Ajman Tightens Realty NormsWednesday, September 15, 2010
The Ajman Real Estate Regulatory Agency (Arra) has been working overtime to restore normality in the emirate's beleaguered property market. On the heels of implementing regulations for developers,which require registration and an escrow account, Arra hasnow formulated terms and conditions that are required to terminate a sales and purchase agreement (SPA), when either the developer or the investor violates contractual obligations. As per the provisions of Emiri Decree No 8 of 2008, "the developer is obliged to ensure that instalment payments of the purchase price of any unit shall be consistent with the progress achieved in the construction of the relevant investment building. Such construction should be in accordance with the execution programme submitted by the developer to the Agency. The Agency shall have the right to take any measures as it may deem appropriate to ensure developer compliance." Buyers of off-plan properties in Ajman can resist requests for additional payment from the developer in the absence of physical progress on the development site.
Personnel from Arra's technical department will monitor construction progress of all the registered projects. "As long as construction work in an investment building is in progress, the project is classified as ‘going ahead',' explains Omar Al Barguthi, Arra director-general. Developers are often accused of misusing the ‘Force Majeure' clause to further construction delay. While reviewing investors' defences against developers' cancellation claims, Arra will also look into the latter's financial back-up, construction milestones, their completed projects and trust account deposits. "However, Arra willtake into consideration the human aspects under the current circumstances," notesan Arra statement. The amount of the purchase price to be retained by the developer in case of SPA termination will be as perthe contractual agreement, clarifies Arra. "Developers cannot resort to any unilateral action against defaulting investors in Ajman without Arra's prior written approval," observes Al Barguthi.Source: Gulf News