Hope for Those Dealing with Unfinished and Cancelled Real Estate Projects in Dubai

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Dubai ruler has issued a milestone decree redefining the special committee for unfinished and cancelled real estate projects in Dubai.

Most notably, Decree No. (33) of 2020 changes the name of the special committee to the Special Tribunal for Liquidation of Cancelled Real Property Projects. The Decree prohibits all courts in Dubai to deal with any issues arising from or related to unfinished or cancelled real estate projects as this will now be dealt exclusively by the Special Tribunal, which will be appointed and guided by the Dubai Judicial Council.

The Decree is expected to play a significant role in real estate in the UAE as the Tribunal takes on the following with respect to the liquidation of cancelled real estate projects.

  • The Tribunal will review and settle all disputes which the special committee did not issue final decisions or judgements
  • Determining the rights and obligations of developers in the case of the transfer of a real estate project from one developer to another
  • Liquidating and ensuring settlement of all rights related to projects that are cancelled by the Real Estate Regulatory Agency (RERA)
  • Defining the rights of investors and purchasers of unfinished real estate projects and settle all disputes related to both unfinished and cancelled real estate projects
  • The tribunal will rely on RERAs support in performing its duties and responsibilities as defined by the Decree
  • The Tribunal will form subcommittees, appoint auditors and issue orders to the trustees of the project’s Escrow accounts

Most importantly, all the decisions and judgements issued by the Tribunal will be final and incontestable. The Execution Court at Dubai Courts will execute the Tribunal’s judgements.

In addition to the Decree, HH Sheikh Mohammed also issued amendments to the Interim Real Estate Register in Dubai, remarkably that the developer must refund the entire amount paid by purchaser in cases where the developer did not initiate constructions works due to reasons beyond his control or if the project was cancelled due to a decision issued by RERA.

These changes are positive steps towards effective and efficient dispute resolution in Real Estate in the UAE, strengthening both the developers and purchasers’ positions in the market.

The new Decree annuls any other legislation that contradicts or challenges its articles. The Decree will be published in the Official Gazette and is effective from the date of its publication.