RERA spares stalled construction projects
As property prices fell last year, the agency was given the authority to cancel developments that do not begin construction within six months of first being approved
The Real Estate Regulatory Agency (RERA) has yet to cancel any construction projects that are showing no sign of being built despite saying last May that it was considering scrapping 27 of them, which would force developers to repay property buyers, reported The National newspaper recently.
As property prices fell last year, the agency was given the authority to cancel developments that do not begin construction within six months of first being approved.
The RERA later launched an online system to keep track of progress on hundreds of projects in the emirate, and began to monitor the financial stability of developers. So far, however, no projects have been officially scrapped, according to RERA chief executive Marwan bin Ghalita: “The only ones that have been cancelled are ones the developers have cancelled themselves because they didn’t want to proceed”.
Of the 1110 construction projects in the emirate, 243 have been cancelled or are indefinitely on hold, according to Proleads, a Dubai-based industry auditing firm. Unless a project is scrapped by RERA, the Dubai Land Department or the developer, the only way investors can get refunds of money invested in stalled projects is through the Dubai Courts. Many investors have avoided this option because of the time and cost involved. Meanwhile, any funds kept in escrow – an account in which developers must by law deposit all investors’ money – must be used to fund construction unless the project is cancelled.
