Dubai developers must disclose project information from January 13

Dubai project developers need to disclose plans

New regulations coming into force in Dubai this month mean that developers will not be able to sell a property without a full disclosure statement.

The new rules, which take effect on January 13, are part of the Dubai strata law, and mean the buyers will need to be given estimates of when a development will be completed, future service charge estimates, and future estimates of utility charges.

The disclosure statement will also have to give details of the materials and finishes used in building the project, a description of the common areas of the property and list the onsite facilities that owners will have to pay for.

There has been some confusion as to whether the disclosure regime applies to complete units held by developers or relates only to incomplete developments where sales are made off plan.

According to Jeremy Scott though, a senior associate in Al Tamimi and Company’s property department, the wording of the relevant direction suggests that disclosures still need to be made by developers where the units are completed if title to the unit has not been issued.

However, Scott warned that this degree of confusion might mean that some developers could be caught off guard when the new regulations come into force.  ‘Most developers have made significant progress towards meeting their obligations under the directions. We anticipate, however, that some developers will not be in a position to comply. In some cases developers may take the view that disclosure statements are not required with respect to completed projects where titles are available,’ he explained.

The disclosure statement is important as without it sales transactions can be cancelled by the buyer as failing to provide the details required is sufficient for the agreement to be declared void. There appears to be no time limit as to when this can happen.

The law is considered crucial to establishing legal guidelines for investors in nearly completed projects on Reem Island and in other areas with freehold property.

Strata law was rolled out in Dubai in May last year. Under the law, registered homeowner associations have the power to recover service fees from owners who default on payments. Homeowners will also not be able to transfer the deeds of their property until any outstanding service fees are settled.

However, there have been fears that homeowner groups could find themselves insolvent as soon as they take over a building, due to previous owners failing to pay their service fees.

2 Responses to “Dubai developers must disclose project information from January 13”

  1. Kiumars Rahmani

    How dose this law help people like me who have invested in a project that was suppose to be delivered in 2009 but has progressed only 2%?


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