In Ajman the Real Estate Regulatory Agency is to introduce new regulations by the end of this month to link payments to construction. This is an issue that has caused problems recently in Abu Dhabi where investors in the Hydra Village flagship development have been angered by demands for payments despite the project being two years behind schedule.
'We have come up with a new formula for collecting payments in relation to the progress of the construction of the project in Ajman,' said Omar Al Barguthi, director general of Arra.
'There will be very specific and clear guidelines for payments to be paid by the developer to the master-developer and the property buyer to the developer,' he added.
Last week Arra set a new deadline of July 1 for property developers in Ajman who have not completed their registration procedures with the agency and warned that it will impose fines or penalties against developers unless there is a valid reason for any further delay.
In Dubai authorities are working on another new set of regulations aimed at increasing confidence in a sector which is experiencing a growing number of disputes between investors and developers because of the credit crunch.
The Government recently published Law 9 of 2009, an amendment that introduced a sliding scale of refunds for buyers who defaulted on their purchase plans for property in off-plan developments.
But bigger changes are in the offing. The Real Estate Regulatory Authority and Dubai Land Department are working on details of how Law 9 and other property laws are to be interpreted and administered.
One problem with the law is that many cases fall outside the situations described in its wording. For example, what happens when a purchaser who has paid 80% on a property then defaults on the remaining amount after completion of the unit. Law 9 says in this case, the buyer loses all their money, which many judge would be unfair.
The authority is looking to clarify this situation whereby the buyer could still receive the unit and owe the developer the remaining 20%.
Clarification is also needed over how RERA will assess a project's viability before making a decision on how to cancel it. Questions are being raised over what happens when RERA cancels a project but there is no money left in the escrow account.
