Questions & Answers
The purchaser paid only 20% of the property price while it is 80% complete
My question is from the developer side.
A developer completed 80% construction certified by RERA Report. A customer paid only 20% of the selling price. We sent DLD Notice to the customer but no answer.
We started the cancellation procedure through DLD, then the customer responded. Actually, the customer purchased 5 units, and all he paid is 20% of selling up to now.
I want to know how much money I can forfeit if the customer is not able to pay by law.
Also please give me the law reference of DLD!
Dear Questioner,
The procedure as per Law No. (19) of 2017 [partially amending Law No. (13) of 2008 on interim property registration], when a purchaser makes a default in the agreed payment, the developer must notify the Dubai Land Department that such a breach has taken place.
Once the notification is received, the Land Department shall give a 30-day notice to the property buyer.
The buyer or purchaser can have negotiations and reach a settlement where the same shall be documented and signed by both parties.
If there is no settlement, the Land Department may issue an official document stating that the developer has fulfilled his legal obligations, specifying the percentage of completion of the property.
Clear guidelines have been issued on the percentage of refund based on the percentage of completion of the project which is as follows:
1. If the percentage of completion on the off-plan project is over 80 percent, the developer can ask the purchaser to abide by the terms of the sale contract and confiscate the paid amount up to a maximum of 40% of the total purchase price of the property.
2. If the percentage of completion is between 80 - 60 percent, the developer may void the sale contract, retain up to 40% of the sale contract’s value and return the remaining within one year of the date of contract cancellation.
3. If the percentage of completion is less than 60%, the developer may void the sale contract and retain up to a maximum of 25% percent of the sale contract’s value and return the remaining within one year of the date of contract cancellation.
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