Private developers in UAE can’t keep delaying project launches any longer and here’s why

Dubai: Go ahead and build – Private developers in the UAE are being told not to delay launching projects on plots they had acquired years ago… or face the risk of heavy fines. Real estate authorities do not want to see such developer-investors keep pushing back launch dates until they feel the market situation has improved.

And the authorities certainly don’t want to see these plots end up as speculative assets.

In one northern emirate, one developer has been instructed to come up with a launch plan immediately on a plot that he had bought in 2013. According to the sales and purchase agreement, the project was to be launched in 2015 and completed by 2017-18. The reality is that it is yet to get off the ground.

This is why the real estate authority in that emirate has stepped in now – if the developer keeps delaying, he is liable to fines that could reach up to Dh5,000 a day. “This is the second such instance of a developer being told in recent days to get his act together in that emirate,” said one industry source. “The authorities want private developers to stick to their commitments.

“For the developers concerned, this could mean some difficult days ahead. They may not have the financing to launch projects at this stage – some sort of exit strategy will need to be worked out.” (Gulf News reached out to the concerned developers, but got no official word from them.)

More flexible

Individual emirates have their own approaches to situations where private developers have bought land and signed agreements committing to start building from a particular date.

“But in the last two years, Dubai real estate authorities and master-developers have offered more leeway to developers,” said an industry source. “Delaying or slowing down launches will also help property market stabilize on demand and supply. That’s the main priority in Dubai real estate now.

“But other emirates do not have an oversupply situation to contend with for now. That’s why authorities are insisting developer-investors need to come up with quick decisions on what they plan to do with the plots.”

Start afresh

But this week, Dubai made a significant decision on clearing up delayed or cancelled projects from recent years. A new tribunal has been set up to fast-track decisions and, most important, have the final word on all such issues.

The new Law also makes it clear that no other judicial authority in Dubai, including DIFC Courts, can accept any such disputes or complaints related to unfinished/delayed projects.

“We can expect some speedier decisions being made by the Tribunal on long-pending projects,” said a legal source. “This will reassure investors and, at the same time, allow for a reset to happen on these.

“Some of the projects that were cancelled are sitting on prime plots in Dubai – with legal clarity being offered, new investors or developers can easily come on board to finish them.”

As the lawyer says, some of these have been on-hold for more than 10 years now.

Investors reassured

In setting up the Tribunal, the Decree clearly states: “If the developer did not initiate construction works in the project due to reasons beyond his control – or if the project was cancelled due to a decision issued by the Real Estate Regulatory Agency (RERA) – the developer must refund the entire amount paid by purchasers.”


For investors who have been waiting years for a solution to their stuck funds, this would be the biggest takeaway from the Decree. Clearly, developers will have little wriggle room to delay matters as long as they want. Investors will be the real beneficiaries.

The UAE’s property market is ringing in changes – and the authorities are letting developers know about it loud and clear.

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