Sher Value:Finally a voice for the buyers.

Dubai’s Law no 8, issued in October of last year, but promulgated only last week by its publication into the Official Gazette, brings to the forefront a major development that favor the purchasers of homes. This is a change for a large number of the developers who have been selling off plan units but not linking the payments to the construction schedule. The result of not linking the payments to the construction process has meant that some developers have larger sums of money than the comparative work on the construction itself. For this class of developers the new law will change the way they have been operating.

For those developers who had been linking the payments from the end buyers to the progress of construction the adjustment to the new law will not be an issue. While a few procedural steps have been introduced in the new law, one of he procedures are onerous. Interestingly contractors will like the new law as it will ensure that within seven days of he approval of their bill they will be paid, reducing the risk of delayed payments.


On the face of it the law makes no exceptions for the large developers like Emaar and others who are partially government owned and have established a good track record. In addition, the law does insist on the release of the final 10% after one year and only when all the buyers have registered their units. This does pose some problems as a large number of end buyers do not register their units and rely on the sale and purchase contract as the basis for further sales. I would suggest to the authorities a few clarifications to the law.


I would suggest that provision be made that if a developer is registered with the Department once he would not require re-registration. I also recommend that developers be rated by the Department indicating the number of buildings or projects they have successfully completed and delivered; thus the buyers will know what a 3 star developer is better then a 1 star developer. I would also recommend that provision for the final ten percent be changed to be on either all the units being registered or one year which ever happens first.

The impact of the new law will emerge in the coming weeks. My suspicion is that the speculators who have been buying plots in the past with the intention to flip them will feel the first pinch of the law. On the whole the long term effect of the law will be positive and bring much needed confidence to the market. It must be clear that the law suggests by inference that should a developer build with his own resources and after completion of the building offer completed units for sale the provision of the new law do not apply.

My verdict: a Good law and was much awaited.