Investors who see it as favorable to the developer, and real estate developers advocate a formula that satisfies everyone

Real estate sales contracts .. are required for "unification" and "Arabization" and the approval of law firms for their drafting

  • Requests that the contracts include a clause of the rights of the investor towards the developer.


  • The unified contract reflects positively on the real estate sector.

    Photography: Patrick Castillo


Real estate developers emphasized that the unification of real estate sales contracts is one of the factors that move the market, and it will have a great positive impact, in addition to its importance in protecting the rights of the investor, and establishing a balanced equation of rights and duties, in a way that guarantees an attractive environment for investment.

They stressed to "Emirates Today" on the necessity of an intense effort by the regulatory authorities to reach a unified formula that satisfies all parties, proposing the Arabization of those contracts, and writing them at law firms accredited by the Land and Property Department.

Real estate investors had told Emirates Today that sales contracts in the market, in their current form, tend to favor the real estate developer and are characterized by the abundance of clauses and their complexity.

They explained that there is nothing in those contracts that obliges the real estate developer to deliver, and there is no financial penalty for the delay in delivering the real estate unit.

Investor Notes

In detail, the investor, Munira A., said that she had bought an apartment from a real estate developer, but had not yet received it, although more than 18 months had passed since the date of receipt.

She added that she was surprised that there is nothing in the contract that obliges the developer to deliver, and that there is no financial penalty for late delivery, demanding the intervention of the Land and Property Department, considering writing a sale contract according to the whims of the real estate developer is not permissible.

In turn, investor Muhammad Jaber said that he had read contracts for real estate developers, with the aim of buying a housing unit, but he found that there are contentious points that could raise a conflict in the future with the developer, including what is related to the delivery dates of the real estate unit, maintenance fees, and how to calculate them, considering that These contracts are drawn up according to the interest of the real estate developer.

The investor, Muhammad Daoud, agreed that he intended to invest in the real estate sector, and signed an initial contract with a real estate development company, but he did not complete the purchase process, due to the large number of items, their complexity, and their tendency to benefit the developer.

In the same context, an investor in a real estate project «MA» said that he had bought a housing unit in a large real estate project, but he had defaulted in payment, so the company insisted on withholding all financial payments, and a dispute arose that lasted more than a year, until a solution was found. He decides to get a portion of what he paid.

He pointed out that there are big differences between real estate development companies regarding this clause in the contracts, as companies return the amount to the buyer with varying rates starting from 10%, while other companies insist on reserving the full amount paid, although that is an order. Completely unfair to the buyer, who may experience financial hardship that prevents him from continuing with the contract.

For his part, the SA investor said that he had signed a contract to buy a housing unit in a real estate project. However, despite the company’s announcement that the units would be delivered on a specific date, the implementation was postponed several times, and for years, and when he demanded to recover his money, the company refused that completely. , Without any compensation.

He confirmed that he had filed a case against the company, which has been under consideration before the courts for more than a year and a half.

Standardization of contracts

For his part, Chairman of the Board of Directors of "W Capital Real Estate Brokerage Company", Walid Al-Zarouni, said that unifying real estate sales contracts is one of the factors that move the real estate market, and it will have a significant positive impact, provided that the contract clearly states the rights of the real estate developer towards the investor.

He added: “The contract must stipulate that if the real estate developer does not abide by the specified delivery date, he will have to pay fines to the investor, determined by a certain percentage of the property’s price, or be compensated according to the estimated rental value of the property, according to the area in which he is constructing. In (Dubai Silicon Oasis), for example, and the rental value of a (studio) apartment in this area is 30 thousand dirhams, distributed over 12 months, so every month of delay in delivery obliges the real estate developer to pay the value of the rental allowance to the investor.

He continued: «The contracts must include a clause of the rights of the investor towards the developer, meaning that the investor has the right to delay the payment of financial payments for a period of 30 days, and in the event that this period is exceeded, fines shall be applied to him.

Al-Zarouni also stressed the importance of mentioning in the contract, clearly, the annual service fees.

He said, "If the amount is not specified, then the value can be determined according to the square foot (from 10 dirhams to 12 dirhams for a square foot, for example)."

Al-Zarouni demanded that the contracts be shortened in one form, instead of the many pages of several parties, explaining that it is possible to launch an electronic application that includes all the steps, as is the case in implementing the “Ejari” system.

Rights protection

In turn, the Vice President of the International Union of Arab Realtors, Dr. Mahmoud Al-Burai, stressed the importance of unifying real estate contracts to protect the rights of the investor, and establishing a balanced equation of rights and duties, in a way that guarantees an attractive environment for investment.

He said, "Contracts are currently drawn up by real estate developers in a way that guarantees their interests, which generates a kind of low confidence between the investor and the real estate developer, and makes the standardization of articles in contracts important at this time."

He continued: “Looking at the contract standardization model in the rental sector and its positive effects, we find that the matter is not difficult, and it can be applied in“ off-plan sales, ”and if it is implemented, it will raise confidence in the market, stressing that the problem is also related to a lack of awareness of rights. Many investors sign without reading the terms of the contracts.

Standardized formula

For his part, CEO of "Standard Real Estate Company", Abdul Karim Al-Mulla, said that the real estate sector requires the standardization of sales and purchase contracts, which requires intense effort by the regulatory authorities to reach a unified formula that satisfies all parties, pointing out that not unifying them drives some Investors to abandon the idea of ​​buying, after he had intended to invest in the sector.

He stressed that the many details in the terms of the contract worried many investors, especially since most of them do not know much about the legislation regulating the sale and purchase contracts, calling on the authorities to simplify these contracts into fewer clauses, and in an understandable form and language.

He explained that the terms often tend to favor the real estate developer.

Terms of compliance

In the same context, the general manager of the "Royal Liwan Real Estate Company", Muhammad Hareb, said that the real estate market needs to standardize and Arabize contracts, given that some of them are issued in English language only, in addition to the fact that the length of the contract also causes a kind of mistrust between the developer. Real estate and investor, especially since these contracts are more in the interest of the developer and not the investor.

Hareb pointed to the terms of compliance in contracts, such as canceling the contract, not refunding the amounts paid, or imposing exaggerated fines, and ultimately lead to the investor losing his money or property.

Hareb pointed to the penal conditions related to delivery in the event that the developer delayed delivery, or the investor delayed payment, stressing that the lack of clarity of these terms causes many problems.

He stressed the need for these contracts to be written at law firms accredited by the Land Department, so that there is a list of offices to be dealt with.

Federal contract

In addition, Fouad Jassem, director of "Manarat Al-Shati Real Estate Company", said that standardizing contracts and reducing the margin for companies to interfere in setting their own conditions that protect their interests only are very important matters that reduce any potential disputes between investors and real estate companies in the markets later.

Jassim pointed out the possibility that there are companies that put into place items commensurate with the variables of their project or market conditions, but it is natural for there to be a unified contract in its basic clauses to protect the rights of both parties.

He believed that the idea of ​​creating a unified contract at the federal level could be difficult now, given the different circumstances of each emirate, and the great diversity in the real estate projects offered, but the existence of a unified contract within each emirate is an important and beneficial matter for the market.

Jassim stressed that the existence of a unified contract between investors and companies reflects positively on the real estate sector and the available investment opportunities in it, as it raises the confidence of investors, especially with the state’s excellence in the development of its real estate investment sectors, and the sector avoids any potential future conflicts.

Timing is convenient

The real estate broker, Magdy Abdel Aziz, said that the trend to unify real estate contracts is one of the important matters that have many benefits and positive repercussions on the sector, especially during the current period, and in light of the conditions of the Corona pandemic, which is witnessing competition between companies in offering offers and incentives to attract investors, Consequently, the sector is witnessing a demand for buying, and benefiting from the offered offers, which makes the current timing the most appropriate for owning a real estate unit.

It was agreed that the standardization of real estate contracts reduces the chances of conflicts between investors and real estate companies, and provides an equal protection umbrella, a balance between the interests of both parties, without prejudice to the right of a particular party, especially since some investors do not hesitate to read the terms and conditions of the contracts before signing them.

Contracts are drawn up by real estate developers to guarantee their interests.

Too many details worry a lot of investors and the terms often favor the developer.

Al-Awar: Inclusion of companies in "sanctions"

Masoud Al-Awar.


The Chairman and CEO of Medalion Associates Real Estate Company, Masoud Al-Awar, said that many sales contracts in the real estate sector are not fair, and are biased towards real estate companies, especially since the companies define their terms and release them, and therefore, they include many items that may It ignores the rights of buyers, while exaggerating the rights of real estate companies.

He stressed that the standardization of contracts in the real estate sector is a very positive issue, and the sector is active, and it encourages buyers and investors to buy, especially in the long term, pointing to some things that must be unified for the occurrence of homogeneity and integration in the sector, while leaving some matters to be determined by each company according to its conditions and the nature of the project.

Al-Awar called for unifying the penalties regulations and laws in sales contracts, to include development companies, explaining that the sanctions should not only include buyers and investors, as happens in many contracts, but also development companies in cases, such as: failure to deliver the unit on the date specified in the contract, For example, they should be required to pay the owner a monthly sum.

He stressed that most of the contracts do not provide for any penalties for companies in this case, while they are filled with penalties in the event that the buyer breaches any clause in the contract.

He also called for unifying the delay fines for real estate companies that delay the delivery of real estate units, while allowing developers to have delays in only one project, for example, to support confidence in the sector.

He stressed that there is a need to unify what is related to the method of recovering money for those who buy a land or real estate unit and stop paying the rest of the price, and complete the payments, so that a certain percentage of the amount paid is deducted, pointing out that companies previously insisted on deducting the entire amount from the buyer, which is what It represents a great injustice to him, in addition to determining the penalties in the event that the buyer is late in paying some payments, so that a reasonable and specific percentage is deducted.

He pointed out that the laws of some European markets, such as Britain, stipulate that sales contracts should not be signed until after they are documented by a lawyer, in order to avoid any legal problems, in addition to clarifying the rights and duties of each party, stressing that this reduces the use of the courts.

Hammad: Unfair contracts that harm sales

Ikrami Hammad.


The Chairman of the Board of Directors of "Future 23" Real Estate Company, Ikrami Hammad, said that many sales contracts in the real estate sector are unfair to the buyer, and include many duties and obligations on him, in exchange for a lot of rights for real estate companies.

He added that some sales of land and real estate units do not take place in the final moments, as a result of buyers' retreat from completing the purchase after reviewing the contracts, and discovering that they are unfair, as they do not enable the buyer to take any action in the event of a dispute with the real estate company.

Hammad mentioned that one of the most important things that harm sales operations: Not stipulating in most contracts, especially those of major real estate companies, any procedures or delayed fines for companies in cases of delayed project implementation and delayed receipt of the real estate unit, especially for "off-plan sales". While the contracts provide for heavy fines for the buyer in the event of late payments.

He added that the buyer does not even have the right to complain against the real estate company in the event of a delay in delivery, or a change in the specifications of some projects, calling for the unification of sales contracts in the real estate sector, so that 80% of them are unified, while leaving 20% ​​for companies, for example, to define items that may be They are variable from one company to another.

Muslim: A neutral government body to draw up indicative contracts

Rida Muslim.


The real estate expert, General Manager of the "Truth" Economic Consulting Company, Reda Muslim, stressed the need for a neutral government agency to undertake the development of pilot contracts that take into account the existing legislation and laws in the country, and the balance between the rights and obligations of each party.

He pointed out that many of the current contracts are unfair, because they exaggerate the obligations placed on the buyer, while they are lenient in the obligations of real estate companies.

Muslim believed that the government agency’s status of contracts supports the real estate sector and activates it, because it supports confidence from both parties, especially the buyer, and reduces resorting to the judiciary to resolve disputes.

Muslim demanded the existence of specific procedures and delay penalties in the event of breaching the main matters in contracts, such as delivery dates and payments, pointing out that many contracts oblige the buyer to pay fines in the event of delaying the payment of installments, while the companies are not obligated to any fines or compensation to the buyer in the event of delay in delivery. .

Muslim considered that the existence of 100% standardized contracts is a difficult process, given the different legislation and fees in each emirate, and the existence of differences between the real estate companies themselves, but there is a need to unify them in basic matters that may lead to conflicts and weaken confidence in the sector.

He called on buyers to read the contracts well, and try to change the items that are not satisfactory to them, before signing, indicating that in cases of a dispute between the two parties, the blame falls on the buyer, because he agreed to unfair terms, and did not try to change them before signing.

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