ABU DHABI, April 25 (Xinhua) -- Authorities in Dubai, a member of the seven-strong federation United Arab Emirates (UAE) may seize off-plan properties if owners are in default on payments, a local English daily reported Sunday.
Investors who fail to make outstanding payments within two weeks could lose their property, Mohammed Sultan Thani, assistant director general of the Dubai Land Department, was quoted as saying by The National.
The rule, which applies to properties that are more than 80 percent complete, will help several delayed and unfinished projects in Dubai reach completion, he said.
"The idea is to see what we can do before the property is cancelled," Thani said. "Very few people will opt for not completing payments if the building is almost ready."
Forty percent of any money paid so far will be confiscated and the property will be sold at auction with the profits going to the developer, according to The National.
During the property boom years, many developers depended on the off-plan model, which analysts say fuels speculative buying and inflates prices since the property is sold before building work starts to provide finance for construction, the paper said.
As the global financial crisis hit the region and property prices fell more than 50 percent in Dubai, many buyers reportedly stopped paying their monthly installments on properties that had fallen sharply in value.
Source: Xinhuanews
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