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Dubai may seize properties from defaulters
The Dubai Land Department may begin seizing off-plan properties whose owners are in default.
The authority has started notifying investors who have defaulted that if they fail to make their outstanding payments within two weeks that 40 per cent of any money they have paid so far will be confiscated, and the properties will be sold at auction.
The confiscated money, along with any profits from the auctions, will be handed over to the developers. The rule applies to projects that are 80 per cent or more complete.
The move, according to Mohammed Sultan Thani, the department’s assistant director general, is intended to spur the completion of unfinished projects. “The idea is to see what we can do before the property is cancelled,” he said.
During the property boom, many developers depended on the off-plan model, whereby a property is sold before building work starts to provide finance for construction. Many analysts say the model fuels speculative buying and inflates prices.