Developers offer relief for Dubai property owners missing payment installments
Dubai: Some of the biggest developers in Dubai are starting to offer more flexibility if buyers miss out on their next installments on handed over properties. This means that if payments are missed, the developers will not immediately initiate legal action.
In such cases, one master-developer said it will take on the management of the property and collect rents from the tenant (if it is leased out). This effectively removes the ‘forfeit clause’ that developers enforce when payment schedules are not met.
Not just that, the developer will also work out ways to get a grip on the payment situation. If the property has been rented out, all cheques collected from the tenant will be handed over “without delay”.
The developer will take over the responsibility of the property as soon as a payment default happens. It is then entitled to use any amount collected from the tenant to settle any late payment charges due under the SPA (sale and purchase agreement), any outstanding service fees, any payment to the authorities or utilities service providers.
And then from what’s left, contributions will be made to the purchase price of the property.
This way, the property owner will have more time available to get on track on the payments. The move comes as developers in Dubai put in place options if there were sudden increases in defaults.
“Developer incentives that are now being offered reflect their intent in resolving payment and liquidity issues being faced by end users/investors,” said Sameer Lakhani, Managing Director at Global Capital Partners. “The removal of the clause in some cases is a step that is likely to be emulated by developers big and small in the coming months as the real estate market seeks a post-Covid-19 way back.”
So far, there are no reports of a major increase on property-related purchase installments. Most of the big developers say that the majority of payments due to them in the first six months have been collected, and that talks are on those where the buyers are asking for deferment.
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