x Abu Dhabi, UAETuesday 25 July 2017

Consumers call for more information on home projects

The law firm Hadef & Partners says that existing consumer protection laws for off-plan homes are not working well enough and a warning statement could be required to make investors aware of the risks.

In a wide-ranging report into the property market in Dubai published this week, law firm Hadef & Partners says that existing consumer protection laws for off plan homes are not working well enough and a warning statement could be required to make investors aware of the risks.

The report, which canvassed views from more than 8,500 people in the region, found that 79 per cent of those questioned thought that companies developing property off plan should be made to disclose more information than would be required under the existing law or the proposed Investor Protection law.

Respondents said developers should disclose the amount of capital injected into the project company, shareholder loans, the amount of finance committed, the identity of the financier and the costs required to complete the project.

"The Escrow Law and its regulation, at present, appears to have been deficient in the liquidity and financial viability tests that are applied to developers before they launch off plan projects," said the report author and partner Michael Lunjevich.

"If this is to continue, and regulators are not going to oblige developers to open their books ... then regulators should consider whether to make it mandatory for the risks to be made clear to investors."

The survey said 56 per cent of respondents believe there is inadequate enforcement of property laws.

lbarnard@thenational.ae