed date. If the developer delays the handing over, then this should also be considered as breach of contract and the investor should be compensated or the payment terms should be rescheduled.- Shib, Dubai



    This law is just to save the developer's backs not the UAE community and I want to ask only one question: the financial crisis affects the developers more that they may not complete there projects is there any penalties if they are late to deliver and complete the projects to the investors 30% also from the contract price or just the law against the investors only? I think if this is a law they have to think about both parties of the contract the developers as they did and the investors who they miss. - Tito, Dubai
     
  19. mohammedno11

    mohammedno11 New Member

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    NEW EMAIL:

    Please try the new email adress, please remove theblank before and after the @ symbol and of course before and after the dot. I cannot post it without the blank because it says that I need to be an active member

    investorslaw13 @ hotmail . com

    If it is working can someone please make a new thread in the forum, and the headline of the thread shall be that email, as I am not a active member I cannot.

    Regards

    Mohammed
     
  20. mercury

    mercury New Member

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    If I understand rith, above mention amendment seem to be bad news

    "Property buyers breaching contracts or defaulting on payments will have to forfeit 30 per cent of the sale price to the developer"

    Because , orignal LAW 13 was talking about forfieting 30% of paid amount to developer instead of 30% of sales price...

    These are two different things.. can anyone explain..


    Secondly, I bought a property from Emaar with 5% payment in June.. I only signed reservation form. I did not sign SPA yet.. If I sign SPA now, does this property will come under LAW13 or outside of LAW13.. Any idea ????
     
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