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Law No. (12) of 2023 On Regulating Real Estate Development in Emirate of Ras Al Khaimah

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Law No. (12) of 2023 On Regulating Real Estate Development in Emirate of Ras Al Khaimah We, Saud Bin Saqr Bin Mohamed Al Qasimi Ruler of Ras Al Khaimah After perusal of the Constitution; And Federal Law No. (5) of 1985, as amended, on Promulgating UAE Civil Transactions Law, as amended; And Federal Law No. (24) of 1999 on Environment Protection & Development; And Federal Decree-Law No. (32) of 2021, on Commercial Companies; And Federal Decree-Law No. (50) of 2022 on Promulgating Commercial Transactions Law; And Ras Al Khaimah Municipality Law of 1981, as amended; And Law No. (2) of 2007 on Establishing Environment Protection & Development in Ras Al Khaimah, as amended; And Law No. (6) of 2008 on Regulating Real Estate Offices in Emirate of Ras Al Khaimah, as amended; And Law No. (1) of 2009 on Regulating Buildings in Emirate of Ras Al Khaimah; And Law No. (7) of 2012 on Establishing Executive Council of Emirate of Ras Al Khaimah; And Law No. (8) of 2019 on Regulating the Practice of Contracting Profession, as amended; And Law No. (10) of 2019 on Regulating the Practice of Engineering Consultancies Profession, as amended; And Law No. (2) of 2021 on Changing Usage of Plots and Planning Requirements Thereof & Permitted Usage of Buildings; And Law No. (11) of 2021 on Land Register in Emirate of Ras Al Khaimah; And Law No. (12) of 2021 on Regulating Demolition & Removal Works in Emirate of Ras Al Khaimah; And Law No. (2) of 2022 on Remote Real Estate Dispositions in Emirate of Ras Al Khaimah; And Emiri Decree No. (22) of 2008 on Escrow Accounts for Real Estate Development in Emirate of Ras Al Khaimah; And Emiri Decree No. (10) of 2014 on Establishing Real Estate Regulatory Administration; And Emiri Decree No (19) of 2016 on Granting Special Authorization for freehold of properties or to Own any Other Real Estate Rights in Emirate of Ras Al Khaimah; And after approval of the Executive Council; Have promulgated the following Law: Article (1) Definitions In implementing the provisions of this Law, the following words and phrases shall have the meanings corresponding to each of them respectively, unless context otherwise stipulates: State: United Arab Emirates Emirate: Emirate of Ras Al Khaimah Ruler: His Highness Ruler of Ras Al Khaimah Council: Executive Council of the Emirate Competent Authority: The Competent Authority for issuing licenses of practicing the economic activity Department: Department of Ras Al Khaimah Municipality Director General: Director General of the Department Sector: Lands & Properties Sector in the Department Administration: Real Estate Regulatory Administration in the Department Competent Administration: Building Administration in the Department Administration Manager: Manager of Real Estate Regulatory Administration in the Department Real Estate Development: Develop vacant lands, construct infrastructure and common services facilities therein, split them, construct or renovate buildings thereon for residential, commercial, industrial or mixed purposes Main Real Estate Development Project: The one classified as Main Real Estate Development Project according to standards and controls approved by the Administration Sub-Real Estate Development Project: The one classified as Sub- Real Estate Development Project according to standards and controls approved by the Administration Main Developer: The legal person licensed to practice real estate development works for the main real estate project Sub-Developer: The legal person licensed to practice real estate development works for the sub-real estate project Independent Developer: The legal person licensed to practice real estate development works within independent real estate project Escrow Account: Special account in which amounts paid by purchasers of off-plan units in real estate development project or financers thereof or the developer Escrow Account Trustee The bank or financial institution which is approved by the Department to manage the escrow account of the project according to provisions of this law Completion Certificate: A document issued by the Competent Administration after completing all construction works after conforming the same to building permit charts Project Chart: Set of charts, sketches and engineering drawings prepared by the Developer and approved by the Department and Competent Authority Site Chart: The illustrative map prepared by the Developer of the building boundaries within the common property approved by the Department Charts: Include project charts and site chart Master Community System: Terms and conditions which development and operation of the main project, common properties and common facilities therein are subject thereto, including planning and construction standards of the community Common Property: It includes the building, parts and annexes thereof intended for common use, including land on which it is erected as well as the land split into units dedicated for independent title. Article (2) Application Scope Provisions of this law shall apply to entire territory of the emirate including Ras Al Khaimah Economic Zones. Article (3) Real Estate Projects Development Committee A committee named as “Real Estate Projects Development Committee” shall be established in the Department and referred to in this Law as “The Committee”, presided by Director General or his representative and membership of Land & Property Sector Director, Urban Planning & Development Sector Director, Real Estate Regulatory Administration Director, Legal Advisor from the Department, Representative of Ras Al Khaimah Economic Zones Authority and Representative of Tourism Development Authority and The President is entitled to seek assistance of whomever he deems that his presence in the Committee is necessary, from among competent persons, without having counting vote in the deliberations. Article (4) Real Estate Developers Register A- A register to record real estate developers in the emirate shall be created and named as “Real Estate Developers Register” and the Director shall issue resolution determining therein the register form and recording procedures in it, term of recording and renewal thereof. B- It is prohibited for any person to practice real estate development activity in the emirate, unless he is recorded in the register stipulated in paragraph (A) of this article. C- The Developer shall notify Administration of any change made to details and information related thereto that results in amending his details in Real Estate Developers Register, within thirty days from date of making the change. Article (5) Real Estate Development Projects Register A register to record real estate development projects shall be created and named as “Real Estate Development Register” and the Director shall issue resolution determining therein the register form and recording procedures in it, term thereof and its renewal conditions. The Developer may not start implementing infrastructure or construction works of real estate development project or offer a unit therein for sale before recording in this register. Article (6) Committee Competences The Committee shall undertake the following competences: 1- Consider applications of those who want to develop and construct major real estate projects that require special approvals and submit recommendations thereon to the Ruler. 2- Submit recommendations to the Ruler on determining which real estate zone or construct a freehold zone, in which real estate projects or investment buildings may be implemented or constructed therein. 3- Express opinion on real estate development projects in which government or entities owned thereby are party therein. 4- Submit recommendations to the Council on changing the Developer due to delay in implementing the project or existence of any other impediments that inflict damage upon purchasers and impede implementation of the project so the Council shall issue resolution in respect thereof. 5- Issue resolution of renewing, suspending or cancelling the Developer license. 6- Remove the Developer from real estate developers register and re-register the same. 7- Any other tasks assigned thereto by the Council and conform to nature of its work. Article (7) Administration Competences Authority shall have competence to the following: 1- Organize, control and supervise real estate escrow accounts and approve banking and financial institutions qualified to manage these accounts. 2- Ensure that real estate developers meet the conditions of recording them in developers register. 3- Mediation and amicable settlement of any dispute arising from real estate development works. 4- Review and approve Master Community System in real estate projects. 5- Contribute to analysis of real estate market movement and its indicators in the emirate, make future plans to develop and enhance real estate sector and increase contributions thereof in the economic activity of the emirate. 6- Approve rules governing practitioners of real estate development profession, property sale and rental, property brokers and appraisers, as well as real estate activities related to real estate development. 7- Regulate real estate activities, control and supervise practitioners thereof. 8- Issue necessary regulatory policies to train and qualify workers in establishments permitted to work in real estate activities or any other regulations required to accomplish tasks assigned to such establishments. 9- Procedures of recording real estate activities practitioners in the registers prepared for that and issue identification cards for those who work in such activities. 10- Consider and investigate complaints presented against real estate activities practitioners and take appropriate procedures in respect thereof according to provisions of this law. 11- Approve real estate development projects, monitor performance rates therein and issue necessary decisions and recommendations in respect thereof. 12- Approve engineering consultancy contracts for real estate development. 13- Conduct financial audit of real estate projects by itself or whomever it deems appropriate among auditors at the cost of the Developer. 14- Grant permits for off-plan sale. 15- Approve Master Community System and control workflow therein and issue necessary decisions and recommendations in respect thereof. 16- Prepare reports and conduct necessary investigations in respect of stalled projects and present the same to the Committee. 17- Approve contracting contracts between contractor and developer. 18- Any other tasks - conform to nature of its work - assigned thereto by the Department. Article (8) Real Estate Developers License License to practice real estate development activity shall be issued by the Competent Authority, based upon permit from the Administration. This permit shall not exempt the Developer from the necessity to obtain any licenses, permits or other approvals required by the Competent Authority to enable him to carry out his business. Article (9) Real Estate Developers Recording Terms To record real estate developer in real estate developers’ register, the following should be submitted: 1- Copy of valid trade license issued by the competent authority. 2- Memorandum of Association of the company and amendment annexes, if any. 3- Proof of financial leverage according to standards and controls approved by the Administration. 4- Written undertaking to record the real estate project in real estate projects register within one year from recording. 5- Any other terms determined by the Administration. Article (10) Developer Obligations The Developer shall obligate to the following: 1- Implement real estate project according to approved engineering designs and time schedule determined for completion thereof. 2- Implement infrastructure works and services necessary for the project. 3- Inform the purchasers of all details related to the project and real estate units sold to them, including rights and restrictions resulted therefrom and notify them of any changes made to these details. 4- Register the real estate units under the name of the purchaser in the land register designated for this with the Administration and handover all its certificates, deeds and documents to him. 5- Handover the real estate unit to the purchaser including all services that enable him to benefit from it. Article (11) Delete Record From Real Estate Developers Register A- The Committee is entitled to delete record of Developer from real estate developers register in the following cases: 1- Failure to record real estate project in real estate projects register within one year from date of recording it. 2- Submit deletion application by the Developer. 3- Cancel the trade license by the competent authority. 4- Issue final judgment of his bankruptcy. B- The competent authority shall coordinate with the Committee upon proceeding with cancelling the trade license. C- Deletion of the Developer’s record from real estate developers register shall not result in exempting him from whatever liability towards the Department or third party. Article (12) Conflict of Interests 1- Upon carrying on his works, each of Developer, Consultant and Contractor shall commit to disclose to the Department, in writing, whether he has direct or indirect personal interest that contradicts with requirements of his work or any other details requested by the Department. 2- It is not permissible that consultant, contractor or sub-contractor shall be the developer himself or any of them has direct or indirect interest therewith. Article (13) Terms of Recording Real Estate Development Project In order to record real estate development project in real estate development projects register, the following should be presented: 1- Title deed of the plot, or equivalent thereof or approval of title right holders marked in land register or copy of sale contract concluded between the Main Developer and Sub-Developer. 2- All charts approved by the Department. 3- Technical specifications approved by the project consultant. 4- Copy of project building or master community management system. 5- Licenses of the project. 6- Cadastral survey of the project by a survey office approved by the Department. 7- Copy of any agreements concluded between the Developer and any authority related to the development. 8- Detailed program of construction and architectural works, services work related to the project, implementation phases thereof and any modifications made to such works. 9- Economic feasibility study and finance plan for the project. 10- Report from licensed consulting engineer determining the estimated value of the project. 11- Statement of expected financial flow for project completion phases as per the time schedule approved by the Consultant. 12- Any other necessary conditions for recording that shall be determined by resolution issued by the Administration. Article (14) Development Contract Termination The Main Developer shall obtain approval of the Administration to terminate the contract concluded between him and the Sub-Developer. In case of terminating the sale contracts between the Main and Sub-Developer, the Committee may – upon proposal of the Administration – recommend to change the Developer without prejudice to purchasers’ rights. Article (15) Charts Amendment & Contradiction A- Developer, Contractor or Consultant may not make any amendments to the charts or technical specifications of real estate project except after obtaining approval of the Administration. B- In case of existence of any contradiction between details of main and sub-real estate development project charts, the details of main real estate development project shall prevail. Article (16) Prevent Disposal of Real Estate Project Plot The Administration should place “Disposal Prohibition” restriction in land register in respect of the plot to be developed and left this restriction whenever necessary. Article (17) Developer Dedicated Facilities Upon approving project or site chart for the first time and after obtaining approval of Administration and Building Administration in the Department, the Developer may identify areas owned by him in project and site chart that are prepared for private, commercial or investment use, provided that such approval shall be granted and utilize areas owned by the Developer in a way that does not contradict with Master Community System and owners’ rights. Article (18) Cadastral Survey A- Upon selling, the Developer should commit to determine the net sold area and the common area for each real estate unit according to areas approved by the Department. B- By resolution from the Director General, the standards and controls related to cadastral survey of real estate development projects shall be determined and through which net and common areas of the real estate units shall be determined, according to best international standards in this regard. Article (19) Real Estate Project Financing Plan A- Developer should submit financial plan to the Administration, indicating therein sources of financing the real estate development project, considering the following: 1- The contribution of the Developer in finance shall not be less than 20% of the project cost. 2- Construction of the project shall not depend completely on off-plan sale of the real estate units. B- After studying project finance plan, Administration shall take decision of approving the final value of the contributions of financing resources thereof and it shall be entitled, based on project economic feasibility study submitted by the Developer and after verifying his fiscal capacity, to amend contributions rates of such resources. Article (20) Implementation Launch & Completion Rates A- Developer should do the following 1- Start implementing infrastructure or construction works of real estate development project within maximum period of six months from the date of recording the project in real estate development projects register, unless he is granted similar period upon his request and approval of the Administration Director. 2- Provide the Administration with monthly reports prepared by the Contractor and approved by the Consultant that include workflow in the project and completion phases and financial flow thereof, according to the time schedule of it. B- Administration may – under its supervision – assign engineering or accounting office in the State, to prepare engineering or accounting report on the project, according to what it deems appropriate and fees thereof shall be at the expense of the Developer. Article (21) Real Estate Development Project Mortgage A- Developer may mortgage real estate units in real estate development project in order to obtain finance to complete construction thereof, according to the following terms and controls: 1- The completion of the project shall exceed 50% of project construction works. 2- Mortgage shall be made on real estate units registered in the name of the Developer in the project. 3- Deposit entire financing amount in escrow account directly. 4- Stipulate expressly in sale contract of the sold real estate unit that the real estate unit is mortgaged and state the name of the Mortgagee. 5- Record the mortgaged real estate unit in the name of the purchaser in the initial land registers and burdened with mortgage in favor of the Financer. B- Part of the sold real estate unit price, which is deposited in the escrow account, shall be deducted to pay the loan as per percentage of real estate unit share in the finance. C- Mortgage on mortgaged real estate unit shall end in case of full payment of its price by the Purchaser and deposit the same in the escrow account. Article (22) Master Community Management System A- The Main Developer shall prepare Management System of the Master Community in main real estate development project before taking any legal act on the real estate units in the project, provided it shall be approved by the Administration. B- No amendment may be made to Master Community Management System that impairs the rights of purchasers except after obtaining approval of Administration Article (23) Building Management System A- The Sub-Developer shall prepare Building Management System in sub-real estate development projects and approve it from Administration before taking any legal act on the real estate units. B- If part of the sub-real estate development project had been developed on phases, it is required to prepare Building Management System for the part that had been developed. C- No amendment may be made to Building Management System that impairs the rights of real estate units’ owners except after obtaining approval of Administration Article (24) Real Estate Development Project Cancellation A- Real estate development project shall be cancelled and deleted from real estate development projects register in the following cases: 1- Commencement of implementing the project is delayed beyond the period determined in article (20) of this law. 2- Developer submitted request to cancel the project for material reasons accepted by Administration 3- Delete the Developer from real estate developers register unless the project is transferred to another Developer. B- The project shall not be cancelled except after refunding the entire amounts paid by the purchasers and clear the rights of Contractor, Consultant, Escrow Account Trustee and any other rights resulted from the same project C- Cancellation of the project shall not result in exempting the Developer from responsibility, whatever type thereof towards Department or third parties. Article (25) Real Estate Units Off-Plan Sale In case the Sub-Developer purchases from the Main Developer the property subject matter of development in installment, it is required to stipulate expressly in the contract concluded between them the right of the first to off-plan sale. Article (26) Real Estate Units Off-Plan Sale Permit Developer may off-plan sell real estate units in real estate development project after sale permit is issued by Administration. Article (27) Real Estate Units Off-Plan Sale Permit Conditions 1- Real estate development project shall be recorded in real estate development projects register. 2- Open escrow account for the project. 3- Administration approves units’ reservation forms and sale contracts thereof presented by Developer. 4- Any other conditions determined by resolution from Administration. And each sale made after enforcing provisions of this law without obtaining the mentioned permit shall be void. Article (28) Real Estate Units Off-Plan Sale Advertisement A- Developer may not advertise in local or foreign media or participate in local or foreign exhibitions to promote real estate units off-plan sale in real estate development project except after obtaining necessary permit from Administration. B- In case of advertising sale of real estate units in the project, Developer shall state the following information: 1- Project location and number of the plot on which the project is constructed 2- Delivery date of the project which is approved by Administration. 3- Developer number in real estate developers register with Administration. 4- Project number in real estate development projects register. 5- Escrow account number. 6- Any other details determined by resolution from Administration. Article (29) Real Estate Units’ Reservation Deed A- Developer or his representative should issue a deed named “Real Estate Unit Reservation Deed” to real estate unit off-plan reservation applicant that shall contain the following details: 1- Developer name, address, phone number, e-mail, trade license number and his recording number in real estate developers register. 2- Reservation Applicant name, address, phone number, e-mail, ID or passport number, and trade license number if he is legal person. 3- Accurate description of the reserved real estate unit and its area, number and location in the project. 4- Price of the reserved real estate unit and reservation amount. 5- Stipulate the right of reservation applicant to purchase the real estate unit within thirty days from the following day of signing reservation deed. 6- Obligations of Reservation Applicant and Developer in case of reneging on reservation. 7- Name of escrow account trustee, sub-escrow account number for the reserved real estate unit. 8- State the financer of the project and address thereof and finance limit value. B- Details stated in real estate unit reservation deed shall be pretense for Developer and Reservation Applicant and no change thereto shall be considered unless it is made on the form approved by Administration and in all cases, Developer should notify Administration of the changes made to details of reservation deed. Article (30) Real Estate Unit Reservation Effect A- Reservation amount shall be considered part of the sold real estate unit price and Developer should deposit the entire amount in escrow account. B- Developer shall commit to reservation deed concluded with Reservation Applicant and he should conclude real estate unit sale contract within thirty days from the following day of signing reservation deed and he may not sell or offer real estate unit – subject matter of reservation deed - for sale throughout this period. C- If Developer does not hand over sale contract to Reservation Applicant within the period stipulated in clause (B) of this article, Reservation Applicant may request from Administration to compel Developer to complete sale of real estate unit and hand over sale contract or cancel reservation deed and refund the entire reservation amount. D- If Reservation Applicant refuses to sign sale contract or delays to return it to the Developer within fifteen days from date of receiving the same, reservation deed shall be cancelled and Reservation Applicant shall not be entitled to refund reservation amount. E- Reservation Applicant may not dispose of the real estate unit by reservation deed or offer the same for sale or make any right in rem thereon and any of these acts shall not apply to Developer. Article (31) Real Estate Unit Sale Recording in Initial Land Register A- Upon recording real estate development project in initial register, all real estate units shall be marked as “Vacant”. B- All dispositions made on off-plan sold real estate units shall be recorded in the initial land register. Sale and other legal acts transferring or restricting title or any rights derived therefrom shall be void if the same are not recorded in such register. C- Before completion of project, Real estate Developer may record any vacant real estate unit in his name in initial land register, provided he shall commit to deposit price of real estate unit in escrow account and pay registration fees. D- Developer should, within five working days from the date of signing sale contract by the Purchaser, record the sold real estate unit in the name of the Purchaser in the initial land register. E- In case of delay of Developer in recording the sold real estate unit, the Purchaser may request from Administration to register real estate unit in his name after payment of registration fees. Article (32) Units Replacement Developer may not replace off-plan sold real estate unit with other real estate unit, whether these units are in one project or different projects except after approval of Administration on replacement and Developer’s commitment to take necessary procedures to maintain the escrow account and he shall bear all expenses and expenditures necessary for this replacement. Article (33) Disposal of Real Estate Units It is permissible to dispose of off-plan sold real estate units and recorded in initial land register by sale or mortgage and other legal dispositions under approval of two parties of contract. Developer shall be prohibited from receiving any fees in respect of the sale or re-sale and other legal dispositions made on such units with exception of expenses received by Developer from third party and approved by Administration. Article (34) Register Real Estate Unit in Final Land Register Upon issuing real estate development project completion certificate and approve final cadastral survey and units sorting, Developer must do the following: 1- Transfer title of sold real estate units to Purchasers in case they paid full price within maximum period of thirty days and obtain real estate unite title deed. 2- Transfer title of vacant real estate units in the name of Developer and pay registration fees. Article (35) Maintenance Percentage Holding A- Escrow Account Trustee should hold percentage of 5% of total cost of real estate development project for period of one year from date of issuing project completion certificate in order to cover the cost of maintaining the defects that may appear after completion thereof. B- Escrow Account Trustee may not disburse the held amount or any part thereof except after elapsing of the one year period stipulated in clause (A) of this article and Developer presents technical report from engineering office approved by the Department at his own expense, to the effect that all necessary maintenance works had been carried out or there is no need for maintenance. C- Administration may approve Developer request to withdraw the held amount before expiry of the one year period stipulated in clause (A) of this article in consideration of submitting bank guarantee by the Developer in the name of the Department that can be liquidated and equals the amount to be withdrawn. Article (36) Escrow Account Trustees Register A- A register of Escrow Account Trustees named “Escrow Account Trustees Register” shall be created with Administration. B- Escrow Account Trustee shall commit to provide Administration with monthly account statements or whenever Administration requests this which include all financial statements of main and sub-accounts of real estate units, including names of real estate units’ purchasers, updates of such accounts and the remaining balance thereof. Article (37) Escrow Account Trustees Registration Terms In order to be recorded in Escrow Account Trustees Register, the following conditions shall be met: 1- Registration Applicant is a bank or financial institution that is licensed in the State. 2- Registration Applicant shall have main office or branch in the emirate. 3- Registration Applicant shall assign electronic system to manage escrow accounts. 4- Registration Applicant shall have engineering section or conclude contract with engineering office approved in the State. 5- Any other conditions issued by resolution from Administration. Article (38) Open Escrow Account A- Developer, who wants to off-plan sell real estate units, shall commit to open escrow account in the name of real estate development project with one of escrow account trustees registered with Administration. B- In case the Developer is implementing several projects, he should open escrow account for each project separately. C- The escrow account shall consist of main account for the project and sub-account for each real estate unit separately in the same project. Escrow account agreement shall determine procedures and controls of the main escrow account and sub-escrow accounts. D- By no means, escrow accounts of more than project may not be merged with each other or merge main escrow account with sub-escrow accounts. E- Controls and procedures of opening escrow accounts shall be determined by resolutions issued by Administration. F- Administration may create its own escrow account through which it provides account trustee services. Article (39) Escrow Account Agreement A- Escrow account shall be opened in the name of real estate development project under an agreement concluded between Developer and Escrow Account Trustee named as “Escrow Account Agreement” as per the form approved by the Department. B- Escrow Account Agreement shall not be accepted except after approving it by the Department and escrow account shall not be activated except after issuing final approval on recording the project in real estate development projects register. Article (40) Deposit Price in Escrow Account 1- Purchaser shall commit to pay price of real estate unit in the sub-escrow account assigned thereto according to payments plan stipulated in its sale contract. It is not permissible to refrain from paying any payment except in cases and conditions stipulated in Article (48) of this law. 2- Developer is prohibited from receiving any amounts of real estate unit price directly out the escrow account or deducting real estate broker commission from its price. 3- Projects, for which special resolutions had been issued or obtained completion certificate before this law comes into force, shall be excluded. Article (41) Disbursement From Escrow 1- Disbursement from escrow account shall be made after obtaining Administration approval in writing on disbursement deed in order to spend on real estate development construction. Amounts which Administration gives permission to spend them on promotion and marketing of the project shall be excluded provided they shall not exceed 5% of the amounts deposited in the account. 2- It is prohibited to pay the price of the plot allocated to construct the project from the escrow account or price of selling real estate units unless project completion certificate is issued. 3- Escrow Account Trustee may not deliver bounced checks to Developer except after approval of Administration. Article (42) Disburse Profits From Escrow Account Developer may – upon approval of Administration – disburse from escrow account a percentage not exceeding 5% of the expected profits of real estate development project provided that the same shall be divided into three payments during completion period, according to the following conditions: 1- Deposits volume in escrow account reaches amount exceeds remaining construction works cost. 2- Completion rate exceeds 60% of project construction works. Article (43) Suspend Disbursement From Escrow Account Administration may suspend disbursement of any amount from escrow account in case of any circumstance that may result in non-completion of real estate development project. Article (44) Escrow Account Coverage A- In case there are insufficient amounts in escrow account to cover construction works, Administration may issue an order to Developer to deposit amounts in escrow account within defined time schedule to cover the value of real estate development project construction works or settle rights of each of Financer and Contractor. B- In case of non-compliance of Developer, or non-commitment to time schedule of payments stipulated in the previous clause of this article, Administration may consider the project suspended. Article (45) Close Escrow Account Director-General shall issue resolution of closing escrow account after making sure that the following conditions are met: A- Developer obtains completion certificate. B- Register all units in the name of purchasers. C- Settle rights of Financer and Contractor. D- Elapsing of maintenance period stipulated in Article (35) of this law. Article (46) Purchaser Right to Review The Purchaser is entitled to review the following: A- Terms of sale contract and details of real estate unit and he shall be granted period not more than fifteen days to revise sale contract before signing it. B- Settlement agreement concluded between Developer and Real Estate Broker and Broker’s card and registration number if the real estate unit is offered for sale through Real Estate Broker. C- Information related to value of facilities services and common areas and authority managing them. D- Deposits in sub-escrow account for the real estate unit belonging thereto. E- Details related to construction of real estate development project and completion rates thereof through periodical reports sent to him by Developer or request the same from Administration. Article (47) Purchaser Right to Withhold Due Payment If the agreed payments are related to specific completion rates in real estate development project, Purchaser may withhold due payment in payment schedule if Developer fails to commit to completion rate equivalent to this payment, provided notifying Administration, Developer and Escrow Account Trustee before due date of the payment. Article (48) Purchaser Right to Receive Real Estate Unit A- Developer is prohibited from preventing Purchaser who paid the entire price of real estate unit from acquiring the real estate unit. B- Developer may refrain from handing over the sold real estate unit to the Purchaser if the latter fails to pay its full price, unless Developer and Purchaser agree to postpone payment of real estate unit to a date after the date of handing over the unit. C- In case Developer refrains from handing over real estate unit to Purchaser, the Competent Judge shall issue order on petition to hand over the unit to Purchaser, upon request submitted by Purchaser along with report from Administration. Article (49) Developer Liability For Defects A- Without prejudice to provisions of contracting contract stipulated in Civil Transactions Law, Developer liability shall continue for the following: 1- Demolition of the building entirely or partially and repair any defects in the structural parts of the real estate development project for ten years starting from the date of obtaining completion certificate for real estate development project. 2- Repair or replace defective fixtures in the project for one year from date of handing over the unit to the Owner. These fixtures shall include mechanical, electrical, sanitary and sewerage works and the like and in case Owner refrains from receiving his unit for whatever reason, such period shall be counted as date of obtaining competition certificate for real estate development project. B- Any agreement contradicts with what stipulated in clause (A) of this article shall be void. Article (50) Purchaser Breach to Make Payments A- In case Purchaser breaches his obligations to implement off-plan sale contract, concluded between him and Real Estate Developer, the following rules and procedures shall apply: 1- Developer shall notify Administration according to the form prepared therewith of Purchaser breach of his contractual obligations. 2- Administration, immediately upon receiving the notification and verifying the Purchaser breach of his contractual obligations, shall do the following: A- Notify Purchaser of fulfilling his contractual obligations with Developer within thirty days from the notification date by the way determined by Administration. B- Make amicable settlement between Developer and Purchaser, if possible, and this settlement shall be established by addendum to contract signed by Developer and Purchaser. 3- If the period referred to in clause (2/A) of clause (A) of this article expires without Purchaser carrying out his contractual obligations or completing amicable settlement between him and Developer, Administration shall issue official document in favor of Developer, stating rate of his completion of real estate unit, subject matter of off-plan sale contract, according to standards and rules approved with Administration in this regard. 4- After receiving the official document referred to in clause (3) of this article, Developer shall be entitled to take the following measures against Purchaser as per completion rate, without resorting to judiciary or arbitration: A- In the event that Developer completed more than 80% of real estate unit construction, he shall be entitled to take any of the following: 1- Maintain the contract concluded between him and Purchaser and keep all amounts paid to him along with claiming Purchaser to pay the remaining balance of contract value. 2- Ask permission from to sell real estate unit, subject matter of contract, at auction in order to get the remaining amounts due to him, and Purchaser shall bear all costs resulted from this sale. 3- Terminate contract by his own free will and deduct not more than 40% of real estate unit price stipulated in off-plan sale contract and refund whatever excess during one year from the date of terminating the contract or within sixty days from the date or re-sale of real estate unit to another Purchaser, whichever is earlier. B- In the event the Developer completed between 60% and 80% of real estate unit, he shall be entitled to take any of the following: 1- Maintain the contract concluded between him and Purchaser and keep all amounts paid to him along with claiming Purchaser to pay the remaining balance of real estate unit price. 2- Terminate contract by his own free will and deduct not more than 30% of real estate unit price stipulated in off-plan sale contract and refund whatever excess during one year from the date of terminating the contract or within sixty days from the date or re-sale of real estate unit to another Purchaser, whichever is earlier. C- In case Developer starts working in the project according to designs approved by the competent authorities and his completion rate is less than 60% of real estate unit, he shall be entitled to terminate contract by his own free will and deduct not more than 30% of the amount paid to him by Purchaser and refund whatever excess during one year from the date of terminating the contract or within sixty days from the date or re-sale of real estate unit to another Purchaser, whichever is earlier. D- In case Real Estate Developer fails to start working in the project for any reason beyond his control and without negligence or omission from his side, he shall be entitled to terminate contract by his own free will and deduct not more than 20% of the amounts paid to him by Purchaser and refund whatever excess to Purchaser within sixty days from the date of terminating the contract. B- In case of cancelling real estate development project by reasoned resolution from Administration, Real Estate Developer should refund all amounts received from Purchasers, according to provisions of Article (24) of this law. C- Procedures and rules stipulated in this article shall not apply to sale contract of plot on which off-plan sale had not been conducted thereon and this sale shall remain subject to provisions stipulated in the contract concluded among parties thereof. D- Rules and procedures stipulated in this article shall apply to all off-plan sale contracts whether concluded before or after this law comes into force. E- Procedures and rules stipulated in this article shall not prevent the Purchaser from resorting to judiciary or arbitration, in case Real Estate Developer oppresses in using powers entrusted thereto in this article. Article (51) Real Estate Development Auditing Administration shall, at the expense of Developers, appoint engineering and accounting auditors licensed by the competent authority to conduct, under its supervision, audit works on real estate development projects, financial, accounting and technical statements related thereto and escrow accounts. Article (52) Attachment or Execution on Real Estate Development Projects & Escrow Accounts A- In all cases, precautionary attachment or distraint may not be imposed on real estate development project nor funds deposited in escrow account by any judicial or non-judicial authority. B- Real estate development projects and funds deposited in escrow account in favor of real estate development project shall not be included in the general guarantee of Developer’s creditors. Article (53) Registers Review It is permissible to review details and information recorded with Administration, registers of Escrow Account Trustee or Developer and request copy thereof for each of: 1- Purchasers within the limit of details and information of real estate units related to them. 2- Judicial Authority or Arbitration Body in case of existence of dispute before it. 3- Competent Official Authorities in the State. Article (54) Suspended Real Estate Development Projects In case it is established that real estate development project had been suspended by engineering or accounting reports and failure to make amicable settlement between Developer and Purchasers of real estate units, Administration shall be entitled to refer the project file to the Committee to recommend what shall be followed in regard thereof. Article (55) Fees & Violations & Fines By resolution from Council and based on proposal of the Department, table of fees and other one of violations and fines incurred on them shall be issued and proceeds of these fees and fines shall devolve into Department’s treasury and collection of unpaid amounts of fees and fines due to Department shall be by a claim issued by Administration Director, stating therein name of Debtor and his legal representative, amount of fee or fine and this claim shall be considered as writ of execution to be executed by competent execution judge according to Civil Transactions Law. Article (56) Law Officers Capacity Administration employees, nominated by resolution from Public Prosecutor upon request from Director-General, shall have law officers’ capacity in proving acts committed in violation of provisions of this law, regulations and decisions issued thereby. Article (57) Grievance Any interested party may submit grievance, before Grievance Committee formed in the Department for this purpose, against penalties and decisions issued against him according to provisions of this law and by controls and procedures issued by resolution from Director-General and Department shall be entitled to reconcile with violator in consideration of half of fine value after he removed reasons of violation. Article (58) Mediation & Settlement Request Times In case of submitting mediation and settlement request on disputes subject to provisions of this law, Administration shall decide thereon within thirty days from the date of submitting it, unless the two parties agreed to extend the deadline of deciding thereon. Article (59) Mediation & Settlement If dispute is settled, this shall be established by an agreement signed by parties thereof and shall be considered as writ of execution and if settlement is not made or one party notifies Administration of non-desire to make mediation or continue therein or it turned out uselessness of continuing due to lack of parties seriousness, Administration shall terminate mediation procedures and prepare recommendation of its proposals in respect of deciding on the dispute to be sent to the authority that undertakes deciding on the dispute. Article (60) Terms of Accepting Lawsuit & Arbitration Request Except matters that are competence of summary judiciary, execution disputes and requests of orders on petition and requests of execution orders, lawsuit that is filed to Real Estate & Rental Disputes Committee, Courts or Arbitration Centers in respect of disputes subject to provisions of this law, shall not be accepted except after submitting mediation and settlement request to Administration and passing of the deadline to issue recommendation thereof. Article (61) Issue Executive Regulation & Resolutions The Council shall issue executive regulation of this law upon proposal of the Department. Director-General and Administration Director, each within competence thereof, shall issue necessary resolutions to execute provisions of this law and executive regulation thereof and till this regulation shall be issued, the existing regulations and decisions shall apply, in a way that does not contradict with provisions thereof. Article (62) Cancellations Any text or provision contradicts with provisions of this law shall be cancelled. Article (63) Publishing & Enforcement This Law shall come into force after sixty days from date of its promulgation and be published in the Official Gazette. Saud Bin Saqr Bin Mohamed Al Qasimi Ruler of Ras Al Khaimah Issued by us on this day fourth of Safar 1445H. Corresponding to twenty first of August 2023G.
  • Definitions 
    In implementing the provisions of this Law, the following words and phrases shall have the meanings corresponding to each of them respectively, unless context otherwise stipulates:
    State: United Arab Emirates 
    Emirate: Emirate of Ras Al Khaimah
    Ruler: His Highness Ruler of Ras Al Khaimah
    Council: Executive Council of the Emirate
    Competent Authority: The Competent Authority for issuing licenses of practicing the economic activity
    Department:    Department of Ras Al Khaimah Municipality 
    Director General: Director General of the Department 
    Sector: Lands & Properties Sector in the Department
    Administration:  Real Estate Regulatory Administration in the Department 
    Competent 
    Administration:  Building Administration in the Department 
    Administration Manager: Manager of Real Estate Regulatory Administration in the Department
    Real Estate 
    Development: 
    Develop vacant lands, construct infrastructure and common services facilities therein, split them, construct or renovate buildings thereon for residential, commercial, industrial or mixed purposes 
    Main Real Estate Development Project: The one classified as Main Real Estate Development Project according to standards and controls approved by the Administration
    Sub-Real Estate Development Project: The one classified as Sub- Real Estate Development Project according to standards and controls approved by the Administration
    Main Developer: The legal person licensed to practice real estate development works for the main real estate project
    Sub-Developer: The legal person licensed to practice real estate development works for the sub-real estate project
    Independent Developer: The legal person licensed to practice real estate development works within independent real estate project
    Escrow Account: Special account in which amounts paid by purchasers of off-plan units in real estate development project or financers thereof or the developer 
    Escrow Account Trustee The bank or financial institution which is approved by the Department to manage the escrow account of the project according to provisions of this law
    Completion Certificate: A document issued by the Competent Administration after completing all construction works after conforming the same to building permit charts
    Project Chart: Set of charts, sketches and engineering drawings prepared by the Developer and approved by the Department and Competent Authority 
    Site Chart: The illustrative map prepared by the Developer of the building boundaries within the common property approved by the Department 
    Charts: Include project charts and site chart
    Master Community
     System: Terms and conditions which development and operation of the main project, common properties and common facilities therein are subject thereto, including planning and construction standards of the community 
    Common Property: It includes the building, parts and annexes thereof intended for common use, including land on which it is erected as well as the land split into units dedicated for independent title. 

  • Application Scope 
    Provisions of this law shall apply to entire territory of the emirate including Ras Al Khaimah Economic Zones.

  • Real Estate Projects Development Committee 
    A committee named as “Real Estate Projects Development Committee” shall be established in the Department and referred to in this Law as “The Committee”, presided by Director General or his representative and membership of Land & Property Sector Director, Urban Planning & Development Sector Director, Real Estate Regulatory Administration Director, Legal Advisor from the Department, Representative of Ras Al Khaimah Economic Zones Authority and Representative of  Tourism Development Authority and The President is entitled to seek assistance of whomever he deems that his presence in the Committee is necessary, from among competent persons, without having counting vote in the deliberations. 
     
  • Real Estate Developers Register 
    A- A register to record real estate developers in the emirate shall be created and named as “Real Estate Developers Register” and the Director shall issue resolution determining therein the register form and recording procedures in it, term of recording and renewal thereof. 
    B- It is prohibited for any person to practice real estate development activity in the emirate, unless he is recorded in the register stipulated in paragraph (A) of this article.
    C- The Developer shall notify Administration of any change made to details and information related thereto that results in amending his details in Real Estate Developers Register, within thirty days from date of making the change. 
     
  • Real Estate Development Projects Register 
    A register to record real estate development projects shall be created and named as “Real Estate Development Register” and the Director shall issue resolution determining therein the register form and recording procedures in it, term thereof and its renewal conditions.
    The Developer may not start implementing infrastructure or construction works of real estate development project or offer a unit therein for sale before recording in this register. 
     
  • Committee Competences 
    The Committee shall undertake the following competences: 
    1- Consider applications of those who want to develop and construct major real estate projects that require special approvals and submit recommendations thereon to the Ruler. 
    2- Submit recommendations to the Ruler on determining which real estate zone or construct a freehold zone, in which real estate projects or investment buildings may be implemented or constructed therein. 
    3- Express opinion on real estate development projects in which government or entities owned thereby are party therein. 
    4- Submit recommendations to the Council on changing the Developer due to delay in implementing the project or existence of any other impediments that inflict damage upon purchasers and impede implementation of the project so the Council shall issue resolution in respect thereof.
    5- Issue resolution of renewing, suspending or cancelling the Developer license. 
    6- Remove the Developer from real estate developers register and re-register the same. 
    7- Any other tasks assigned thereto by the Council and conform to nature of its work. 
     
  • Administration Competences
    Authority shall have competence to the following:
    1- Organize, control and supervise real estate escrow accounts and approve banking and financial institutions qualified to manage these accounts. 
    2- Ensure that real estate developers meet the conditions of recording them in developers register. 
    3- Mediation and amicable settlement of any dispute arising from real estate development works. 
    4- Review and approve Master Community System in real estate projects. 
    5- Contribute to analysis of real estate market movement and its indicators in the emirate, make future plans to develop and enhance real estate sector and increase contributions thereof in the economic activity of the emirate. 
    6- Approve rules governing practitioners of real estate development profession, property sale and rental, property brokers and appraisers, as well as real estate activities related to real estate development. 
    7- Regulate real estate activities, control and supervise practitioners thereof. 
    8- Issue necessary regulatory policies to train and qualify workers in establishments permitted to work in real estate activities or any other regulations required to accomplish tasks assigned to such establishments. 
    9- Procedures of recording real estate activities practitioners in the registers prepared for that and issue identification cards for those who work in such activities. 
    10- Consider and investigate complaints presented against real estate activities practitioners and take appropriate procedures in respect thereof according to provisions of this law.  
    11- Approve real estate development projects, monitor performance rates therein and issue necessary decisions and recommendations in respect thereof.  
    12- Approve engineering consultancy contracts for real estate development. 
    13- Conduct financial audit of real estate projects by itself or whomever it deems appropriate among auditors at the cost of the Developer. 
    14- Grant permits for off-plan sale. 
    15- Approve Master Community System and control workflow therein and issue necessary decisions and recommendations in respect thereof. 
    16- Prepare reports and conduct necessary investigations in respect of stalled projects and present the same to the Committee. 
    17- Approve contracting contracts between contractor and developer. 
    18- Any other tasks - conform to nature of its work - assigned thereto by the Department.

  • Real Estate Developers License 
    License to practice real estate development activity shall be issued by the Competent Authority, based upon permit from the Administration. This permit shall not exempt the Developer from the necessity to obtain any licenses, permits or other approvals required by the Competent Authority to enable him to carry out his business.  
     
  • Real Estate Developers Recording Terms
    To record real estate developer in real estate developers’ register, the following should be submitted:
    1- Copy of valid trade license issued by the competent authority. 
    2- Memorandum of Association of the company and amendment annexes, if any.
    3- Proof of financial leverage according to standards and controls approved by the Administration. 
    4- Written undertaking to record the real estate project in real estate projects register within one year from recording. 
    5- Any other terms determined by the Administration. 
     
  • Developer Obligations   
    The Developer shall obligate to the following: 
    1- Implement real estate project according to approved engineering designs and time schedule determined for completion thereof. 
    2- Implement infrastructure works and services necessary for the project. 
    3- Inform the purchasers of all details related to the project and real estate units sold to them, including rights and restrictions resulted therefrom and notify them of any changes made to these details. 
    4- Register the real estate units under the name of the purchaser in the land register designated for this with the Administration and handover all its certificates, deeds and documents to him. 
    5- Handover the real estate unit to the purchaser including all services that enable him to benefit from it. 
     
  • Delete Record From Real Estate Developers Register  
    A- The Committee is entitled to delete record of Developer from real estate developers register in the following cases: 
    1- Failure to record real estate project in real estate projects register within one year from date of recording it. 
    2- Submit deletion application by the Developer. 
    3- Cancel the trade license by the competent authority. 
    4- Issue final judgment of his bankruptcy. 
    B- The competent authority shall coordinate with the Committee upon proceeding with cancelling the trade license. 
    C- Deletion of the Developer’s record from real estate developers register shall not result in exempting him from whatever liability towards the Department or third party. 
     
  • Conflict of Interests 
    1- Upon carrying on his works, each of Developer, Consultant and Contractor shall commit to disclose to the Department, in writing, whether he has direct or indirect personal interest that contradicts with requirements of his work or any other details requested by the Department. 
    2- It is not permissible that consultant, contractor or sub-contractor shall be the developer himself or any of them has direct or indirect interest therewith. 
     
  • Terms of Recording Real Estate Development Project
    In order to record real estate development project in real estate development projects register, the following should be presented: 
    1- Title deed of the plot, or equivalent thereof or approval of title right holders marked in land register or copy of sale contract concluded between the Main Developer and Sub-Developer. 
    2- All charts approved by the Department.
    3- Technical specifications approved by the project consultant. 
    4- Copy of project building or master community management system. 
    5- Licenses of the project. 
    6- Cadastral survey of the project by a survey office approved by the Department. 
    7- Copy of any agreements concluded between the Developer and any authority related to the development. 
    8- Detailed program of construction and architectural works, services work related to the project, implementation phases thereof and any modifications made to such works. 
    9- Economic feasibility study and finance plan for the project. 
    10- Report from licensed consulting engineer determining the estimated value of the project. 
    11- Statement of expected financial flow for project completion phases as per the time schedule approved by the Consultant. 
    12- Any other necessary conditions for recording that shall be determined by resolution issued by the Administration. 
     
  • Development Contract Termination 
    The Main Developer shall obtain approval of the Administration to terminate the contract concluded between him and the Sub-Developer. In case of terminating the sale contracts between the Main and Sub-Developer, the Committee may – upon proposal of the Administration – recommend to change the Developer without prejudice to purchasers’ rights. 
     
  • Charts Amendment & Contradiction
    A- Developer, Contractor or Consultant may not make any amendments to the charts or technical specifications of real estate project except after obtaining approval of the Administration. 
    B- In case of existence of any contradiction between details of main and sub-real estate development project charts, the details of main real estate development project shall prevail. 
     
  • Prevent Disposal of Real Estate Project Plot 
    The Administration should place “Disposal Prohibition” restriction in land register in respect of the plot to be developed and left this restriction whenever necessary. 
     
  • Developer Dedicated Facilities 
    Upon approving project or site chart for the first time and after obtaining approval of Administration and Building Administration in the Department, the Developer may identify areas owned by him in project and site chart that are prepared for private, commercial or investment use, provided that such approval shall be granted and utilize areas owned by the Developer in a way that does not contradict with Master Community System and owners’ rights. 
     
  • Cadastral Survey
    A- Upon selling, the Developer should commit to determine the net sold area and the common area for each real estate unit according to areas approved by the Department. 
    B- By resolution from the Director General, the standards and controls related to cadastral survey of real estate development projects shall be determined and through which net and common areas of the real estate units shall be determined, according to best international standards in this regard. 

  • Real Estate Project Financing Plan 
    A- Developer should submit financial plan to the Administration, indicating therein sources of financing the real estate development project, considering the following:  
    1- The contribution of the Developer in finance shall not be less than 20% of the project cost. 
    2- Construction of the project shall not depend completely on off-plan sale of the real estate units. 
    B- After studying project finance plan, Administration shall take decision of approving the final value of the contributions of financing resources thereof and it shall be entitled, based on project economic feasibility study submitted by the Developer and after verifying his fiscal capacity, to amend contributions rates of such resources. 
     
  • Implementation Launch & Completion Rates 
    A- Developer should do the following
    1- Start implementing infrastructure or construction works of real estate development project within maximum period of six months from the date of recording the project in real estate development projects register, unless he is granted similar period upon his request and approval of the Administration Director. 
    2- Provide the Administration with monthly reports prepared by the Contractor and approved by the Consultant that include workflow in the project and completion phases and financial flow thereof, according to the time schedule of it.  
    B- Administration may – under its supervision – assign engineering or accounting office in the State, to prepare engineering or accounting report on the project, according to what it deems appropriate and fees thereof shall be at the expense of the Developer. 
     
  • Real Estate Development Project Mortgage
    A- Developer may mortgage real estate units in real estate development project in order to obtain finance to complete construction thereof, according to the following terms and controls: 
    1- The completion of the project shall exceed 50% of project construction works. 
    2- Mortgage shall be made on real estate units registered in the name of the Developer in the project. 
    3- Deposit entire financing amount in escrow account directly. 
    4- Stipulate expressly in sale contract of the sold real estate unit that the real estate unit is mortgaged and state the name of the Mortgagee. 
    5- Record the mortgaged real estate unit in the name of the purchaser in the initial land registers and burdened with mortgage in favor of the Financer. 
    B- Part of the sold real estate unit price, which is deposited in the escrow account, shall be deducted to pay the loan as per percentage of real estate unit share in the finance. 
    C- Mortgage on mortgaged real estate unit shall end in case of full payment of its price by the Purchaser and deposit the same in the escrow account. 
     
  • Master Community Management System 
    A- The Main Developer shall prepare Management System of the Master Community in main real estate development project before taking any legal act on the real estate units in the project, provided it shall be approved by the Administration. 
    B- No amendment may be made to Master Community Management System that impairs the rights of purchasers except after obtaining approval of Administration 
     
  • Building Management System 
    A- The Sub-Developer shall prepare Building Management System in sub-real estate development projects and approve it from Administration before taking any legal act on the real estate units.
    B- If part of the sub-real estate development project had been developed on phases, it is required to prepare Building Management System for the part that had been developed. 
    C- No amendment may be made to Building Management System that impairs the rights of real estate units’ owners except after obtaining approval of Administration
     
  • Real Estate Development Project Cancellation 
    A- Real estate development project shall be cancelled and deleted from real estate development projects register in the following cases:
    1- Commencement of implementing the project is delayed beyond the period determined in article (20) of this law. 
    2- Developer submitted request to cancel the project for material reasons accepted by Administration 
    3- Delete the Developer from real estate developers register unless the project is transferred to another Developer.
    B- The project shall not be cancelled except after refunding the entire amounts paid by the purchasers and clear the rights of Contractor, Consultant, Escrow Account Trustee and any other rights resulted from the same project
    C- Cancellation of the project shall not result in exempting the Developer from responsibility, whatever type thereof towards Department or third parties. 
     
  • Real Estate Units Off-Plan Sale
    In case the Sub-Developer purchases from the Main Developer the property subject matter of development in installment, it is required to stipulate expressly in the contract concluded between them the right of the first to off-plan sale.
     
  • Real Estate Units Off-Plan Sale Permit
    Developer may off-plan sell real estate units in real estate development project after sale permit is issued by Administration. 
     
  • Real Estate Units Off-Plan Sale Permit Conditions 
    1- Real estate development project shall be recorded in real estate development projects register. 
    2- Open escrow account for the project. 
    3- Administration approves units’ reservation forms and sale contracts thereof presented by Developer. 
    4- Any other conditions determined by resolution from Administration. 
    And each sale made after enforcing provisions of this law without obtaining the mentioned permit shall be void. 
     
  • Real Estate Units Off-Plan Sale Advertisement
    A- Developer may not advertise in local or foreign media or participate in local or foreign exhibitions to promote real estate units off-plan sale in real estate development project except after obtaining necessary permit from Administration. 
    B- In case of advertising sale of real estate units in the project, Developer shall state the following information: 
    1- Project location and number of the plot on which the project is constructed
    2- Delivery date of the project which is approved by Administration. 
    3- Developer number in real estate developers register with Administration. 
    4- Project number in real estate development projects register. 
    5- Escrow account number. 
    6- Any other details determined by resolution from Administration. 
     
  • Real Estate Units’ Reservation Deed
    A- Developer or his representative should issue a deed named “Real Estate Unit Reservation Deed” to real estate unit off-plan reservation applicant that shall contain the following details:
    1- Developer name, address, phone number, e-mail, trade license number and his recording number in real estate developers register. 
    2- Reservation Applicant name, address, phone number, e-mail, ID or passport number, and trade license number if he is legal person.
    3- Accurate description of the reserved real estate unit and its area, number and location in the project.
    4- Price of the reserved real estate unit and reservation amount. 
    5- Stipulate the right of reservation applicant to purchase the real estate unit within thirty days from the following day of signing reservation deed. 
    6- Obligations of Reservation Applicant and Developer in case of reneging on reservation.
    7- Name of escrow account trustee, sub-escrow account number for the reserved real estate unit. 
    8- State the financer of the project and address thereof and finance limit value. 
    B- Details stated in real estate unit reservation deed shall be pretense for Developer and Reservation Applicant and no change thereto shall be considered unless it is made on the form approved by Administration and in all cases, Developer should notify Administration of the changes made to details of reservation deed.  
     
  • Real Estate Unit Reservation Effect 
    A- Reservation amount shall be considered part of the sold real estate unit price and Developer should deposit the entire amount in escrow account. 
    B- Developer shall commit to reservation deed concluded with Reservation Applicant and he should conclude real estate unit sale contract within thirty days from the following day of signing reservation deed and he may not sell or offer real estate unit – subject matter of reservation deed - for sale throughout this period. 
    C- If Developer does not hand over sale contract to Reservation Applicant within the period stipulated in clause (B) of this article, Reservation Applicant may request from Administration to compel Developer to complete sale of real estate unit and hand over sale contract or cancel reservation deed and refund the entire reservation amount. 
    D- If Reservation Applicant refuses to sign sale contract or delays to return it to the Developer within fifteen days from date of receiving the same, reservation deed shall be cancelled and Reservation Applicant shall not be entitled to refund reservation amount. 
    E- Reservation Applicant may not dispose of the real estate unit by reservation deed or offer the same for sale or make any right in rem thereon and any of these acts shall not apply to Developer.
     
  • Real Estate Unit Sale Recording in Initial Land Register
    A- Upon recording real estate development project in initial register, all real estate units shall be marked as “Vacant”. 
    B- All dispositions made on off-plan sold real estate units shall be recorded in the initial land register. Sale and other legal acts transferring or restricting title or any rights derived therefrom shall be void if the same are not recorded in such register. 
    C- Before completion of project, Real estate Developer may record any vacant real estate unit in his name in initial land register, provided he shall commit to deposit price of real estate unit in escrow account and pay registration fees. 
    D- Developer should, within five working days from the date of signing sale contract by the Purchaser, record the sold real estate unit in the name of the Purchaser in the initial land register. 
    E- In case of delay of Developer in recording the sold real estate unit, the Purchaser may request from Administration to register real estate unit in his name after payment of registration fees. 
     
  • Units Replacement 
    Developer may not replace off-plan sold real estate unit with other real estate unit, whether these units are in one project or different projects except after approval of Administration on replacement and Developer’s commitment to take necessary procedures to maintain the escrow account and he shall bear all expenses and expenditures necessary for this replacement.
     
  • Disposal of Real Estate Units 
    It is permissible to dispose of off-plan sold real estate units and recorded in initial land register by sale or mortgage and other legal dispositions under approval of two parties of contract. Developer shall be prohibited from receiving any fees in respect of the sale or re-sale and other legal dispositions made on such units with exception of expenses received by Developer from third party and approved by Administration.
     
  • Register Real Estate Unit in Final Land Register 
    Upon issuing real estate development project completion certificate and approve final cadastral survey and units sorting, Developer must do the following:
    1- Transfer title of sold real estate units to Purchasers in case they paid full price within maximum period of thirty days and obtain real estate unite title deed. 
    2- Transfer title of vacant real estate units in the name of Developer and pay registration fees. 
     
  • Maintenance Percentage Holding 
    A- Escrow Account Trustee should hold percentage of 5% of total cost of real estate development project for period of one year from date of issuing project completion certificate in order to cover the cost of maintaining the defects that may appear after completion thereof. 
    B- Escrow Account Trustee may not disburse the held amount or any part thereof except after elapsing of the one year period stipulated in clause (A) of this article and Developer presents technical report from engineering office approved by the Department at his own expense, to the effect that all necessary maintenance works had been carried out or there is no need for maintenance. 
    C- Administration may approve Developer request to withdraw the held amount before expiry of the one year period stipulated in clause (A) of this article in consideration of submitting bank guarantee by the Developer in the name of the Department that can be liquidated and equals the amount to be withdrawn.  
     
  • Escrow Account Trustees Register
    A- A register of Escrow Account Trustees named “Escrow Account Trustees Register” shall be created with Administration. 
    B- Escrow Account Trustee shall commit to provide Administration with monthly account statements or whenever Administration requests this which include all financial statements of main and sub-accounts of real estate units, including names of real estate units’ purchasers, updates of such accounts and the remaining balance thereof. 
     
  • Escrow Account Trustees Registration Terms 
    In order to be recorded in Escrow Account Trustees Register, the following conditions shall be met: 
    1- Registration Applicant is a bank or financial institution that is licensed in the State. 
    2- Registration Applicant shall have main office or branch in the emirate. 
    3- Registration Applicant shall assign electronic system to manage escrow accounts. 
    4- Registration Applicant shall have engineering section or conclude contract with engineering office approved in the State. 
    5- Any other conditions issued by resolution from Administration. 
     
  • Open Escrow Account
    A- Developer, who wants to off-plan sell real estate units, shall commit to open escrow account in the name of real estate development project with one of escrow account trustees registered with Administration. 
    B- In case the Developer is implementing several projects, he should open escrow account for each project separately. 
    C- The escrow account shall consist of main account for the project and sub-account for each real estate unit separately in the same project. Escrow account agreement shall determine procedures and controls of the main escrow account and sub-escrow accounts. 
    D- By no means, escrow accounts of more than project may not be merged with each other or merge main escrow account with sub-escrow accounts. 
    E- Controls and procedures of opening escrow accounts shall be determined by resolutions issued by Administration. 
    F- Administration may create its own escrow account through which it provides account trustee services. 
     
  • Escrow Account Agreement 
    A- Escrow account shall be opened in the name of real estate development project under an agreement concluded between Developer and Escrow Account Trustee named as “Escrow Account Agreement” as per the form approved by the Department. 
    B- Escrow Account Agreement shall not be accepted except after approving it by the Department and escrow account shall not be activated except after issuing final approval on recording the project in real estate development projects register. 
     
  • Deposit Price in Escrow Account 
    1- Purchaser shall commit to pay price of real estate unit in the sub-escrow account assigned thereto according to payments plan stipulated in its sale contract. It is not permissible to refrain from paying any payment except in cases and conditions stipulated in Article (48) of this law. 
    2- Developer is prohibited from receiving any amounts of real estate unit price directly out the escrow account or deducting real estate broker commission from its price. 
    3- Projects, for which special resolutions had been issued or obtained completion certificate before this law comes into force, shall be excluded. 
     
  • Disbursement From Escrow 
    1- Disbursement from escrow account shall be made after obtaining Administration approval in writing on disbursement deed in order to spend on real estate development construction. Amounts which Administration gives permission to spend them on promotion and marketing of the project shall be excluded provided they shall not exceed 5% of the amounts deposited in the account. 
    2- It is prohibited to pay the price of the plot allocated to construct the project from the escrow account or price of selling real estate units unless project completion certificate is issued. 
    3- Escrow Account Trustee may not deliver bounced checks to Developer except after approval of Administration. 
     
  • Disburse Profits From Escrow Account
    Developer may – upon approval of Administration – disburse from escrow account a percentage not exceeding 5% of the expected profits of real estate development project provided that the same shall be divided into three payments during completion period, according to the following conditions: 
    1- Deposits volume in escrow account reaches amount exceeds remaining construction works cost. 
    2- Completion rate exceeds 60% of project construction works. 
     
  • Suspend Disbursement From Escrow Account
    Administration may suspend disbursement of any amount from escrow account in case of any circumstance that may result in non-completion of real estate development project.  
     
  • Escrow Account Coverage
    A- In case there are insufficient amounts in escrow account to cover construction works, Administration may issue an order to Developer to deposit amounts in escrow account within defined time schedule to cover the value of real estate development project construction works or settle rights of each of Financer and Contractor. 
    B- In case of non-compliance of Developer, or non-commitment to time schedule of payments stipulated in the previous clause of this article, Administration may consider the project suspended. 
     
  • Close Escrow Account
    Director-General shall issue resolution of closing escrow account after making sure that the following conditions are met:  
    A- Developer obtains completion certificate.
    B- Register all units in the name of purchasers.
    C- Settle rights of Financer and Contractor.
    D- Elapsing of maintenance period stipulated in Article (35) of this law. 
     
  • Purchaser Right to Review 
    The Purchaser is entitled to review the following:
    A- Terms of sale contract and details of real estate unit and he shall be granted period not more than fifteen days to revise sale contract before signing it.
    B- Settlement agreement concluded between Developer and Real Estate Broker and Broker’s card and registration number if the real estate unit is offered for sale through Real Estate Broker. 
    C- Information related to value of facilities services and common areas and authority managing them.
    D- Deposits in sub-escrow account for the real estate unit belonging thereto. 
    E- Details related to construction of real estate development project and completion rates thereof through periodical reports sent to him by Developer or request the same from Administration. 
     
  • Purchaser Right to Withhold Due Payment
    If the agreed payments are related to specific completion rates in real estate development project, Purchaser may withhold due payment in payment schedule if Developer fails to commit to completion rate equivalent to this payment, provided notifying Administration, Developer and Escrow Account Trustee before due date of the payment. 
     
  • Purchaser Right to Receive Real Estate Unit
    A- Developer is prohibited from preventing Purchaser who paid the entire price of real estate unit from acquiring the real estate unit.
    B- Developer may refrain from handing over the sold real estate unit to the Purchaser if the latter fails to pay its full price, unless Developer and Purchaser agree to postpone payment of real estate unit to a date after the date of handing over the unit.  
    C- In case Developer refrains from handing over real estate unit to Purchaser, the Competent Judge shall issue order on petition to hand over the unit to Purchaser, upon request submitted by Purchaser along with report from Administration. 
     
  • Developer Liability For Defects 
    A- Without prejudice to provisions of contracting contract stipulated in Civil Transactions Law, Developer liability shall continue for the following:   
    1- Demolition of the building entirely or partially and repair any defects in the structural parts of the real estate development project for ten years starting from the date of obtaining completion certificate for real estate development project.  
    2- Repair or replace defective fixtures in the project for one year from date of handing over the unit to the Owner. These fixtures shall include mechanical, electrical, sanitary and sewerage works and the like and in case Owner refrains from receiving his unit for whatever reason, such period shall be counted as date of obtaining competition certificate for real estate development project. 
    B- Any agreement contradicts with what stipulated in clause (A) of this article shall be void.
     
  • Purchaser Breach to Make Payments
    A- In case Purchaser breaches his obligations to implement off-plan sale contract, concluded between him and Real Estate Developer, the following rules and procedures shall apply: 
    1- Developer shall notify Administration according to the form prepared therewith of Purchaser breach of his contractual obligations. 
    2- Administration, immediately upon receiving the notification and verifying the Purchaser breach of his contractual obligations, shall do the following: 
    A- Notify Purchaser of fulfilling his contractual obligations with Developer within thirty days from the notification date by the way determined by Administration. 
    B- Make amicable settlement between Developer and Purchaser, if possible, and this settlement shall be established by addendum to contract signed by Developer and Purchaser. 
    3- If the period referred to in clause (2/A) of clause (A) of this article expires without Purchaser carrying out his contractual obligations or completing amicable settlement between him and Developer, Administration shall issue official document in favor of Developer, stating rate of his completion of real estate unit, subject matter of off-plan sale contract, according to standards and rules approved with Administration in this regard. 
    4- After receiving the official document referred to in clause (3) of this article, Developer shall be entitled to take the following measures against Purchaser as per completion rate, without resorting to judiciary or arbitration: 
    A- In the event that Developer completed more than 80% of real estate unit construction, he shall be entitled to take any of the following: 
    1- Maintain the contract concluded between him and Purchaser and keep all amounts paid to him along with claiming Purchaser to pay the remaining balance of contract value. 
    2- Ask permission from to sell real estate unit, subject matter of contract, at auction in order to get the remaining amounts due to him, and Purchaser shall bear all costs resulted from this sale.  
    3- Terminate contract by his own free will and deduct not more than 40% of real estate unit price stipulated in off-plan sale contract and refund whatever excess during one year from the date of terminating the contract or within sixty days from the date or re-sale of real estate unit to another Purchaser, whichever is earlier. 
    B- In the event the Developer completed between 60% and 80% of real estate unit, he shall be entitled to take any of the following: 
    1- Maintain the contract concluded between him and Purchaser and keep all amounts paid to him along with claiming Purchaser to pay the remaining balance of real estate unit price.
    2- Terminate contract by his own free will and deduct not more than 30% of real estate unit price stipulated in off-plan sale contract and refund whatever excess during one year from the date of terminating the contract or within sixty days from the date or re-sale of real estate unit to another Purchaser, whichever is earlier.
    C- In case Developer starts working in the project according to designs approved by the competent authorities and his completion rate is less than 60% of real estate unit, he shall be entitled to terminate contract by his own free will and deduct not more than 30% of the amount paid to him by Purchaser and refund whatever excess during one year from the date of terminating the contract or within sixty days from the date or re-sale of real estate unit to another Purchaser, whichever is earlier.
    D- In case Real Estate Developer fails to start working in the project for any reason beyond his control and without negligence or omission from his side, he shall be entitled to terminate contract by his own free will and deduct not more than 20% of the amounts paid to him by Purchaser and refund whatever excess to Purchaser within sixty days from the date of terminating the contract.
    B- In case of cancelling real estate development project by reasoned resolution from Administration, Real Estate Developer should refund all amounts received from Purchasers, according to provisions of Article (24) of this law. 
    C- Procedures and rules stipulated in this article shall not apply to sale contract of plot on which off-plan sale had not been conducted thereon and this sale shall remain subject to provisions stipulated in the contract concluded among parties thereof. 
    D- Rules and procedures stipulated in this article shall apply to all off-plan sale contracts whether concluded before or after this law comes into force. 
    E- Procedures and rules stipulated in this article shall not prevent the Purchaser from resorting to judiciary or arbitration, in case Real Estate Developer oppresses in using powers entrusted thereto in this article. 
     
  • Real Estate Development Auditing 
    Administration shall, at the expense of Developers, appoint engineering and accounting auditors licensed by the competent authority to conduct, under its supervision, audit works on real estate development projects, financial, accounting and technical statements related thereto and escrow accounts. 
     
  • Attachment or Execution on Real Estate Development Projects & Escrow Accounts
    A- In all cases, precautionary attachment or distraint may not be imposed on real estate development project nor funds deposited in escrow account by any judicial or non-judicial authority. 
    B- Real estate development projects and funds deposited in escrow account in favor of real estate development project shall not be included in the general guarantee of Developer’s creditors.
     
  • Registers Review 
    It is permissible to review details and information recorded with Administration, registers of Escrow Account Trustee or Developer and request copy thereof for each of: 
    1- Purchasers within the limit of details and information of real estate units related to them. 
    2- Judicial Authority or Arbitration Body in case of existence of dispute before it. 
    3- Competent Official Authorities in the State. 
     
  • Suspended Real Estate Development Projects
    In case it is established that real estate development project had been suspended by engineering or accounting reports and failure to make amicable settlement between Developer and Purchasers of real estate units, Administration shall be entitled to refer the project file to the Committee to recommend what shall be followed in regard thereof. 
     
  • Fees & Violations & Fines 
    By resolution from Council and based on proposal of the Department, table of fees and other one of violations and fines incurred on them shall be issued and proceeds of these fees and fines shall devolve into Department’s treasury and collection of unpaid amounts of fees and fines due to Department shall be by a claim issued by Administration Director, stating therein name of Debtor and his legal representative, amount of fee or fine and this claim shall be considered as writ of execution to be executed by competent execution judge according to Civil Transactions Law.  
     
  • Law Officers Capacity 
    Administration employees, nominated by resolution from Public Prosecutor upon request from Director-General, shall have law officers’ capacity in proving acts committed in violation of provisions of this law, regulations and decisions issued thereby. 
     
  • Grievance 
    Any interested party may submit grievance, before Grievance Committee formed in the Department for this purpose, against penalties and decisions issued against him according to provisions of this law and by controls and procedures issued by resolution from Director-General and Department shall be entitled to reconcile with violator in consideration of half of fine value after he removed reasons of violation. 
     
  • Mediation & Settlement Request Times 
    In case of submitting mediation and settlement request on disputes subject to provisions of this law, Administration shall decide thereon within thirty days from the date of submitting it, unless the two parties agreed to extend the deadline of deciding thereon. 
     
  • Mediation & Settlement 
    If dispute is settled, this shall be established by an agreement signed by parties thereof and shall be considered as writ of execution and if settlement is not made or one party notifies Administration of non-desire to make mediation or continue therein or it turned out uselessness of continuing due to lack of parties seriousness, Administration shall terminate mediation procedures and prepare recommendation of its proposals in respect of deciding on the dispute to be sent to the authority that undertakes deciding on the dispute. 
     
  • Terms of Accepting Lawsuit & Arbitration Request 
    Except matters that are competence of summary judiciary, execution disputes and requests of orders on petition and requests of execution orders, lawsuit that is filed to Real Estate & Rental Disputes Committee, Courts or Arbitration Centers in respect of disputes subject to provisions of this law, shall not be accepted except after submitting mediation and settlement request to Administration and passing of the deadline to issue recommendation thereof. 

  • Issue Executive Regulation & Resolutions
    The Council shall issue executive regulation of this law upon proposal of the Department. Director-General and Administration Director, each within competence thereof, shall issue necessary resolutions to execute provisions of this law and executive regulation thereof and till this regulation shall be issued, the existing regulations and decisions shall apply, in a way that does not contradict with provisions thereof.  
     
  • Cancellations 
    Any text or provision contradicts with provisions of this law shall be cancelled. 
     
  • Publishing & Enforcement
    This Law shall come into force after sixty days from date of its promulgation and be published in the Official Gazette.
Classification
  • Real Estate Affairs
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