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Compensation Claim for Developer’s Delay in Handing Over Real Estate Possession

Many individuals harbor concerns when it comes to real estate investments or under-construction projects, primarily due to worries about unfulfilled promises and delayed property possession. Fortunately, the Dubai Real Estate Regulatory Authority has implemented stringent regulations and policies that have significantly streamlined the process of acquiring your dream property. These regulations have ushered in a new era of standardization within the real estate industry, effectively safeguarding the interests of buyers. If a developer fails to meet the stipulated possession deadlines for your invested property, you have the option to initiate a claim or legal action against them.

Within this article, we will address the various inquiries that buyers often have concerning delays in real estate possession, particularly focusing on the compensation that buyers can seek from real estate builders or developers in the UAE. Let’s delve into the details!

I have entered into a contract to purchase a property from a builder, but the builder was unable to meet the specified delivery date for the apartment. What steps should I take?

Since you have made a payment and invested in a property that was not handed over to you as per the contract’s terms, you can question the developer’s actions. You possess rights in this situation and are entitled to a resolution. In the UAE, you can file complaints with the relevant authorities. In some cases, you may initiate arbitration proceedings. However, it is advisable to first consult with real estate lawyers in the UAE to understand your options and determine the best course of action to protect your interests.

It is strongly recommended not to sign a contract with a developer until it has been legally reviewed, and you have conducted due diligence on the developer’s registration and the project with the assistance of property lawyers in the UAE.

What is RERA and how can it benefit me?

RERA, which stands for the Real Estate Regulatory Authority in Dubai, is a governmental body responsible for overseeing the real estate sector in the country. RERA’s primary objective is to provide protection and assistance to buyers and investors who may encounter unfair practices by developers. The authority establishes clear guidelines and standards for property development and construction to promote transparency within the real estate industry.

What are my rights as a buyer?

By UAE laws, regulations, and the contractual agreement between you and the developer, your rights as a buyer, as well as the corresponding obligations of the developer, include:

1. Timely possession handover.
2. Transfer of title and ownership.
3. Adherence to the agreed-upon progress plan.
4. Compliance with specified construction requirements.

Here are the general provisions of RERA summarized:

1. False Promises by Builders:
If there is any inconsistency between the promises made by the property developer and the actual property delivered, the buyer has the right to claim full compensation for the project along with interest.

2. Structural Defects After Property Delivery:
In the event of structural defects in the construction that become evident within a specified number of years after property delivery, it is the responsibility of the developer to rectify these defects at no cost to the buyer.

3. Delivery Delays:
Should the builder fail to complete the project by the agreed-upon completion date, the buyer can choose to either withdraw from the project and receive a full refund from the developer or continue with the project while being eligible for compensation for the delay in property handover.

4. Title Defects:
Buyers have the right to claim compensation from the builder in cases of title defects. It’s important to note that the concept of title defects is not limited by any time constraints.

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What are the delayed possession penalties?

Under RERA regulations, compensation for delays in property handover by builders is determined. If a construction developer fails to meet the specified handover date in the contract or sale and purchase agreement, property buyers have two options: terminate the contract and seek compensation, or continue construction and claim reimbursement for the delay.

In the event of contract termination, the builder must refund the full amount paid by the buyer for the property, along with accrued interest. If the buyer opts to continue with the project, they can claim interest for the delay period until possession is granted.

It’s important to note that if the property developer does not voluntarily compensate the buyer, the buyer has the right to file a complaint with the Real Estate Regulatory Authority (RERA). RERA will appoint an officer with quasi-judicial powers to conduct an inquiry and issue an order, determining whether the buyer is entitled to interest on the funds spent.

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For property buyers facing such issues, it is advisable to engage a property lawyer in the UAE. At GA Lawyers in Dubai, our team of experienced property lawyers and legal consultants can assist with all real estate matters in Dubai and throughout the UAE. Contact us today!

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