DUBAI is planning to introduce a new law to help protect investors. It will enable property investors to obtain a full refund if the developer fails to deliver a project on time or fails to provide common facilities.
The new ‘Investor Protection Law’, which could be introduced by the end of next month, will oblige developers to deliver on-time – and provide all the common facilities. If a developer fails to meet these obligations, property investors will be able to cancel their contracts of sale and obtain a full refund.
The law will require that all the common facilities, including such things as swimming pools and gyms, must be ready for use on delivery of a property when the keys are handed over to the purchasers.
A report in the Overseas Property Professional says that “The law has become necessary as increasing numbers of developers have failed to deliver projects on time, and haven’t included the facilities mentioned in the purchase agreements or marketing material.”
“Before the proposal of the new law buyers faced difficulty taking action, and could only hope the facilities would be completed in the near future. Its introduction means developers will be liable for fines if the projects are not delivered on time, or if they don’t meet the agreed specifications.”
Aren’t these very same problems that plague the Cyprus property industry, which fails to protect investors to any great degree? Ignoring the Title Deed fiasco for a moment:
- Developments are frequently delivered months and sometimes years behind schedule – sometimes they are not delivered at all.
- Building work on projects continues long after the first tranche of properties have been delivered to their buyers.
- Properties differ in design, layout and size from those shown in the advertising material.
- The construction of common facilities, including roads, takes place once the rest of the development has been completed.
- How often have we seen marketing material promising golf courses, marinas, theme parks, etc. which may take several years or even decades to complete (if they are built at all).
Congratulations to Dubai; its initiative will undoubtedly help to rebuild investor confidence and increase its attractiveness to overseas property investors.
Isn’t it about time that the Cyprus government did more to protect investors and restore the Island’s tarnished reputation?
Perhaps it could follow Dubai’s example and introduce (and enforce) strict investor protection laws.