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RERA - Good NEWS for some...

Discussion in 'Dubai property' started by dubai_or_not, Jan 1, 2009.

  1. dubai_or_not

    dubai_or_not New Member

    Rera sets payment rule

    Wednesday, December 31, 2008

    Starting from January 1, 2009, developers and banks have been ordered to stop taking payments more than 20 per cent of the cost of properties from buyers or investors until construction begins, a Real Estate Regulatory Agency (Rera) official has revealed.

    "We have sent out letters to 100 developers – as well as having meetings with them and lending banks and institutions – telling them to take payments from buyers worth only up to 20 per cent of the contract value," Essa Saeed Ahmed Al Mansoori, Head of the Trust Accounts Section at Rera's Real Estate Development Trust Account Department, told Emirates Business.

    "With properties that are already being built, developers who have collected more than 20 per cent of the contract value from buyers will immediately have to stop asking for further payments until they correlate the escrow amounts already collected to construction progress."

    Rera has set up an 11-member Real Estate Development Trust Account Department that will supervise and monitor the construction process and ensure the escrow amounts are collected in accordance with the agreed schedule.

    "We have all the figures in our database and are asking developers to stop collecting money from buyers," said Al Mansoori.

    Rera Chief Executive Marwan bin Ghalita said developers could protect their rights by referring disputes to the Property Court where contractual agreements would be enforced. "The message we want to send out to the developers and lending banks is to consider the situation of the investor before they take action," he said. "In this time of crisis, everyone should work together and everybody's rights will be protected."

    Meanwhile, Rera has announced that a revision of Law No 8 is being considered by Dubai Land Department.

    "For new sales and purchase agreements the booking amount has been set at a fixed amount rather than the previous rate of five to 10 per cent of the contract value," said Al Mansoori . "In January, Rera will set up a technical audit team. The new system will enable stricter auditing of the escrow account, the developer and the trustee."

    He added that Rera was introducing regulatory procedures covering Law No 13, which established the Interim Real Estate Register.

    A land department spokesman said 100,000 units had already been registered.

    http://business24-7.ae/articles/2008...362e9d90d.aspx

    :):confused::)
     
  2. wottodo

    wottodo New Member

    At last some good news!
     
  3. sgaur

    sgaur New Member

    Now, How to approach the developers? Is this information available with RERA on their website? Otherwise, developer can deny such reports.
     
  4. financier888

    financier888 New Member

    RERA IS moving quickly

    I would not underestimate RERA - give them time. This turn of events happened very quickly and caught everyone off guard - more or less.... Regulators do have to be careful and not act too hastily without proper consideration and consensus. The gloabl markets are quite fluid and dynamic and changing daily. Expect to see more positive and constructive developments from RERA - by regulatory standards - they are moving quite fast.
     
  5. memo123

    memo123 Member

    I have heard this news from RERA when I was there 3 weeks ago but no one was willing to give it to me in writing . I believe now it is official . however our developers, at least mine have received from 40-60% payments on all his buildings and have already spent it all on the lands , commissions and marketing . Yet this developer built nothing out of so many promised and all sold out buildings , the question here , how is this developer going to build ? i know for sure no bank is welling to commit to 6 months loan , let alone 1 or 2 years , and that is for AAA name , how about a small developer with no credibility what so ever? will he just declare bankruptcy or take the next flight out of the country .. it is very clear that this developer now is not capable of delivering , even with an average of 55% in received installments . How is RERA going to help here ? also does this law apply to old and new MOUS', I.E. before 14th august and after?

    regards
     
  6. sk302016

    sk302016 New Member

    Does this new rule apply on all launched projects or just projects after August 2008?
     
  7. Datum1m

    Datum1m New Member

    Rera Chief Executive Marwan bin Ghalita said developers could protect their rights by referring disputes to the Property Court where contractual agreements would be enforced. "The message we want to send out to the developers and lending banks is to consider the situation of the investor before they take action," he said. "In this time of crisis, everyone should work together and everybody's rights will be protected."

    Please read the above and note that this is NOT a new law it is just a RERA recommendation, but RERA will not allow Developers to automatically cannel any off plan contracts where 20% as been paid and the Developers have not started work. However Developers can still look to cannel sales contracts by taking defaulting investors to the property court, whether they will risk doing this is another matter, because the judge may rule against them if they have not started the construction work. The main problem for us all now is how they will define, “construction started”, if it is just a few men on site moving sand around, then we will be no better off.
     
  8. financier888

    financier888 New Member

    The courts will rule in favor of protecting the investor, especially in the case where the devleoper has not started the project.
     
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