What happens if the developer makes changes to the design and floorplan?
We bought an off-plan property three years ago. Recently we got to see the show villa and discovered that there were changes made to the floor plan without our consent. There are a few other differences between what is promised in the brochure and on the website against what is seen in the show villa. Is this allowed? And what can be done about it?
It is important to check whether the sale agreement provides that the developer may make changes to the design and floor plan. However, this would only apply to fairly minor changes as the law grants the purchaser the right to apply to court for the termination of the contract if the developer makes material changes to the specifications of the property as set out in the agreement (and the advertising material). It is not easy to define what “materially changes” means. If the value of the property would be significantly less due to the changes, or the purchaser can show that he would not have purchased the property with the amended floorplan, it is likely that the change would qualify as material.
If the changes amount to the reduction in size of the property once built, the law makes specific provision for the consequences thereof. Article 13 (3) of Executive Council Decree 6 of 2010 provides that “the developer must indemnify the purchaser if the area of the real property unit is less than the agreed area by more than 5 per cent of the net area of such unit”.
In a case heard by the Dubai Court of Appeal, it was determined that if the unit is 6 per cent smaller, the developer is only obliged to pay compensation of 1 per cent. Developers may include stipulate in a sale agreement that they may amend the size of the unit entirely in their own discretion, limiting the purchaser’s right of recourse.
Although the Real Estate Regulatory Agency (Rera) does regulate the advertising of off-plan units, there is no provision relating to the advertised sizes of units.
It is important to check whether the sale agreement provides that the developer may make changes to the design and floor plan. However, this would only apply to fairly minor changes as the law grants the purchaser the right to apply to court for the termination of the contract if the developer makes material changes to the specifications of the property as set out in the agreement (and the advertising material). It is not easy to define what “materially changes” means. If the value of the property would be significantly less due to the changes, or the purchaser can show that he would not have purchased the property with the amended floorplan, it is likely that the change would qualify as material.
If the changes amount to the reduction in size of the property once built, the law makes specific provision for the consequences thereof. Article 13 (3) of Executive Council Decree 6 of 2010 provides that “the developer must indemnify the purchaser if the area of the real property unit is less than the agreed area by more than 5 per cent of the net area of such unit”.
In a case heard by the Dubai Court of Appeal, it was determined that if the unit is 6 per cent smaller, the developer is only obliged to pay compensation of 1 per cent. Developers may include stipulate in a sale agreement that they may amend the size of the unit entirely in their own discretion, limiting the purchaser’s right of recourse.
Although the Real Estate Regulatory Agency (Rera) does regulate the advertising of off-plan units, there is no provision relating to the advertised sizes of units.
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