Investors look set to benefit from Dubai Property Court

source Arabian Business

Property investors look set to benefit from the new Dubai Property Court after its first ruling saw a major developer ordered to pay back AED7.4m ($2m) to an investor, it was reported on Sunday.

In its first decision last Monday the court ruled that Mizin, the developer arm of investment company Tatweer, was ordered to pay an investor his money back, plus nine percent interest, because it had failed to register the transaction with the Dubai Land Department, according to UAE daily The National.

The ruling refers to Law 13, which was introduced on Aug. 31 last year, and requires all property transactions to be registered with the Dubai Land Department.

Developers were given 60 days to register existing transactions, in a bid to tighten the legal system surrounding the emirate’s property boom, but Mizin failed to do so.
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This meant the transaction was null and void, wrote Judge Omar Miran, one of the presiding judges in the Property Court, in his ruling.

Lawyers say this first case indicates that the court will take a literal interpretation of real estate laws, which should open the door for more investors to get their money back.

“The result of this is that the clients who were sitting on the fence or who didn’t have faith that the Property Court would provide closure are now taking an entirely different view. They want to file cases,” said Jonathon Davidson, the managing partner of MAC Davidson and Associates in Dubai.

He added that he had hundreds of cases that related to similar issues seen in the Mizin case, which amounted to “non-compliance by developers”.

Steven Henderson, a lawyer in the property group at Clifford Chance said the ruling suggested that “the courts are going to take a hard line on developers”.

“There are a lot of purchasers out there wondering if their developments are going ahead and this gives them another opportunity to look at terminating their contracts,” he told the newspaper.

A spokesman for Mizin declined to comment on the case because the compnay was appealing against the decision.