Better Homes News
The Evolution of Off-plan – Law 13 and New Financing Strategies
Over the past few months, Law No. 13 of 2008 has been made official and new financing mechanisms have been spearheaded by Emaar. These new developments represent an evolution in the off-plan market and are acutely relevant for those who are owners or prospective owners of off-plan property.
Law 13 governs the purchase of off-plan property and is essentially intended to foster greater security and transparency into the trade of such property. The most important stipulation in Law 13 is that off-plan property must be registered with the Lands Department. Whereas before registration was not required, now any off-plan sale that is not recorded with the Lands Department will be legally invalid.
Further, under this law all developers will be required to report any buyers delinquent in their payments for off-plan property. After such a report is filed, a period of 30 days will be granted in which the buyer can repay the owed amount. Once the 30 day grace period expires, the developer has the option of cancelling the contract and must return 70% of the buyer’s payments. The developer is thus allowed to keep 30% of the money so-far paid and can then put the unit back on the market. It is important to note that the 30% is of the total paid, not the total purchase price of the property (which would likely be a significantly higher amount).
