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Off Plan Projects - The Unrealistic Payment Plan that Regulators Seemingly Do Not Scrutinize
In SPA Payment Plan is not aligned with the forecast Project Plan. Seemingly, no regulating entity scrutinizes the Payment Plan with this objective.
Down the road, the Payment Plan is not revised to align it with the slower project progress. The gap between the amounts due to be paid as a percentage of purchase price versus the construction progress thus goes on increasing in almost all the cases.
Consequently, idle funds get accumulated in Escrow Account. However, if payment of an installment is delayed by the buyer he/she is penalized! Developer benefits from it.
I understand that no regulator keeps watching on the funds being accumulated in the Escrow Account, due to slower progress as compared to the Payment Plan.
I wonder who benefits from the idle fund sitting in the Escrow Account, whether Trustee of the Escrow Account or else. However, the buyer bore the opportunity cost.
 

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My payment plan has payments due on project completion milestones. 20% construction etc. The project is 18 months late (Elie Saab, beachfront), so I guess all the payments are delayed. If you have a payment plan that only stipulates dates and not completion %s, then I guess yes you will just need to pay it. Tying up your money for years is not so cool, especially when a project is delayed for no good reason - for example just because they are slowing down deliveries to reduce supply on the market.
 

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Whether a payment plan is construction progress linked or time linked, there is a handover date, in both cases.
There is a penalty article in SPA in case of delay in handover, in both cases.
Therefore, in the case of the progress-linked payment plan, while the payment is aligned with the construction milestones achieved, the developer does not get any leeway on the handover date.
 

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Whether a payment plan is construction progress linked or time linked, there is a handover date, in both cases.
There is a penalty article in SPA in case of delay in handover, in both cases.
Therefore, in the case of the progress-linked payment plan, while the payment is aligned with the construction milestones achieved, the developer does not get any leeway on the handover date.
Another issue is that developers are using the COVID pandemic as a "force majeure" as per SPA... to justify construction delays and avoid paying any penalties/compensation to customers.
 

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Another issue is that developers are using the COVID pandemic as a "force majeure" as per SPA... to justify construction delays and avoid paying any penalties/compensation to customers.
Covid 19 can be a Force Majeure circumstance. However, the allowed period cannot be the total delay period.
The number of days, wherein the lockdown was in effect that may have impeded the construction progress, can be allowed and not more than that period.
Secondly, the period that the developer is claiming wherein Force Majeure circumstances prevailed, had the developer allowed to delay the payment of installation, consequently?
SPA is structured to favor the developer. On top of that, the developer tries to take advantage to mitigate its risk for invalid excuses.
The buyers of the units in the projects are either ignorant of their rights or remain to be silent when notice excesses by the developers.
 

· Dubai Aye!
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not in good communities
And not all have good views. There must be some demand again as I am receiving calls from agents asking if I will sell as they have interested buyers.

I think it is fair to say people are now sensing the bottom has been reached and may now be behind us.
 

· bling bling
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There's a world surprise real estate boom now believe it or not in this pandemic and I see no reason why Dubai would be an exception.

Price's have fallen n Dubai so why wouldn't investers buy. Dubai is not just a destination, but has great infrastructure, great variety of good projects, safe, and a high yearly amount of good weather.

Investers want hard assets to park their money while inflation is rising.

Bravo Dubai for slowly getting back on your feet again.

I remember during the 2009 financial crisis Dubai still managed to build a lot, and it's growth continues even now.
 

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That exactly reminds me what people were saying in 2010 about Dubai (i.e. it will become desert again). Then, prices doubled from 2011 to 2014, and the city doubled in size and attractions. I'm not here to defend, but taking things personally and aggressively against Dubai during this worldwide crisis, makes no sense.

I'm not here for long conversations, however, I will get back here in 2022-2024. People losing jobs, yeah, but when the job offers opened again, people will come to Dubai to work again. By the end of the day, those people are not going to Mars.

All the best

I posted this 9 months ago, I mentioned that the scenario we have now is similar to what we had in 2010-2014, but some people are always late in realizing the facts.

All the best
 

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Hello

Im scratching my head on this article

Rent freezes are normally brought in when rents are spiraling, there are massive supply shortages and normal people are getting squeezed out of renting normal housing. It couldn’t be the opposite in Dubai now. Hopefully they will see sense

Having said that and despite the doom and gloom that I’ve been eagerly following on this thread, due to a growing family I’ve purchased my second Dubai property. I really think there is a lot more upside than downside from here on in. Their handling of covid, normalization of relations with Israel, new visa and company ownership laws and ongoing expenditure on infrastructure bodes well for the future. It can’t go down forever!
 

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I have a prospective tenant who wants to send me the entire annual rent upfront via bank transfer from the UK. Does this sound dodgy? He's wiling to sign a local Rera rental contract.
I would assume this person probably doesn't have a local bank account set up yet, maybe because he's new to the country and waiting for his Emirates ID? If that's the case, then that will be a problem as he needs the Emirates ID to get an Ejari.

If he does have his Emirates ID, can sign the Ejari and just happens to have a bunch of money in the UK to pay a year up-front, then I'd say that's no issue. Just make sure to get paid in Dirhams, not in GBP, as the Dirham is the only legally accepted tender here (AFAIK).

This is not legal advise though. I'm not a lawyer and you should probably ask one.
 

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Hello

Im scratching my head on this article

Rent freezes are normally brought in when rents are spiraling, there are massive supply shortages and normal people are getting squeezed out of renting normal housing. It couldn’t be the opposite in Dubai now. Hopefully they will see sense

Having said that and despite the doom and gloom that I’ve been eagerly following on this thread, due to a growing family I’ve purchased my second Dubai property. I really think there is a lot more upside than downside from here on in. Their handling of covid, normalization of relations with Israel, new visa and company ownership laws and ongoing expenditure on infrastructure bodes well for the future. It can’t go down forever!

Again it depends on the location. Rents in the Palm, AR, JGE, Dubai Hills have almost doubled in the past 12 months (coming from a very low base however)
 

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I am an investor of a unit at Cayan Cantara.
The project is stopped for long time now.
I am trying to gather information from other investors how to get part of my money back.
Please message me if you have any info in how to get a refund back.
 

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The articles make it sound like Dubai is consolidating. Established areas of the city seem to be the ones enjoying the highest popularity, while there doesn't appear to be much interest for isolated masterplans in entirely new districts.

Dubai has struggled for a while with being a "patchwork" of a city, with no real defined city center. Instead, developers have bought vast swathes of land in attempts to build a downtown for themselves, without a single thought for integration with the rest of the city. It's like everybody wanted to have the center of the city for themselves, where no other developers were allowed, and so tried to build areas to be as attractive as possible but also isolated from everything else.

It looks like the market has decided which areas will be regarded as the "downtowns" of Dubai now, and I doubt we'll see many more attempts to redefine that. Emaar might have wanted to try with Dubai Creek Harbour, but the market didn't favour an attempt to build Downtown Dubai once again. The first one was enough.

Hopefully, some more organic growth will be allowed in the future. It's ridiculous that Business Bay has so many undeveloped lots because Emaar dictates what is built there, and they don't want too much supply in their part of the city. Or that the other part of the street from the world's biggest mall is a largely undeveloped suburb, because those areas belong to a different developer. Or that Dubai Marina is packed with residential towers, while the space right across the highway is an empty industrial area. The patchwork of isolated masterplans creates a very confusing and incoherent cityscape overall.
 

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The articles make it sound like Dubai is consolidating. Established areas of the city seem to be the ones enjoying the highest popularity, while there doesn't appear to be much interest for isolated masterplans in entirely new districts.

Dubai has struggled for a while with being a "patchwork" of a city, with no real defined city center. Instead, developers have bought vast swathes of land in attempts to build a downtown for themselves, without a single thought for integration with the rest of the city. It's like everybody wanted to have the center of the city for themselves, where no other developers were allowed, and so tried to build areas to be as attractive as possible but also isolated from everything else.

It looks like the market has decided which areas will be regarded as the "downtowns" of Dubai now, and I doubt we'll see many more attempts to redefine that. Emaar might have wanted to try with Dubai Creek Harbour, but the market didn't favour an attempt to build Downtown Dubai once again. The first one was enough.

Hopefully, some more organic growth will be allowed in the future. It's ridiculous that Business Bay has so many undeveloped lots because Emaar dictates what is built there, and they don't want too much supply in their part of the city. Or that the other part of the street from the world's biggest mall is a largely undeveloped suburb, because those areas belong to a different developer. Or that Dubai Marina is packed with residential towers, while the space right across the highway is an empty industrial area. The patchwork of isolated masterplans creates a very confusing and incoherent cityscape overall.

Yea its a strange one though because some newer communities are doing very well.... so whilst dubai creek harbour hasn't taken off, Dubai Harbour (or Emaar Beachfront) has exploded. You can resell beach vista/ sunrise bay units at decent premiums right now. Likewise Dubai Hills is probably one of the most popular communities in dubai right now. Nshama town square also very popular as is District One. I guess the problem with Creek harbour is that most of the marketing was focused on the creek tower which doesn't seem to be happening any time soon.
 
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