Finalizing a property management company has never been a cakewalk. It is indeed a rigorous and careful process that requires evaluation of various important factors such as – cost, ROI, expertise, and above all capability and track record of the firm in handing over the keys to the investors on time. In the last few years, there has been an exponential increase in the number of new home handovers in the UAE. This has intensified the competition, with more companies offering handover services. Thus, it becomes more crucial than ever before to critically analyze their offerings and evaluate their strategy to mitigate any sort of property handover delays before selecting the right one.
Kaizen AMS ensures that you don’t regret your decision. We possess almost three-decades of experience in executing a smooth and swift handover process with complete protection of the property and better returns. Ensuring the property gets its best care and stays in good shape always remains the top agenda of our property managers.
What Makes the Handover Process Challenging?
The handover is quite simple and straightforward. However, in many cases, the momentous process of property handover becomes a headache for investors. The key villains are – ineffective management, limited support, and poor customer service offered by the developers. The complex procedures and hidden charges further make the handover norms more difficult to understand for the investors. Several property developers will simply send out the completion notice and demand investors for handover within a month or levy hefty risk penalties. This causes innumerable stress to the overseas investors and to those who have waited for years for the completion due to repeated delays in the construction process. The developers must have a well-defined process in place to minimize the challenges for the investors and avoid any delays in the construction process.
Top Reasons for the Delay:
The key factors responsible for the delay in the handover process are as follows:
Short-term Completion Notice
Once the building construction is completed and achieved the required certification, investors receive a 30-day notice of completion from the developer. During this period, investors are expected to clear all outstanding dues on the property price and other statutory fees to take possession of the unit as the new owners. Several other obligations are also required to be completed before the keys of the property are handed over. The process above looks alluring however it comes with a series of challenges for many investors. It is very frustrating for many investors who have waited for ages to reach this point and are now provided with merely 30 days’ time to stump up the final payments. It is not always easy for the overseas investors to make payments within this short period and also to come to Dubai to complete these final handover formalities.
Pending Final Payments and Paperwork:
Along with the completion notice from the developer, the investor also receives a handover pack with key details on the completion date and the account statement. The account statement reflects the total amount paid to date as well as the amount due to take possession of the property. The percentage of final payment varies from developer to developer, however, the closing cost remains standard throughout.
In most cases, the major cause of the delay in the handover process is the pending final payments and the paperwork from the investor’s side. To avoid handover delays, the investor should have paid all the required fees before the handover date of the project, and have submitted the relevant documents to the developer.
Cancellation of the Project by RERA:
One of the biggest reasons for the delay in the handover process in Dubai is the cancellation of the project by the Real Estate Regulatory Authority (RERA). The projects are canceled by RERA when the land is affected by planning or re-planning projects. In that case, the projects are transferred to the liquidation committee and then to the Dubai Real Estate Court, which handles the settlement of rights and liquidation to purchasers. It is always advisable to check the status of the project timely on the Dubai Land Department website under the tab ‘Project Status’.
This stage requires the investor to clear the final balance due on the purchase price of the property, as per the terms and conditions of the sales contract with the developer. Penalties are levied on the account and in case of non-payment by the investor, the developer has a right to apply to the Dubai Land Department for the termination of the unit, depending on the breach of the sales agreement with the investor. It is always advisable to make the payment within the deadline to not risk losing the unit.
Ways to Avoid Delays in the Handover Process:
There are several ways the investors and buyers can implement to minimize the risk of delayed property project handover.
Conduct Proper Research about the Developer:
It is pivotal to conduct an in-depth and thorough research about the developer before planning to purchase the property. Potential Investors must research the developer’s track record of completing projects and handovers as per schedule. It is certainly wise to talk to other investors and visit the project site to get the real picture of the project.
Check for the Developer’s Escrow Account:
As per Law (8) of 2007, it is mandatory for all real estate developers in UAE to have an Escrow Account which is registered with Dubai Land Department (DLD) to sell off-plan units. The investor must ensure that the developer has an Escrow account by visiting the DLD website and searching for the relevant project. All the payments made by the investor to the developer must be deposited in the registered Escrow account.
Check for Necessary Permits:
Before starting dealing with the developer, an investor must ensure that the developer possesses all the requisite permits and approvals from Dubai Land Department to market and sell off-plan properties.
Thoroughly Review the Clauses in the Contract
The potential investor must thoroughly review all the clauses stated in the Sales & Purchase Agreement to protect his interest and rights under any unforeseen circumstances. Before signing the contract, it is important to review whether the developer has mentioned all the provisions and plans to manage any kind of handover delay in the contract.
Check for RERA’s Registration:
Potential investors must check whether the project and the developer are registered with the Real Estate Regulatory Agency (RERA) before investing. Mostly the developers which are registered with RERA have a great track record of completing the project handover on time. This information is readily available on the Dubai Land Department website.
The Secret Behind Swift Handover Process at Kaizen
Kaizen recruits highly professional property inspection experts to carry out all the tasks associated with the handover process. They are highly trained in performing comprehensive checks of each property. Our property inspection experts offer prior notice to the developers on the expected completion date of the project. Post that, Kaizen’s handover team performs rigorous site visits at regular intervals subject to the first notice from the developer on the completion of the project. Later, our Developer & handover team collect information details of the project, client details, DEWA premise numbers & financial reports, and issue invoices to all clients with an outstanding balance. The team is also responsible for preparing the first communication with all clients and notifying them of the Building Completion Certificate (BCC) date. They also provide the expected handover date along with Service Oriented Architecture (SOA). The Community and Owner’s association team is responsible for preparing clients’ service charge invoices and delivering them at the BCC date. Post that, guidelines are provided within a 30-day notice, and invoices are prepared and sent to clients. Subjected to testing and commissioning completion, the developers deactivate all units’ DEWA accounts. Lastly,, the handover team collects unit keys, access cards, remotes, etc. This process is not only systematic but very cost-effective too and also ensures that the handover process with Kaizen becomes a ‘memory to cherish’ for our investors.