I am planning to buy an off plan studio apartment in My Tower, Dubai Marina. What factors should I consider when buying an off plan property?
The first thing is to do your research about who the developer is and what history they have on delivering properties to handover. Since the first property downturn, developers now have to actually buy the land they will build on and all the monies they receive from property sales all go into an Escrow account. This account can only be used as approved by Rera as stage building milestones are reached. All in all, buying off plan is more secure now than before 2008 but buyers should still be careful.
If you need finance, then a lot of research has to be done because at present only Emaar is regarded as low risk from the banks and, even then, only 50 per cent loan to value (LTV) is granted. That’s not to say that banks will not lend at all to other developers but it might be hard to find one that will.
Payment plans are also a consideration, so look for one that fits your time frame and more importantly your budget.
Nowadays there are more restrictions placed on developers about when it is possible to resell an original off plan purchase. The likes of Nakheel and Emaar will only allow resales once 40 per cent has been paid by the original purchaser; others like Damac place no restrictions whatsoever so depending on whether you are buying to sell on quickly or buying to reach handover will mean you have to choose your developer with thought and consideration.
You say that you are planning on buying a studio in My Tower in the Marina. My research tells me that this project, although stalled, is in fact now going ahead (albeit many years behind schedule). I would urge you to speak with the developer as to when the completion is now scheduled for and ask if a bank is on board helping with finance (if any).
The location of the tower is good, so if it will definitely be completed then, depending on the price, this should still be good investment given the new tram system and the development going on at The Walk etc. Your fees would still be 4 per cent to the land department for the Oqood certificate to register the property and any commission if you are using an agent.
I recently moved to Dubai and rented a house two months ago. I have now received a notarised eviction notice from the landlord saying that I need to vacate the house in 12 months as he wants to use it himself or sell it. I have been told that it is not legal as the tenant is allowed to continue the lease for two years under Rera rules? Can you please confirm if that’s correct and can you let me know what my options are as my intention is to extend my lease for at least one year to avoid relocation related costs? CT, Dubai
Law 33 of 2008, which regulates the relationship between landlord and tenant, does allow for a landlord to request eviction of the tenant at any point if he wishes to sell the property or move in himself or immediate next of kin. This is provided he has sent notification of eviction either via Notary Public or Registered mail, giving 12 months’ notice. The two-year rule is not legal anymore. So, provided your landlord has communicated this notification in one of the above ways then regrettably you will have to vacate the property in 12 months’ time. If he does evict you, he will not be allowed to relet the property for a period of two years from the date of your eviction, if the reason of your eviction is to use the property himself or next of kin. For this reason, he must also prove he doesn’t own another suitable alternative property. If he is selling the property, you are entitled to see sight of the memorandum of understanding (MOU) to prove that the property has actually been sold. If the property does not sell during the 12-month period, the law is silent as to whether you can stay on in the property but the legal consensus of opinion would be that you could actually remain within the property until such time that it has actually sold.
Mario Volpi is the managing director of Prestige Real Estate in Dubai (prestigedubai.com). He has 30 years of property industry experience in the emirate and London. Send any questions to mario@prestigedubai.com
The advice provided in our columns does not constitute legal advice and is provided for information only. Readers are encouraged to seek appropriate independent legal advice
Follow The National's Business section on Twitter
