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.
Nigel re your earlier post I believe you are preaching to the converted.
Like every other “solution” The Cyprus Government has come up with they seem to believe in short term protection for the guilty rather than acknowledging the problem and taking steps, like Dubai, to sort it.
This time their lack of concern and laissez faire attitude will be their downfall and unfortunately they will take us and their citizens with them.
The world has changed in the last few years, even months, and these guys have no clue nor care for the ordinary Cypriot, and even less for everyone else, in my humble opinion.
More concerned about how the elite can continue to avoid a parking fine than anything else.
They just do not get it or could not care less.
I can’t see how this law would help if the developer has gone bust and or disappeared into the sunset.
I don’t read that the respective governments are underwriting this to provide protection for buyers money.
NEVER.
Can’t see that ever happening here as any legality involving returning money never seems popular.
Costas Apacket I fully agree with you regarding the shaming that took place in the EU over the Cyprus government allowing the ‘Title Deed’ fiasco to continue.
I said way back that EU was the place to go, but now the recession has well taken hold the CY government has to delete the ‘But this is Cyprus’ phrase from everyday language.
Cyprus wanted to be in the EU now they are learning the price.
In 2003 when Turkey were sure they’d join the EU all you heard was “When we’re in the EU”. When I pointed to some shop owners that all the counterfeit goods in the markets and shops would have to go they were shocked when they realised that there was a price to pay, Cyprus is now finding how much the price is.
Will Cyprus follow Dubai initiative ?
NO
You need a government that will do the right thing without fear or favour for the benefit of all and not just for themselves, but it is not this present government. They can talk about all the things that should be done, but don’t ask for commitment. Who voted them in anyway!!
@All – this is all about competitive advantage – and the overseas property market is a very competitive market.
If you can do something (positive) that sets you apart from your competitors and it’s something people value, then your business will benefit. This is the case with Dubai.
Cyprus has been playing ‘catch-up’ for far too long – e.g. Spain has golf courses, we must have them too – Dubai is getting a theme park and Spain has them, we must have one too.
It either has no strategy for improving its competitive position in the overseas property market or a very poor one that doesn’t stack up against what the competition has to offer.
I remember from my days in business – Michael Porter’s Book – Competitive Advantage. He categorised ways companies gain competitive advantage into:
Cost Leadership – aimed at a wide audience and low in cost – like Tesco and Primark.
Differentiation – aimed at a wide audience but ‘different’ from your competitors using something that your buyers will value – like Dubai has done with its Investor Protection Law and as ‘Premier Guarantee’ is doing with its 10-year warranty against latent defects.
Focus – aimed at a narrow audience – hi-end brands Rolls Royce and Rolex where price is not an issue and other ‘niche’ market products.
Mike, I agree with what you say, but when you have to resort to shaming to get a Government to do what is patently right, then you surely have reached the bottom of the barrel?
Perhaps! Maybe. Possibly. Sometime. Probably Never! But we should all keep trying to provoke action like this.
They could …. But, they wont …. they are not capable and do not have the huge recourse’s Dubai and its fellow Emirates have. I know I have friends there. Time to move my money to the desert I think?
I hope they do But how will that help any existing owners or developments? they got out of other laws saying they where NOT retrospective …..
Dubai must be congratulated for taking the initiative, they obviously have the wisdom of foresight.
I must respond to Jim’s comment in as much as although title deed on delivery is a worthy goal it is not all that an investor looks to. Having title to a property within what could be seen as a slum is equally as bad as having no title at all so the article, I would suggest, is spot on in that the whole development needs to be completed in accordance with original specifications and proposals.
As a Cypriot however I cannot see the same happening in Cyprus further than collecting the payment for property. The infrastructure, common facilities, landscaping and access will be considered an unnecessary cost burden and of little value to the house. The environment is not something readily valued by third world nations (as you can readily see around you) and as I see it only valued by developed nations because they have already looted their natural environment during the course of their development/industrialisation.
We can however live in hope, the only chance would be to shame Cyprus into enacting similar legislation on the International stage, no other means or argument would have any influence at all I fear.
Yes of course they will and we will all live happily ever after !!!
Certainly does sound familiar but will Cyprus do anything? Yes. They will continue to seek another victim.
Perhaps someone would explain the logic behind the seemingly Government policy of continuing to dig the grave. Do they have a financial stake in a shovel factory?
No.
Of course it’s a super idea, but the difference is they have money, the other Emirates have huge reserves.
Well done Nigel….we can live in hope. In Dubai they have come to this conclusion very quickly. They see the problem and deal with it swiftly. I’m not sure the Cypriot establishment has the same energy.
The only guaranteed delivery that is required, is delivery of a clear title deed on payment of the property.
That is the only thing that will restore confidence in the Cypriot property market & the sooner the government accepts this, the better.