When you buy property off-plan, there is always a risk that the developer does not finish it within the promised time frame.
In fact, even the UAE's largest and most reputable developers regularly hand over their buildings years after schedule.
In the recent past, selected developments by Emaar Properties and DAMAC Properties took up to 8-10 years to complete, and with that were delayed by up to four years.
Investors in those projects still got lucky. Some smaller, lesser-known developers have filed for bankruptcy before some of their real estate developments were ever completed. The supertall residential skyscraper Marina 101 by Sheffield Holdings Limited in Dubai Marina, for instance, reached a completion status of close to 100% before its developer ran out of money. Investors in its apartments are waiting to this day for the finishing touches to be completed and thus cannot move in or rent out their properties. That building was first offered to investors off-plan in 2007.
The good news is that the vast majority of projects eventually do get finished, and most of them even complete within one year of the promised time frame.
UAE law stipulates that as long as a property is finished within 1 year of the advertised completion time, investors do not have the right to any compensation.
If the property is finished more than 1 year after the promised handover date, the developer is required by law to provide compensation to investors. The amount of compensation is usually, but not always, stipulated in the original purchase contract, and can vary widely, as it is up to the developer.
Even then, it is not unusual, especially for smaller developers, to ignore calls for compensation. In those cases, investors rely on the court system to force the developer to pay. Courts tend to look at delays on a case-by-case basis. If the developer is able to provide reasonable evidence that delays are not the result of their own making, e.g., because one of their main contractors went under, the court may allow them to hand over the properties years after schedule without paying investors compensation.
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