Panel set up for liquidation of cancelled property projects

His Highness Shaikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE, in his capacity as Ruler of Dubai, issued on Monday Decree No. (21) for the year 2013 — setting up the special legal committee empowered to liquidate cancelled projects and to address all related issues.

The decree sets out the terms of reference of the legal committee. Judgments pronounced by the special judicial committee will be final and unchallengeable. Article 3 of the decree defines duties of the judicial committee, the decisions and rulings of which shall be deemed final and not subject to further appeal and shall be carried out by the Execution Department at the Dubai Courts.

The legal committee has the power to consider and adjudicate in disputes that arise between property developers and investors in the event of cancellation of real estate projects by the Real Estate Regulatory Agency, or Rera, in accordance with the provisions of Law No. (13) of 2008.

The committee is empowered with the implementation of regulations stipulated by the law as well as the settlement of related issues. It has the power to recover liquidation expenses, decide on all operational procedures, address all grievances and problems caused by cancelled real estate projects.

The committee has the power to hire consultants and appoint auditors at the expense of the developer, to inspect the financial position of the project and to verify the amount of money either paid to the developer by the buyers or deposited in an escrow account for the development of that project as well as the amounts that have been spent by the developers.

The legal committee may also take all necessary measures to guarantee the rights of buyers and recover the amounts deposited in the escrow account or paid to the developer.

All courts in Dubai, including the courts of the DIFC, should refrain from considering any request or claim pertaining to cancelled real estate projects after the decree comes into effect as the liquidation of any real estate project will fall within the jurisdiction of the special legal committee.

The decree also stipulates staying execution of any rulings pertaining to liquidation of any development under the committee’s jurisdictions, which were issued before this decree by the Dubai courts, including Dubai International Financial Centre Courts and referring such cases to the committee.

According to a prospectus released on January 17, 2013, by Rera, 187 projects have been completed since the beginning of 2009; 253 projects are on hold; 232 projects are likely to be completed in due course. Although no information was given about cancelled projects, it was reported last year that 217 projects had been cancelled as of May 31, 2011.

Shaikh Mohammed also issued decision No. (9) for the year 2013 restructuring of the board of directors of the Emirates Foundation for Advanced Science and Technology (EIAST). The decree names Hamad Obaid Al Shaikh Al Mansouri as chairman of the EIAST board, Yousef Hamad Ahmed Al Shaibani as deputy chairman, and Mansour Abdullah Mohammed Bastaki, Mohammed Saif Al Meqbali and Mansour Jumma Bu Aseibah as members.

Both decrees shall be effective from the date of issuance and shall be published in the official gazette.

issacjohn@khaleejtimes.com