Investors against interpretation of law no 13

[PropGuy]

Email: [email protected]

 

[TommyC]

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 ????

Well, this is my understanding, the latest interpretation (for year 2008, whatever that means) issued one week ago does the following: Contracts entered before 31 august 2008 will not be covered by Law 13 at all, any contracts entered after that will be covered but will be based on contract value instead of paid amount = first 30% paid is lost no matter what, of the remaining 70%, another 30% will be lost, or it is at least the developers right to keep that amount. They are still free to refund everything (+100% extra + plus a free car + ..... if they want to...right )

Just a quick edit: I urge everyone that share mine and many others view on the change to law 13 to spread the word, post comments to newspapers, send emails to editors, start new webpages, basically do everything you can to make sure this doesn't go unnoticed in a shiny pressrelease by the Dubai Information Minister.

 

[may21st2008]

I am willing to make aware of this as many people as possible.

Actually the best thing we can do is make end users understand that this is a now or never opportunity for them to buy!! Waiting will not bring them cheaper units as this is he bottom already and in a few months we will look at a lot of the current resale market back to the developers. And is this at their benefit at all? NO! The reason is because I am sure the developers that will resist in the market will launch again the same units for even higher prices because they have no more competition in the secondary market!! The only ones left to resell will be investors who have money for their payments hence not willing to negotiate but only sell at close to what the developers are selling!!

I am sure a lot of you people are willing to sell at their costs and lower - which are prices like 2 years ago maybe - just to save your money then to loose all.

 

[dbxdude]

SOLUTION FOR THIS MESS

Cancel and Postpone far off projects; for example, all things waterfront, mile high towers, trump etc. Now is not the right economic climate for pie in the sky ideas. Issue credit notes for investors who bought in, let them buy in projects less ambitious and closer to completion.

Win - Win, why;

Developers can actually complete the less ambitious projects in our life time, provides more affordable housing, keeps money with developers (who are largely insolvent now – and thus looking to keep your deposits),protects investors and insures they don’t leave the UAE 'en mass', keeps future off plan launches a possibility - no defaults, no fear.

Show the world we have matured.

 

[tkk]

This is such a realistic and practical solution to this big mess........Now how do we get this message across to the developers.
check out this link http://www.ameinfo.com/175263.html

 

[dbxdude]

expanding on a possible solution

This is such a realistic and practical solution to this big mess........Now how do we get this message across to the developers

Well, we wont get are money back - since they don’t have it.
So they will fight us all the way and tie it up for years/generations etc.

So we need to propose a solution

In the current market conditions, investors don’t want to or can no longer make large payments with no end in sight ( ie veneto, 1.4m every 6 months or what ever it is) with no likelihood it will be completed anytime soon and no finance and as such is illiquid.

So we need to campaign on a theme. Dubai and the UAE needs low cost housing. In addition it will help keep the future inflation that’s coming (700m in the US economy mans its coming) from getting out of hand, it also provides emigrants from Europe and US looking for jobs with a chance to make a start and most of all it keeps the momentum of Dubai property moving.

For example:
If i have paid 10% in say trump - im going to walk away, but if that 10% is transferred to 50% of a 2 bed in international city (phase 3 or 4 for example),im likely to make the next payment because i can, or i can get finance. Thus they just converted a investor/speculator into a long term investor/ landlord - which is what they claim they want, right?

We need to speak to developers, newspapers, goverment.

 

[DUBAI INVESTOR]

Well put DBX, couldnt agre more....

 

[TommyC]

Get the word out! I'm sending emails almost by the hundreds to anyone I can come by that could have an influence in this matter.

 

[therealdubai]

Hi everyone.
Is this the right place to protest against a certain developer?

Thanks

 

[TommyC]

Individual developers: NO, New Law 13 interpretation: YES! Join the mailing list! investorslaw13 <at> hotmail.com

 

[Kieran Ryan]

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

Hi Mohammed

I'm also in similar position as are a lot of investors. I bought a villa in the Jumeriah Golf Estates through a broker earlier this year. I was assured finance would be available. The broker confirmed in writing that I would be refunded all monies (AED 3.7 million) if finance wasn't available. 8 months on and no finance the broker and developer have said I will lose all monies.

I guess I will have no alternative to go legal on this but would welcome any suggestions.

Regards

Kieran
0044776 9693776

 

[TommyC]

Hi Mohammed

I'm also in similar position as are a lot of investors. I bought a villa in the Jumeriah Golf Estates through a broker earlier this year. I was assured finance would be available. The broker confirmed in writing that I would be refunded all monies (AED 3.7 million) if finance wasn't available. 8 months on and no finance the broker and developer have said I will lose all monies.

I guess I will have no alternative to go legal on this but would welcome any suggestions.

Regards

Kieran
0044776 9693776

Sign up on the maillist!! Send email to: investorslaw13 @ hotmail . com (remove spaces). We're starting to get more and more people.

In the wake of everything that is going on, I find it absolutely disgusting that developers are using the situation to default investors for their own gain. That it is a practice used as a valid means of business. As in your case, no mortgage avaialable, situation the same for everyone, and they are simply looking to f*** you up, what's the hidden agenda behind this? In terms of IMMORAL ACTIVITIES that seems to be something they don't like in this part of the world, what would you call this?

 

[memo123]

Dear All
how about the developers that started with nothing , Zero capital , from their pockets and depended Solly on investors money to finance their projects and didn't have escrow account in place until investors paid at least 30 % from the capital value . THese people have made a bundel using our money , Just read Rich dad Poor dad book. or how to retire young and rich .
Yet when we go to the developer to see what is the progress , they claim that building in progress, and when we sent a person to see the area , he reported that the developer did was fence sheeting for the land and basically scraped it and cleaned it, I.E. he has done nothing and so far have collected 45-50% from all investors and no building in sight. There is not even pilling in the land , nothing .
So who is protecting us , and does such a developer deserve to take 30% of my hard earned cash for doing nothing?
why cant he just cancel the project and give people back their money . and is the government putting these new laws to protect the sharks or the small fish ?
things are not right ? and don't make any sense
I believe these people that put this law and revised it should have their brains examined .
not only do we have our money sitting for the last 7 months at 0% and no resale , no capital appreciation, no building in site , Then the developer gets 30% of the capital value! how about the people who paid 5% , so they still owe the developer 25%of the total capital value?
this just does not make sense at all . It is a win win situation for the developers . AND most of all who inflated the prices? it was the greedy developers . In cityscape I saw some developers selling at 7000/sq ft , I made a sarcastic comment and asked , are the walls gold plated? and he got so angry like I said something wrong. pure greed.
I say if the projects are up and running and we are in the Th 10 to 13 th floor , then fair enough , the developer is doing something and showing us where the money is being put and hence cant return our money , but if the land is setting there empty , literally empty.
Added to this , The irony is that ,the developer claims that since building is in progress , he will not reschedule future payments nor delay them and when we go to the site , there is nothing , not even a name tag ?
please give me a break Investors are not dump. This law is set purely to protect the developers who are big and have strong connection with the big guys in Dubai .
If they want all foreign money to be pulled out of Dubai , just say the word bluntly and say "we don't want foreign investors , take your money out ".
P.S. I went to the site that one member put petition against this 30% penalty , to sign it and add my utter disgust but couldn't get through can you please re-post it clearly .
regards and sorry for the long letter

 

[Datum1m]

Hi Mohammed

I'm also in similar position as are a lot of investors. I bought a villa in the Jumeriah Golf Estates through a broker earlier this year. I was assured finance would be available. The broker confirmed in writing that I would be refunded all monies (AED 3.7 million) if finance wasn't available. 8 months on and no finance the broker and developer have said I will lose all monies.

I guess I will have no alternative to go legal on this but would welcome any suggestions.

Regards

Kieran
0044776 9693776

Hi Kieran,

I went to see my Solicitor yesterday in Dubai to discuss the situation I am in and go through my very limited options. He did say the best way to tackle a Developer is for buyers of the same development to join forces, to cut down on legal costs. He told me about a group of 20 buyers who had joined forces on JGE, they had been promised 10/90% mortgage by the Developer, but the Developer told them it was not available because the mortgage company had pulled out. However one of the buyers found out the Developer had turned down the mortgages offered by the mortgage company, because he was not happy with their terms. If you can let me have details of which Developer you have bought from I will see if it is the same one and then put you in touch with my Solicitor.

Best Regards

Nigel

 

[tkk]

it is an email address, not a website

It is an email address, not a website

the email is [email protected]

send an email with your name, your cell number ( optional ) amount invested in offplan , and your comments

Dear All
how about the developers that started with nothing , Zero capital , from their pockets and depended Solly on investors money to finance their projects and didn't have escrow account in place until investors paid at least 30 % from the capital value . THese people have made a bundel using our money , Just read Rich dad Poor dad book. or how to retire young and rich .
Yet when we go to the developer to see what is the progress , they claim that building in progress, and when we sent a person to see the area , he reported that the developer did was fence sheeting for the land and basically scraped it and cleaned it, I.E. he has done nothing and so far have collected 45-50% from all investors and no building in sight. There is not even pilling in the land , nothing .
So who is protecting us , and does such a developer deserve to take 30% of my hard earned cash for doing nothing?
why cant he just cancel the project and give people back their money . and is the government putting these new laws to protect the sharks or the small fish ?
things are not right ? and don't make any sense
I believe these people that put this law and revised it should have their brains examined .
not only do we have our money sitting for the last 7 months at 0% and no resale , no capital appreciation, no building in site , Then the developer gets 30% of the capital value! how about the people who paid 5% , so they still owe the developer 25%of the total capital value?
this just does not make sense at all . It is a win win situation for the developers . AND most of all who inflated the prices? it was the greedy developers . In cityscape I saw some developers selling at 7000/sq ft , I made a sarcastic comment and asked , are the walls gold plated? and he got so angry like I said something wrong. pure greed.
I say if the projects are up and running and we are in the Th 10 to 13 th floor , then fair enough , the developer is doing something and showing us where the money is being put and hence cant return our money , but if the land is setting there empty , literally empty.
Added to this , The irony is that ,the developer claims that since building is in progress , he will not reschedule future payments nor delay them and when we go to the site , there is nothing , not even a name tag ?
please give me a break Investors are not dump. This law is set purely to protect the developers who are big and have strong connection with the big guys in Dubai .
If they want all foreign money to be pulled out of Dubai , just say the word bluntly and say "we don't want foreign investors , take your money out ".
P.S. I went to the site that one member put petition against this 30% penalty , to sign it and add my utter disgust but couldn't get through can you please re-post it clearly .
regards and sorry for the long letter

 

[Kieran Ryan]

Hi Kieran,

I went to see my Solicitor yesterday in Dubai to discuss the situation I am in and go through my very limited options. He did say the best way to tackle a Developer is for buyers of the same development to join forces, to cut down on legal costs. He told me about a group of 20 buyers who had joined forces on JGE, they had been promised 10/90% mortgage by the Developer, but the Developer told them it was not available because the mortgage company had pulled out. However one of the buyers found out the Developer had turned down the mortgages offered by the mortgage company, because he was not happy with their terms. If you can let me have details of which Developer you have bought from I will see if it is the same one and then put you in touch with my Solicitor.

Best Regards

Nigel

Hi Nigel

I bought my villa in Sienna Lakes JGE. The developer is Tulip BD. Thanks

Regards

Kieran

 

[Kieran Ryan]

Unfair laws for investors

Sign up on the maillist!! Send email to: investorslaw13 @ hotmail . com (remove spaces). We're starting to get more and more people.

In the wake of everything that is going on, I find it absolutely disgusting that developers are using the situation to default investors for their own gain. That it is a practice used as a valid means of business. As in your case, no mortgage avaialable, situation the same for everyone, and they are simply looking to f*** you up, what's the hidden agenda behind this? In terms of IMMORAL ACTIVITIES that seems to be something they don't like in this part of the world, what would you call this?

Tommy

Thanks for your reply. I dont understand why the government would take such an approach and introduce such unfair laws against investors. The market is at a standstill and this is going to make it even worse. Its good that investors are getting together to see if we something can be done about this and hopefully end with a positive outcome.


Regards

Kieran

 

[TommyC]

Tommy

Thanks for your reply. I dont understand why the government would take such an approach and introduce such unfair laws against investors. The market is at a standstill and this is going to make it even worse. Its good that investors are getting together to see if we something can be done about this and hopefully end with a positive outcome.


Regards

Kieran

I can see the following happening: Developers economy is starting to crunch, the possibilities of cancelletions are increasing, and because of this they are more than happy if more people default instead of finding solutions to secure more financing, they will save more in not having to refund 70% of the paid amount than getting another 5 or 10% or whatever the next installment is, because they can cancel projects earlier before more big expenses are made. So when everything is happening like it is right now, they are simply cutting their expenses and one big expense would be refunding buyers, which is more expensive than have them default and not sign any more contracts for whatever. Disgusting! ANd what does the government do? Nothing! They haven't even mentioned anything about cancellations should be postponed or anything until this is sorted out, I'm one of many that desperatly am looking for mortgage and funds, when all my funds is basically worthless papers locked up in a crashing stockmarket.

 

[therealdubai]

Here's why the gov. was obliged to do so:
1-The gov. itself is the biggest developer so it wont harm itself.
2-The original law was issued for some cases but after the crisis and the no-sales situation most of the investors looked at the 70-30 law as an exit.
3-During this liquidity cruch the gov. wont let more cash to be out of the country.
I am not defending the gov. as myself have a lot of money stucked.

 

[georgihh]

Here's why the gov. was obliged to do so:
1-The gov. itself is the biggest developer so it wont harm itself.
2-The original law was issued for some cases but after the crisis and the no-sales situation most of the investors looked at the 70-30 law as an exit.
3-During this liquidity cruch the gov. wont let more cash to be out of the country.
I am not defending the gov. as myself have a lot of money stucked.

Remember if don’t let the capital move freely in and out this place will be desert in 2 years time
They have no option but to pay the people and start again