Land development laws have been enacted with the emergence of modern, ever-growing cities, aiming at effective legal intervention to regulate real estate activity and balance the interests of its parties, whether developers, buyers, investors or financing banks. They are not contradictory to the legal principles set forth in other laws.

The Department of Land and Property in Dubai is responsible for overseeing the registration and documentation of all property transactions on behalf of the Dubai government. The right to own property in the Emirate of Dubai under the Real Estate Registration Law is divided into two types. The first type is ownership of UAE and GCC citizens who own the shares of their companies in full, and that of public jointly owned companies, as they can own in common areas. The second type is foreign ownership of areas designated as freehold. Moreover, the Department of Land and Property in Dubai is the only legal entity authorized to register and document all real estate acts. This is performed through an electronic system (electronic record) dedicated to this purpose in accordance with the procedures established by the Department and through certain documents. Dispositions of real estate developers are recorded through the developer self-registration system, while other actions require that the registration process be performed by the owner personally or his/her proxy by official power of attorney, and in the presence of the two parties at the real estate registration centers spread all over the Emirate.

Articles 2, 3, 4, 5, 9 of Law No. 9 of 2004 concerning the establishment of Dubai International Financial Centre “DIFC”, amended by Law No. 7 of 2011, stipulated that the DIFC records should include a real estate register containing all real estate dispositions; such records are regulated in accordance with the law of the center. Articles 16: 20 (of Law No. 4 of 2007) concerning the DIFC Real Property Law, stated the way of real estate registration in the register established by virtue of this law. Article 3 of the same law stipulates that this law applies to property within the jurisdiction of DIFC, to the effect that its provisions, concerning the registration of sales and dispositions of property within the jurisdiction of DIFC, are to be applied accordingly. Thus, the provisions of Law No. 13 of 2008, concerning the interim property registry in the Emirate of Dubai, are not applied to it.

 

By virtue of an authenticated power of attorney, the legal proxy can dispose of the principal’s property within terms of the power of attorney stated therein. The power of attorney should empower the proxy to sell, pledge, donate for two years, and buy for five years as from the date of its authentication by the notary.

Dubai requires interim registration of dispositions of property under construction; namely, registration of real property sale contracts and other legal dispositions off plan before transfer to the real estate registry, including the purchased property, whether off-plan or constructed, which has an interim sale certificate of property registration. The purpose of this registration is to preserve the rights of both owners and investors.

The provisions of Law No. 13 of 2008 concerning regulation of the interim property registry in Dubai, notably the necessity of registering all dispositions of property sold off-plan, stipulate that the developer is entitled only to submit a request to the Department of Land and Property in order to register the disposition of the property sold off-plan at the interim property registry on a form specified for this purpose, filled with the required data and attached to necessary documents in accordance with rules and procedures of the department. Only the department is assigned to register in that registry, though there is no provision in the law requiring completion of this procedure within a certain period of time. Thus, the department is free to complete registration within the time it deems appropriate. The Department also is empowered to deal with registration requests submitted by developers, and it has the authority to control and oversee the property registry to preserve it and keep the rights of all real estate dealers. The disposal of the property sold off-plan is hence invalid as long as it is never registered.

The law requires developers to register completed projects at the Department as soon as they have obtained their Certificate of Completion from competent authorities. Thus, the fully paid property is transferred from the interim registry to the real estate registry, and a certificate of utilization is issued to the investor.

In case that the area of the property is larger than the agreed area in the sale contract: The increase in net area of the unit will not be taken into consideration, unless otherwise is agreed, and the developer cannot claim the value of that increase.

In case that the area of the property is smaller than the agreed area in the sale contract: The developer is to compensate the buyer for the decrease in area of the property if it exceeds (5%) of the net area of the unit.

In case of disagreement between the buyer and the seller, the Department of Land and Property is entitled to resolve the dispute, or a real-estate lawsuit will be filed at court to claim the rights of either the buyer or the seller.

 

The Real Estate Court shall have the jurisdiction on the disputes and conflicts arising from transactions and contracts relating to property rights and any in-rem or affiliated rights, except for leasing relations. This court is comprised of plenary and district circuit. The plenary circuit consists of three judges presided by one of them, and decided on the unvalued cases, cases with value exceeding AED 1000000 (one million dirhams) and counterclaims regardless of their value. On the other hand, district courts consist of one judge who decides on the cases whose value is less than AED 1000000 (one million dirhams) and counterclaims regardless of their value.

The causes of the case range from the buyer’s non-payment of installments due on the property, or the seller’s (the developer’s) non-fulfillment of his obligation to deliver the project or the unit, subject-matter of the sale contract, on the exact time of delivery. The law has given the seller the right, in certain cases, to terminate the sale contract and not to repay the amounts he retained from the buyer, pursuant to Article No. 11 of Law No. 13 of 2008 regulating the “Interim Real Estate Register” in the Emirate of Dubai, as amended by article No. 1 of Law No. 9 of 2009 amended by Law No. 19 of 2017.

Where a purchaser fails to fulfil his contractual obligations under an Off-plan Sale agreement concluded with a Developer, the following rules and procedures will apply:

1. The Developer must notify the DLD of the purchaser’s non-performance of his contractual obligations. 
2. Promptly upon receipt of the notification and verifying that the purchaser is in breach of his contractual obligations, the DLD must:

1. serve a thirty (30) days’ notice on the purchaser requiring him to fulfil his contractual obligations towards the Developer
2. where possible, mediate an amicable settlement between the Developer and purchaser,

3. If the notice period mentioned in sub-paragraph (a)(2)(A) of this Article expires and the purchaser fails to fulfil his contractual obligations or to reach a settlement with the Developer, the DLD will issue an official document in favour of the Developer confirming the following:

1. the Developer’s compliance with the procedures stipulated in paragraph (a) of this Article; and
2. the percentage of completion of the Real Property Unit subject of the Off-plan Sale agreement, calculated in accordance with the relevant standards and rules adopted by RERA.

4. Upon receiving the official document referred to in sub-paragraph (a)(3) of this Article, and based on the percentage of completion, the Developer may take any of the following measures against the purchaser without recourse to courts or arbitration:

1. If Where the percentage of completion of the Real Property Unit exceeds eighty percent (80%), the Developer may:

1. maintain the Off-plan Sale agreement concluded with the purchaser, retain all amounts paid by the purchaser, and claim the balance of the price of the Real Property Unit from the purchaser.
2. request the DLD to sell the Real Property Unit, subject of the Off-plan Sale agreement, by public auction to collect the remaining amounts payable to the Developer; and hold the purchaser liable for the costs arising from the sale; or
3. unilaterally terminate the Off-plan Sale agreement, retain up to forty percent (40%) of the value of the Real Property Unit stipulated in the Off-plan Sale agreement, and refund any amounts in excess of this to the purchaser within one (1) year from the termination of the agreement or within sixty (60) days from the date of resale of the unit to another purchaser, whichever occurs earlier.

2. Where the percentage of completion of the Real Property Unit is between sixty percent (60%) and eighty percent (80%), the Developer may unilaterally terminate the agreement, retain up to forty percent (40%) of the value of the Real Property Unit stipulated in the Off-plan Sale agreement, and refund any amounts in excess of this to the purchaser within one (1) year from the termination of the agreement or within sixty (60) days from the date of resale of the unit to another purchaser, whichever occurs earlier.
3. Where the Developer has commenced work on the Real Property project, having taken hold of the construction site and started construction works in accordance with the designs approved by the Competent Entities, and the percentage of completion of the Real Property Unit is less than sixty percent (60%), the Developer may unilaterally terminate the Off-plan Sale agreement, retain up to twenty-five percent (25%) of the value of the Real Property Unit stipulated in the Off-plan Sale agreement, and refund any amounts in excess of this to the purchaser within one (1) year from the termination of the agreement or within sixty (60) days from the date of resale of the unit to another purchaser, whichever occurs earlier.
4. Where the Developer has not commenced work on the Real Property project for any reason beyond his control, without negligence or omission on his part, he may terminate the Off-plan Sale agreement, retain up to thirty percent (30) of the amounts paid to him by the purchaser, and refund any amounts in excess of this to the purchaser within sixty (60) days from the termination of the agreement.

Article No. 14 of the Executive Council Resolution No. 6 of 2010, approving the Implementing Bylaw of Law No. 13 of 2008, concerning the regulation of Interim Property Registry in the Emirate of Dubai, stipulates that If any dispute arises between the developer and the purchaser, the Department may attempt conciliation to preserve their contractual relationship and may propose solutions for such purpose as it may deem fit. If the Department concludes an amicable settlement, such settlement must be confirmed in writing by an agreement executed by the developer and the purchaser or their respective representatives. Upon confirmation of such agreement by the Department, it will become binding upon both parties.

Article No. 15 of the same resolution, corresponding to Article No. 11 of the Law, has regulated cases when the buyer breaches his obligations, as stated by the Law, and as prescribed in paragraph (D), the developer may resort to the relevant competent court to seek a judgement entitling him to the percentages as prescribed in paragraph (C) of the Article where the amounts retained by the developer are less than the amounts provided for in sub-paragraphs (1), (2), (3) and (4). This means that the role of the Department of Land and Property in Dubai, is case of dispute between the developer and the buyer, is limited to attempts to reconcile and propose appropriate solutions with a view to reaching an amicable settlement between the parties. But this role never extends to include adjudication of the substantive dispute by termination or execution of the contract in accordance with the general rules stipulated in Articles 271, 272 of Civil Transactions Law. Therefore, the decisions of the Department in this concern are merely a proposal or a recommendation which is not binding and not prevent nor hinder any disputing party from submission of their dispute to the competent court, whether by seeking to terminate the contract, enforce it, obtain compensation for it or argue for the compensatory ratio justifications deserved by the developer and stipulated by the Law and the Bylaw set forth in terms of origin or structure.