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UAE: Property contracts to become simple - LRE - 05-25-2009 08:45 PM
By Suzanne Fenton, Staff Reporter
Published: May 24, 2009, 23:46
Dubai: A standard property contract is coming to Dubai's real estate market, aiming to get rid of misleading small print.
A senior official at Dubai Land Department said that having a basic contract would now become the norm and added that it would make it harder for buyers and developers to wriggle out of contracts or to add fine print to existing contracts.
Emmad Eldin Farouq, senior legal advisor at the Dubai Land department, said it would also provide a clear, transparent guide to the rights of both the developer and the buyer.
"The contract is ready and we are waiting for directions," said Farouq said.
These standard contracts are going to be given for all properties.
"The contract will not be changed if it is completed or uncompleted. For any contractual agreement, it must be simple and clear and transparent. There is too much small print in contracts now.
"In any contract, there is a chance a developer can add to it because different developments have different rules and regulations but the basic contract will stay the same," Mohammad Sultan Thani, assistant director-general of the Land department, said.
Lawyers agree that the main points of the contract will remain the same but there will be room for other clauses.
"The standard contract is for finished properties between the buyer and the seller, so the secondary market. But you can't legislate everything, you need an element of freedom in a contract.
"So it will have standard terms in line with market norms and then any changes will go to a separate [section] to make it fair," Michael Lunjevich, partner at Hadef and Partners, said.
While having one basic contract will certainly make life easier for buyers and developers, it will also reduce the number of disputes in the market.
Dubai's Real Estate Regulatory Authority (Rera) and the land department are working hard to make the property sector more water-tight but insist that there must be a large onus on the buyer to read contracts in full.
During Dubai's boom times, many investors came swarming to Dubai just to buy property and paid less attention to contracts than they would in more mature markets.
"Any contract should be very clear and we need to make sure people read the contracts carefully," Thani told Gulf News.
http://www.gulfnews.com/business/Real_Estate_Property/10316668.html