New Dubai law on unfinished and cancelled real estate projects
His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, has issued Decree No. (33) of 2020 on the special committee for unfinished and cancelled real estate projects in Dubai, formed pursuant to Decree No. (21) of 2013.
According to the decree, the Chairman of the Dubai Judicial Council will appoint the chairman and members of the new Special Tribunal, define the frameworks for its meetings and decision making and judicial processes. The Decree authorises the Tribunal to review and settle all disputes, grievances and complaints for which the previous committee did not issue final decisions or judgements. The Tribunal will also review and settle disputes and complaints arising from unfinished, cancelled or liquidated real estate projects.
The Tribunal is also tasked with the settlement of disputes related to unfinished real estate projects that have been cancelled pursuant to Law No. (13) of 2008 and thereafter referred to the previous Committee by the Real Estate Regulatory Agency (RERA).
If the real estate project is transferred from one developer to another, the Tribunal is authorised to determine the rights and obligations of each developer. If the Real Estate Regulatory Agency (RERA) has cancelled a real estate project, the Tribunal is responsible for liquidating it and ensuring settlement of all rights related to the project. The Tribunal will define the rights of investors and purchasers of unfinished real estate projects and settle all disputes, grievances and complaints related to both unfinished and cancelled real estate projects.
The new Tribunal is authorised to review both normal and urgent matters and issue judgments or amicable settlements. The Chairman of the Tribunal may assign one or more members of the Tribunal to review and issue judgments on such matters. The Chairman of the Tribunal may also form subcommittees, appoint auditors, and issue orders to the trustees of the project’s ESCROW account in all matters related to the liquidation of cancelled real estate projects.
The Decree also details the responsibilities and obligations of the Real Estate Regulatory Agency (RERA) related to supporting the Tribunal in performing its duties and responsibilities. RERA will prepare detailed reports about unfinished projects and provide its recommendations to the Tribunal to help settle disputes or refer the project to another developer.
Following its activation, the Decree prohibits all courts in Dubai, including DIFC Courts, to accept any disputes, appeals or complaints related to unfinished or cancelled real estate projects, or those that fall under the jurisdiction of the Tribunal.
All decisions and judgements issued by the Tribunal are final and incontestable, and the Execution Court at Dubai Courts will execute the Tribunal’s judgments.
The Chairman of the Dubai Judicial Council will issue a resolution naming the entity responsible for providing administrative and technical support to the Tribunal.
This Decree substitutes Decree No. (21) of 2013 on the formation of the special committee for unfinished and cancelled real estate projects in Dubai. 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.
His Highness also issued Law No. (19) of 2020 amending Article (11) of Law No. (13) of 2008 on the Interim Real Estate Register in Dubai.
According to the amendment, if the developer did not initiate construction works in the real estate project due to reasons beyond his control, or if the project was cancelled due to a decision issued by the Real Estate Regulatory Agency (RERA), the developer must refund the entire amount paid by purchasers.
Any other legislation that contradicts or challenges the articles and provisions of Law No (19) of 2020 is considered null. The new Law will be published in the Official Gazette and is effective from the date of its publication.