Author: Tajeldin Awad Counsel at NJA
Introduction
Investing in real estate projects can offer substantial returns, but it isn’t without its risks. In unfortunate cases where projects are canceled, investors can find themselves in challenging situations. The UAE government has implemented robust laws and regulations to protect such investors. As an Of Counsel of a leading Dubai-based law firm, I aim to provide a comprehensive overview of the procedures to recover monies from canceled real estate projects in Dubai.
Relevant Regulations
The Real Estate Regulatory Agency (RERA), an arm of the Dubai Land Department (DLD), is pivotal in overseeing real estate projects in Dubai. The legal framework surrounding canceled projects is governed by Law No. 13 of 2008 (as amended by Law No. 9 of 2009), and its relevant directions and resolutions, which provide procedures for liquidating canceled projects and refunding investor funds.
Procedure to Recover Investments
Project Cancellation
RERA can initiate an investigation if a developer fails to fulfill its obligations. If found wanting, RERA has the power to cancel the project officially.
Liquidation Committee
Upon cancellation, a liquidation committee is formed by the DLD to handle the liquidation process. The committee’s role is to manage, liquidate and distribute the funds to the affected investors.
Filing a Claim
As an investor, once you are notified of the project cancellation, it is essential to submit your claim to the liquidation committee. The claim must include all necessary documents, such as the sales contract, receipts of payment, and any other relevant documentation.
Verification
The committee will then verify your claim and determine the amount to be refunded based on the percentage of the project completed.
Refund
Once the committee has completed its evaluation, it will distribute the funds available in the escrow account among verified investors.
Navigating Recovery Procedures
While the procedures are designed to protect investors, they can be intricate. Here are some recommendations:
Legal Assistance
Engaging with a law firm experienced in UAE property laws is crucial. They can assist in preparing and presenting the claim, ensuring all necessary documents are included, and processes are correctly followed.
Timely Action
Promptly act once you receive the cancellation notice. Delays in filing your claim might complicate the recovery process.
Collaboration: Keep in touch with other investors. A coordinated approach can sometimes be more effective when dealing with canceled projects and recovering investments.
In Conclusion
Dubai’s legal framework provides a robust mechanism for investors to recover funds from canceled real estate projects. However, navigating this process can be complex and requires professional legal assistance. Our law firm is well-equipped to support you through this process, ensuring the best possible outcome.
(Disclaimer: This article is provided for informational purposes only and does not constitute legal advice. We recommend that you seek the advice of a legal professional before making any decisions regarding insolvency and bankruptcy.)
