Advantages of Investment in Real Estate: Investing in properties has been one of the favorite activities of businesses men and individuals. Investment in real estate is always regarded as long term investment and less risky. However, investing in properties can be risky if the individual don’t have proper knowledge about real estate and market. It also requires sound understanding of finances, investment and laws regarding the real estate. There are many benefits of investing in real estate; like
- Full Control
- Fewer Risks
- Cash Flow
- Tax Benefits/Deductions
- Hedge against Inflation
Importance of Deposit while Renting & Buying Property
It is very important for buyers and landlords to understand the laws regarding deposit when they are buying or renting out any property.
Deposit for Buying a Real Estate: To reserve property (Apartment, Villa, Commercial Unit or House) the buyer pays the certain amount to developer to secure the deal. For this deposit there is no actual contract and buyer is provided receipt against the deposit amount. It is highly advisable to seek legal assistance from Rental Dispute Lawyers in Dubai, UAE to make the process smooth.
Security Deposit When Renting a Property: This security deposit is one-time refundable sum of money that landlord collects as a security from tenant to make sure that person who occupies the property returns without any damage and all utility bills paid. When the tenant leaves the place, any damaged caused by tenant is deducted from the security and remaining about is returned. It is suggested for landlord to consult with Rental Dispute Lawyer in Dubai to know his rights regarding security deposit.
Advance and Deposit are not the same: The advance is basically the prepaid amount paid like the tenant pays at the starting of the month as rent. Deposit is paid as a security to make sure that the buyer is interested in the deal.
Legality of a Contract
To secure the rights of tenants, developers, buyers, constructor, landlords, and all other stakeholders there are established property laws. Make sure to draft a contract through legal property expert lawyers in Dubai, UAE to secure your rights.
It is legally allowed to for a landlord to hold some amount as a security deposit from a tenant. The deposit must be paid back as soon the tenant evacuates the property.
When Buying a Real Estate
The security is deposited for a future project. This deposit is taken as a security to secure the deal and buyer is provided with receipt. The amount is usually non-refundable if in case the buyer doesn’t complete the deal. The contract also mentions the details that how and when remaining payments will be made. According to laws of UAE, for the UAE national amount can be 10% of total amount and 50% of total amount for buyer outside the UAE.
Refunding a Deposit
There is no fixed policy for refunding a deposit. It depends on type of contract and circumstances.
If Developer Fails to Deliver
Under the laws of real estate in Dubai, UAE a developer is supposed to refund all the payments including deposits. This will be applicable when Real Estate Regulatory Authority (RERA) cancels the project as result of irregularities. When the construction is canceled due to reasons which are out of control of developer, the developer is subjected to return the amount and will deduct 30% of the original amount. Developer in this case can also cancel the agreement and make remaining payment within 60 days of resale of property.
If Buyer fails to follow contract
If in case the buyer fails to pay the amount on time, they must first discuss it with developer to agree on some settlement plan. If this fails then the developer has the right to report the case to Dubai Land Department (DLD) who will notify the buyer to pay the dues. In case if buyer fails to pay the amount developer has the right to cancel the agreement and claim 40% of the total contract amount and pay the rest amount to a buyer in one-year time after termination of contract. If the developer decides to sell the property, they must make the payments within 60 days of sale.
In case if the buyer has completed 80% of the project then the developer can sell the property and deduct remaining amount. Developer has the right to contact DLD to auction the property.
The tenant is supposed to take care of the property and must not cause any damage to the property. A tenant is supposed to inform landlord 90 days before leaving the place and must clear all the utilities bills. After clearance landlord must refund the security to tenant. Landlord can take legal action if tenant do something against contract.
Rental Dispute Lawyers Dubai
In case you require any legal facilitation contact our Rental Dispute Lawyers in Dubai. We provide you with the best legal advice no matter you are buyer, developer, tenant or anyone who thinks their legal rights have been obscured.