Source: 7 Days
Lawyers have questioned whether the Dubai Land Department (DLD) has the authority to cancel building contracts and seize properties.
The DLD has sent out letters to investors in building projects, including Mazaya Business Avenue and Jumeirah Business Centre Five (both in Jumeirah Lake Towers), stressing that if they fail to make outstanding payments within a fortnight their properties will be taken and auctioned off.
The letters also state that 40 per cent of any investment so far will be confiscated.
But lawyers have hit back, claiming the Land Department does not have the right.
“My argument and I believe the entire legal community feels the same; because the DLD is not a judicial body, these judgements are not enforceable.
Only a court can enforce them,” Ludmila Yamalova, partner at Al Sayyah Advocates and Legal Consultants, told 7DAYS.
Jerry Parks, partner and head of real estate at Taylor Wessing Middle East agreed, saying: “The DLD has no rights to cancel a sale and purchase agreement as opposed to a project… it is not a right of the DLD to repossess a property - it is a right on the part of the developer if there is a default on the part of the purchaser and the proper legal steps have been taken to terminate the sale and purchase agreement.”
However, Mohammed Sultan Thani, assistant general director at DLD said that “according to the law the DLD has the right to cancel the contract” and that letters were sent only to investors in projects that are 80 per cent or more complete.
But Yamalova added that the notices refer to a decree, number 6 of 2010, that has yet to be made official, saying: “The Dubai Land Department is over-stepping its boundaries here.”
The Dubai business partner of Russian investor Omar Ramazanov, who has invested $2.7million in Mazaya Business Avenue said receiving the letter was very “threatening”.
“We don’t say that we don’t want to pay, at least let them approach us properly... it is a threat,” said Mehdi Guliyev, adding that the project is more than a year late.