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Failed to pay the installment??? What will happen?

Discussion in 'Dubai property' started by HaiderAli, Apr 18, 2008.

  1. HaiderAli

    HaiderAli New Member

    What will happen if one can't pay the installment on a booked (under-construction) project in Dubai.. Say, 4th installment.. What will happen then.. Does the unit will go on re-sale and the invested amount will be given to the owner or the owner will not receive anything...???
     
  2. mpat

    mpat New Member

    Generally all these details are mentioned in the contract and it varies from developer to developer.What u agreed in the contract is governing here.So better u check up with the dev before putting anything up.
     
  3. alexft

    alexft New Member

    Ali,

    Many developers can withhold money paid by you as damages and will sell to next buyer.

    As Mpat said you need to check contract. Most UAE developers now discourage flipping via terms of the contract. You still can make short term profit but only if you a) can get your hand on very good property and b) have someone to sell that property for you later on.


    Regards,

    Alex.
     
  4. jags

    jags New Member

    hi

    usually we get contract only once 30% is paid.while purchasing any propertie there is hardly anything to look at except sale purchase agreement.this is always one sided. contracts also seldom have anything in buyer's favour. so you mean if you paid 40% n for some reason can not continue to pay you lose all? thats not fair.
     
  5. alexft

    alexft New Member

    Hi Jags,

    Yes. However UAE is a good market comparing to the likes of Spain for example. In Spain people were sold properties without proper planning permission, etc.

    As to contracts it depends on developer. Due diligience what else can I say :)


    Regards,


    Alex.
     
  6. HaiderAli

    HaiderAli New Member

    Hello all,

    Thank you all for your replies.. So, the conclusion is that the developer will eat your money and consider it as damages and sell the property to someone else? Anyways, how much time will the developer waits, normally, after the installment due date before taking any serious steps?

    And mpat, everyone is asking for the money upfront without any contract or anything - So, how can one check the contract?
     
  7. mpat

    mpat New Member

    If you demand , they will send you DRAFT contract.which mentions everything. I did the same and I adviced the same to some of my friends and eventually they got draft contract for study before they paid anything upfront.One of the developer he mentioned that 30% of the amount will be deducted towards the damage to the developer in order for you to not been able to pay in time.

    Generally developers wait for 2-3 months after the time of installements passed , before they take any action.
    One more thing , just to point it out to you. In my contract it was mentioned that they will charge interest on the late payment of installements , so I rang up them and ask if they keep this term in the contract, I will not buy since I dont want to involve myself in teh interest game, so they said this is just a clause and we never charged interest to anyone and for around 2 months we dont mind u delaying the payments. and after that My payments are generally delayed by 2 months and more also.

    That is the reason I adviced you to talk directly to teh developer, you can get more and more favor from teh developer than what an agent can get for you.
     
  8. alexft

    alexft New Member

    Dear Mpat,

    You must of dealt with second class agents in the past :D

    And yes you right most developers will supply draft copy of the contract, so is the brokers if you ask them.



    Regards,

    Alex.
     
  9. fws

    fws New Member

    If you really are unable to pay the next installment, then you need to be talking to an agent quickly and get the property sold in the resale market. Then you would get all your money back and not have to keep worrying if you are going to lose the property.
     
  10. HaiderAli

    HaiderAli New Member

    Thanks a lot for your reply.. Anyways, how to talk directly with the developer if the property is in resale.?? Is it possible or this advice is only for the property directly from the developer.. ? Let me know. Thank you Alex for your reply as well..
     
  11. mpat

    mpat New Member


    Hi Alexft

    May be u r right, but I enquired with good agents like GOWEALTHY,BETTERHOMES,SIMSARI,SAFAHOMES etc. etc. etc. If you know anyone else as a good agent , please refer them to me.What I personally felt that you need to pay 2 % commission to agent just for nothing if you can do the same directly with developer.Developer do have their lawyer , engineer , consultant and you can visit them or e mail them and get details which sometimes an agent cant do.
    Last week an agent told me that he has a studio for re sale but he cant give me the name fo the project, he said its confidential ( incredible ! ! ! , but its true, it happened with me )
    Bye
     
  12. mpat

    mpat New Member



    If its on re sale , its much better. You ask the owner directly or the agent to send you a copy of the contract since they might have received one from the developer,you just say that I dont feel comfortable to pay something without knowing the contract terms and conditions.There are many advocates who specialized in real estate laws can be consulted for help in such issues.
     
  13. alexft

    alexft New Member

    Dear Mpat,

    The type of companies you mentioned. They rely mainly on marketing such fancy brochures, websites and so on. I went to see one of them on the property expo. Consultant was very drank, you could smell alcohol from a mile. Another consultant who came to assist was sober but failed to tell drunk one to go and rest :) And the agent failing to tell you where is resale property located. What a joke. Another `good` agent - It took their sales consultant 20 min to locate development advertised on the computer system.

    Dubai properties are in such high demand that both developers and agents, a lot of them, got carried away. If buying off plan you can in many cases buy with broker at the same price as from developer, no extra expense. Brokers are paid by developers directly in this scenario.

    When it comes to resales yes fee is charged. This fee is paid in exchange for access to a wide selection of properties for sale.

    Developments on my books. You can get project information from me, give me a call when needed, ask for objective advice, buy properties that do offer high returns potential, resell, etc. I can also set up an appointment for clients to visit developer office if needed. Although big developers like Nakheel deal with everybody mainly via the phone.



    Regards,

    Alex.
     
  14. mpat

    mpat New Member


    Hi alex

    Thanks for your input. I agree with you about those agents and felt the similar experiences.But then, Can you please suggest some really GOOD agents?

    Secondly, my personal experience is, if you got thru an agent, the developer wont give any discount on price since they have to give a 5% commission to the agent.If you go direct to the developer,you can obtain discount.This is my personal experience here in Dubai.

    Regards
     
  15. FZA

    FZA New Member

    I have heard that under UAE law, if you miss 1 installment, it still takes 90 days for the developer to take action against you in which time you might still be able to fulfill the payment obligation

    Could anyone clarify that this is correct and tell me what the procedure would be after the 90 days is up (if you could provide a link to the relevant law statutes that would be a big help thanks)
     
  16. Phepaulmy

    Phepaulmy New Member

    Interest charge on late payment??

    Is it legal / proper for developer to charge interset rate on late instalment payments even though the project is behind schedule? Yes the contract specifies as such :( but it is rather unfair to investors knowing the delivery of the project will be behind the advised schedule?? How bes to make the investor reverse or suspend this clause???:eek:
     
  17. jackcze

    jackcze New Member

    Ethically you are correct that they should not be charging but legally the contract is binding. What do they say, "Buyers beware?"

    The developer contracts are very one-sided in Dubai. Most people just signed them in the rush to buy properties. There is not much you can do other than to negotiate with the developer.

    Generally developers are willing to negotiate because they don't want to lose future stage payments.
     
  18. haider_dubai

    haider_dubai New Member

    I have heard maximum a developer can deduct is 30 %, what is that clause? Any one has a clue......!
     
  19. PropGuy

    PropGuy New Member

    I've a feeling some people will shoot their real estate agents :(
     
  20. haider_dubai

    haider_dubai New Member

    What is the legal standing of reservation form, I have paid 10% for a property and only signed a reservation form, still did not signed any SPA, can I get my money back from the developer. In reservation form it’s mentioned that 10% will be forfeited if further installments are not paid.
     
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