Long-term construction in Dubai
What risks do real estate buyers have in case of a long construction project, and what to do if the project is frozen?
There are two variants of long construction:
– "Freezing" the construction.
– Increasing the deadline for delivery. As a rule, the postponement drags on for several months, in rare cases for several years.
Fortunately, to protect buyers, in Dubai there is a Land Department (DLD), under the control of which are all real estate and all sales transactions.
Once the buyer and the developer have entered into a sale and purchase transaction, it is registered with the DLD, and the deposited funds of the buyer go into a special escrow account and are kept there until the buyer receives the keys. The developer cannot dispose of the funds that are in the escrow account.
According to Law No. 8 on Guarantee Accounts for the Construction of Real Estate Projects in Dubai: If the construction of the project stops for any reason, DLD must provide another developer to complete the construction of the project. If the construction of the project cannot be completed, DLD must ensure that all funds that were in the escrow account are returned to the buyer.
*These guarantees apply only to the off-plan category. There is also a pre-launch category - this category does not offer government protection to the buyer. More details about these two categories in our next articles!