As part of our ongoing Ask-a-lawyer series, we have asked <b>Mark Nierada</b> , an attorney at James Berry & Associates in Dubai, to answer a few questions put forth by Crane Country readers. If you've got questions about the property market, email them to cranecountry@thenational.ae. 1) If the developer --Deyaar -- has officially put on hold a project - MIRAR Residences -- where I have invested, what is my right as an investor? 2) I read your article in The National regarding the sliding scale for defaulters. I am a non-resident investor living in Sweden. I have invested in Calyuton residency, Business Bay, and the developer is Deyaar. Is there a law which governs payment plan linked to construction progress? Can you please help me with details of such a law? I have paid 33 per cent for this investment and I have to pay 10 per cent more now, but I see there has not been much construction progress. Mr Nireda's responses after the jump. <b>Question:</b> If the developer --Deyaar -- has officially put on hold a project - MIRAR Residences -- where I have invested, what is my right as an investor? <b>Answer:</b> First, let me deal with the specific situation you find yourself in with this particular developer before moving on to more general advice. Deyaar tell me that construction has not commenced but it has not been confirmed yet whether the project will be cancelled. Investors are being given an option to transfer their investment to another Deyaar project that is either completed or nearing completion. My understanding is that investors taking this option may qualify for a discount. By talking to the developer it may be possible to explore a negotiated settlement. On a more general legal note, what are investor's rights where a project has not commenced? Under Law No 8, Article 17 (b) a developer can be removed from RERA's approved developer list "if he does not commence construction within 6 months of the date he was granted approval to sell off-plan without an acceptable excuse". What amounts to an acceptable excuse is unclear. Alongside this, one has to consider the recent Law No 9 of 2009 which states "in case of projects where the construction has not commenced for reasons beyond the Developer's control, without any negligence or omission on its part, the Developer may revoke the contract and deduct up to 30% of the total amounts paid by the purchaser". Law No 9 also permits RERA to initiate the preparation of what is referred to as a "grounded (sic) report" to assess the viability of a project that has not commenced. If RERA deem the project moribund it can cancel the project and order the return of funds paid to the escrow account. It has been widely reported that RERA will shortly be cancelling some 27 projects and the details will be published later this month. That list should make for interesting reading. Finally, always check the detail of your contract. I have seen contracts that stipulate an exit strategy where there is no prospect of achieving a long-stop completion date. Please bear in mind that any legal right, whether granted by statute or in a contract is at best an actionable right i.e. you still have to enforce those rights and that may involve a trip to RERA and/or the Property Court, a great deal of tenacity and a financial commitment for court and lawyer's fees. Law No 9 is retrospective, however, and your contract needs to be read and assessed in light of this. You may need a lawyer to assist you with this. <b>Question: </b> I read your article in The National regarding the sliding scale for defaulters. I am a non-resident investor living in Sweden. I have invested in Calyuton residency, Business bay, and the developer is Deyaar. Is there a law which governs payment plan linked to construction progress? Can you please help me with details of such a law? I have paid 33 per cent for this investment and I have to pay 10 per cent more now, but I see there has not been much construction progress. <b>Answer:</b> Deyaar advise that this project is 22 per cent structurally complete. At present there are no rules and regulations to enable one to accurately assess that percentage or construction milestone reached but it appears that this issue will be addressed in new legislation that is in the pipeline. This new legislation will also lay down requirements about how developers acquire, fund, construct and sell off-plan developments. Some of this is already filtering through. For example, in February the Escrow Department at RERA issued a notice stating that developers may not collect more than 30 per cent of the value of a sold unit where construction has not commenced and can only collect further payments i.e. beyond 30 per cent where the project has reached a similar construction milestone, for example, a further 10 per cent where the project is 40 per cent completed. The provenance and effect of this notice is unclear but it appears - based on what RERA tell me - that this is being applied by the Property Court. It would appear, therefore, that Deyaar need to catch up with your investment before they ask you for further payments. I would advise you to contact Deyaar and raise this issue with them, referring to the notice and seeking their confirmation that you may now defer the next payment until the project has a advanced beyond 33 per cent completion. A developer can no longer unilaterally terminate a contract and must obtain approval from RERA. This provides an opportunity for mediation should the developer-investor relationship deteriorate.