What are the provisions that I should consider in the sales contract?

The developer should consider the following:

Provisions on Breach of Contract

Where a buyer commits a breach of the sales contract and does not remedy such breach within 90 days after being notified by the developer, then the developer may terminate the sales contract and retain the 10% deposit.

Defects and Maintenance

Under the RERA Law, the developer is responsible for maintenance and management of the units for 2 years following completion. The developer is allowed to charge an administration fee for this amount to 5% of the actual costs of maintenance and management.

The developer is responsible for structural defects in the common property of a development for 10 years following completion.

The developer is responsible for the repair and replacement of defective fixtures and fittings in the common property for at least one year following completion. A longer period can be agreed between the parties.

Disposal by a Buyer

Where a buyer wishes to sell the unit before the handover date, he may do so provided that he pays the developer an administration fee of 1% of the purchase price up to a maximum of 500 BD.

The buyer shall obtain the developer's consent to such a sale.

Handover

Where the developer fails to hand over the unit within 6 months from the [target hand over date specified in the contract], the buyer may provide 90 days’ written notice to the developer requiring him to hand over the unit. Where the developer fails to do so, the buyer has the right to terminate the sales contract and shall be entitled to a refund of all money he has paid to the developer under the sales contract.

Inspection by Buyer

The buyer is entitled to inspect the unit prior to handover.

Change in Design

The developer is not permitted to alter the structural and engineering designs and specifications of the unit except where the change is immaterial in view of the engineering and technical considerations. The application to change the documents must include evidence that the change is not material, however, material changes may be made in an emergency and with the consent of RERA. The buyer may have the right to compensation or reduction in the purchase price for any reduction in the unit area, value or benefit.

Deposit and Reservation Agreement

On the signing of the sale contract, the buyer shall pay a deposit of 10%. Any payment made under a reservation agreement shall be counted towards the deposit.