Posted by Neil King
New government legislation is set to improve the rights of Dubai's real estate investors by allowing them to secure refunds on stalled projects.
Under the newly amended regulations of Law No 13 of 2008, a copy of which was obtained by XPRESS, a sliding scale of refunds will be introduced to guide both developers and investors towards settlements when projects fail to get off the ground, Gulf News reported.
The new law requires developers to notify a project's investors in writing to "abide by his contractual obligations" when problematic issues arise.
Following a 30-day waiting period, during which each investor must meet their contractual obligations, the developer can then "rescind the contract" and return a portion of the investor's monies according to the sliding scale.
In addition, if it is found that the project stalled due to the developer's "failure or negligence", they will not be able to keep any of the original investor funds held in trust and must provide full refunds.
According to the credit ratings agency Moody's, new government restructuring plans for Dubai World, which include an injection of $9.5billion in funds, have buoyed the conglomerate and its subsidiaries.