[Music] the problem in this regard is that I see a lot of I get a lot of challenges when it comes to my name is Ahmed Elnaggar and this is Monday Legal welcome back to a new episode a special one of Monday legal today we have uh not one guest we have two we have Veronika Chastukhina a lawyer from anaran partners and we have Mr Mohamed Ibrahim Abdelrehiem who is a lawyer from Ibrahim and partners thank you very much both of you thank you for inviting us um today our uh special episode is mainly focused on real estate Veronica uh in her experience she had uh a big experience working as in-house lawyer for one of the biggest reate Brokers uh in the UAE Muhammad as a instigator a fighter in court most of the time uh and he handled a quite a big amount of legal disputes that relates to uh real estate and let me start with Muhammad thank you very much for coming today and uh can you please tell us the latest update in regards to uh the real estate transactions I understand that the Dubai land Department have made the decision to abolish the requirement of an nooc in re estate transactions can you give us an update about this well first of all thank you Ahmed for having me again at the uh very famous Monday legal uh actually the the new resolution that have been issued by the dld recently that all the market actually is discussing nowadays is that they made some kind of a distinction between when do the owners uh or the landlords of properties in the UAE if they are selling uh their property they need an nooc from the developer and when they don't need an nooc from the developer so the old situation was that if you have a property you whether it's uh uh under construction or handed over and finished if you're selling this property you need to get an NC from the developer before you sell it to any third party the what the dld has now made in order to ease up the process for the investors is that they made this distinction if it's handed over property and it's finished uh then the project is fully completed then you don't need an nooc from the developer and you can go straight away ahead with signing sale and purchase agreement and transferring the ownership without an nooc however if it's still under construction by any percentage even if it's 1 percentage then you still need to obtain an nooc from the developer for the sole purpose that this property might be for example under mortgage still there is a finance any payments to developer in terms of the payment terms between between you and the developer so you still need to get the developer permission before you sell your apartment thank you very much I I think what what was historically the the practice even for handed over properties and ready ones the uh the need to get the nooc uh from the developer was related to um the the fact that there is a still a continuous obligation of the landlords to pay the service charges and usually before the the owner committee regulations were uh were in place most of the servy charges was still collected by the developer what what's your opinion whose obligation was to um pay for the no's uh when when there is a a re estate transaction since you're coming from a company or you have a big experience with a company that was handling these transactions was it the buyer or the seller and the and the re estate transaction yeah normally uh from the practice it's always the seller who supposed to get the nooc but sometimes when it was off plan project not the ready to sell uh some of the sellers they don't have money to pay anymore so they were asking the buyer if they agree to actually pay the outstanding payment and pay for the nocc because basically they had no money at all on their account here in Dubai so they couldn't support any payments at all to the developer so so and it's actually it's actually a problem because we had a case already that involved somebody who agreed to that the buyer and they paid the the outstanding payment the last payment to the to the developer and then the seller just dropped off the case they waited until the form F expired and they sold the property to somebody else making different Pro a little like additional profit on it uh yes but also for me I think uh it's good that they actually change the law or the procedure of getting the nooc but still you can have a surprise on service charges as you said so you can buy the apartment which is already was I don't know used by the seller and maybe he didn't pay or she didn't pay the service charges for some time and it can be a big amount and then you need to talk to the company which is um controlling the building and then you need to prove that it was not you that you bought the apartment on this day this is your contract and you're not responsible by the for for the service charges and it's actually also not a very easy part yes I agree totally with this because in re estate transactions they usually don't even issue the nooc unless the existing landlord have a credit not just a up to date with the with the with the service charge payment they ask them to pay 3 months or 6 months in advance to make sure that the property is handed over to the new buyer to new landlord free of any liability and then there's always a compensation in the end of the of of this amount between the buyer and seller have you seen any cases that goes that went to court in this regard that there is a conflict between a buyer and seller because of service charge or nooc or something like that well to be honest this this is very recent we're talking about something that have been issued in the market for for like a week or so so this has not been tested yet I'm 100% sure but let's let's say if we look at it from a pure civil law perspective so the situation where you need to hand over an nooc to avoid all of these problems like mortgage service charges uh whatever need payments need to be maintenance for the property this nooc was in favor of the buyer before because the buyer makes sure with this nooc that there's nothing on this on this on this property and he's taking the property free of any charges free of any liabilities but now what the legislature has done which is the dld is that they put more risk on buyers so if you're a buyer you're buying a property fully handed over finished it's your obligation to do your due diligence you know in normal transactions if you're buying a a company you you don't go and tell the the owner of the company give me an just an NC a piece of paper that you don't have any liabilities and then you take over the company and all of a sudden you have cases before the courts you have judgments against the company you have debtors you know creditors you know what I mean this is a little bit different topic because uh you are we cannot compare somebody who is buying the company and a property some people are buying the property for 600,000 durhams yeah with mortgage and they some of them don't even speak English so it's kind of the brokers who supposed to help them or maybe more liability on the Brokers more liability on the buyers to do their check to do their due diligence because it's like like they say you snooze you lose so it's your liability this is a big topic when when we talk about real estate transactions a a lot of buyers a lot of investors in the market they do not do a proper due diligence on the deal and they rely 100% on their restate broker to do this due diligence however in my personal opinion me as an investor or as an end user who are coming to the market that is uh to to buy a property I need to start my due diligence process by checking the broker himself to checking the the company who is doing the re estate uh deal with me first this is part of the due diligence that I have to do and then afterwards I have to do my proper due diligence on the property itself so coming from a transactional uh side what can you advise for for Real Estate Investors to do when they are U approaching a deal what kind of due diligence they have to do on the brokerage firm and on the property itself in before they buy it okay I think first of all uh it's the most important thing from my experience as a Russians speaking lawyer had a lot of Russian clients and if you don't understand the language use any translation you can for the contracts for the offers for any documents Google translated it's very easy with the mobile phones we have right now so it's not a big problem then uh it's also very important to check the broker cards are they valid do actually is is this broker a real broker or is just some representative or a person who going to refer you to the broker company and just get the commission as a referral like through the referral agreement something like that which is also happening all the time and they're not Brokers yeah uh but then on your form F you have a name of some broker whom you never saw in your life just because it was a referral yeah to the company this is this is the first thing you need to understand whom you're working with translate all the agreements all the forms all the documents and then if you don't understand something you can always approach um a lawyer a consultant legal consultant somebody who has an experience in this or even ask the Brokers do they have a lawyer in the in their company just to talk to this person and see okay what's Pros what's cons do they understand this and that correctly I also went through the cases where a lot of buyers they didn't even read the contract they told me oh I was told that by uh for instance by the developer I need to sign it right now and they they don't they put them on under a lot of pressure I don't know why and I told them don't you don't no need to sign this or even the form F I said okay so I assisted few of them I said send me first uh the number for the form F so I can open it and I can read it I'll make screenshots for you I will flag things you need to understand then we'll talk more you don't need to sign it right now and they said no we need to sign it now I said no there's an end date in the form F yeah they always put them under pressure that if you don't sign now someone else will take the property yes exactly and it's just it's it's it's insane what's happening in the market because you're an investor why do you feel you're under this kind of pressure like if if this property got sold to someone else you have other properties yeah especially if this property is too valuable for you just as she said appoint a lawyer yeah especially if it's like 3 million exist you know right and what kind of uh what do you think Muhammad the kind of due diligence that they need to do on the property itself because we spoke about the due diligence that we need to do on the reate brokerage firm but on the property itself what kind of uh due diligence they need to do or uh even what do they need to check when they sign a deal even with the developer for Off plan property what are the terms that the buyers end users or investors should take care of well if if if if you're buying a a u let's let's make a clear distinction in here if you're buying uh let's say uh uh uh not directly from the from the developer like a secondary Market okay the the things that you need to check as as a due diligence on your on your side is much much more different than if you're buying from directly from the developer which is a proper developer well known so for example if it's a secondary Market first of all you need to check if this property actually belonged to this person or not I know like it it seems like a very B basic thing but believe me I'm coming from the dispute world and we see insane mistakes okay so you need to check if he actually owns this or not you need to see a title deed okay if the title deed has more than one name you need to check if the people on the title deed and I'm sorry to say this they are alive or not okay because we have seen cases where the title deed says two person one man and a woman one man and his wife for example and his wife passed away and there are legal heirs and you're not aware of this whether the man is can act as a proxy for the legal heirs or not you never check this and then you pay the money to him and then the legal heirs two three years later on they come in back against you with some kind of a case saying you misrepresented us you give all the money to our father we had the right at this time our father didn't have a proxy he was not the legal Heir for us for example due to any kind of let's say he was a drug addict or alcoholic or anything and the court had the legal air as our grandfather not our father so you you get surprised what you see in real life so you need to check who are the owners two if the owners are being represented by proxy like for example a real estate agent as she said you need to check that this real estate agent is actually real estate agent because if someone can can can actually screw you and he's not the the owner then the agent can easily tell you I'm the agent of this person if he has a proxy he need to check his POA okay all of this stuff comes together as identifying who are you buying from and then you can check the normal stuff if there is a mortgage on the apartment if there any Financial liability if if this has been is it is it rented if there is a continuous liability or not there's service charges any debts all of this stuff need to do so my short advice is that again get a lawyer if you're investing this amount of money seek legal help it's as simple as this um going back to the transactions I know very well the Dubai land department and the real estate regulatory agency have made it very easy for end users to be able to check and verify the documents I understand that through the Dubai land Department website you can verify the title deed if it's correct or not uh even there are some applications where you can go and verify the ROI even when when the Brokers are talking about uh uh uh amazing promised profit in rent on rental yields or or what you can sell this property afterwards and so on they tell you that this property is is is um is amazing and it's sold below Market you can actually check the transactions in the market and verify this information what can you advise uh or what sort of uh platforms that the government have made available for the public to check and verify three estate transactions okay so on dld platform you can actually go and uh find the information on the apartment which you are buying um you can put that but you need Title deed for that so you put the number of the title deed and the name of the person and then it says to you maybe it's blocked or there's something wrong that actually but there's other thing it's if it says it's it's blocked then you don't know why you can't know why it doesn't say it's it's just like one line but it's a red flag it's a red flag so uh also had this issue with the Brokers where I'm saying okay it says in the in the on this website that it's a blocked property and they say oh okay so what can we do I said ask the seller what's the issue because only the seller can tell you what's the issue and they're saying the seller doesn't know so then actually people were trying to sell such Apartments uh not via the form F but the old forms which you assign with your hands those forms and they're like yeah but we already had signed this form and I was like but this is not it's something which is not valid because who can prove that it was your signature there yeah nobody that's why you have an OTP and everything for the now for the form F so that and unfortunately I forgot the name of the other platform where you rest there no there is another platform I used it a few times it showed you um when was the like it's already apartment which you have like ready to sell and somebody used it before with the rent so you can check what was the previous rent who rented it and was the previous rent it's Dubai interact Dubai interact yes it is Dubai interact actually very comfortable but it's sometimes it's Hing you know you need to reload it again and again but it shows you exactly it doesn't show you the names who were renting the apartment but the prices and each which year it was rented and what was the price for this apartment that's of course a part of the due diligence that uh Real Estate Investors and and users should uh should try should there is a lot of information the government have invested a lot in in these platforms to make this uh information available for the public to uh to use one thing I would like to add on this as well so when I told you we have to draw this distinction if you're buying a second do Market property or under construction property directly from the developer I think it's a very very important that people understand that if you're buying directly from the developer and following your decision that you decided that okay you will buy you will invest this amount of money you know exactly the property you have to make sure that you sign AI okay after that AI is like the initial agreement with the developer that registered you as a buyer of this property okay you haven't signed the final contract you haven't completed the final payment because it's on on an installment plan but at least once you sign aodi okay you have the right as illegal uh uh buyer of this property uh in relation to anything regarding the terms and conditions of the SP so this AI as per the real estate law in here the period for signing AI is six months so if the developer doesn't actually initiate the signature within the first 6 months then then you are in the Red Zone there's something wrong with this developer okay because all the developer all the big developers all the well-known the established developers know this rule okay if after 60 days you didn't sign the AI then the the the sale and purchase agreement is not invoid so this is a very very very clear point the mind of all the developer so if the developer doesn't do this there's something wrong me the project was not yet registered project not not yet registered there's no approvals on the initial plan there approval on the aspro so it's kind of a very very big flag red flag telling you there's something wrong with this project so 60 days and one plus invalidate the agreement it's your right pull out go to another project you know what what I did in a few times we had the developer like this and they were asking people to pay the installments but there was no we call it AUD yeah you call it AI okay yeah in Russian World we call it AUD a so uh few of my clients like the clients from the previous company where I work to they stopped paying the installments and the developer was asking them you need to pay the installments this is the fine so surely uh I cannot send an email on from myself so I just prepared the email from the client to send out saying there is no a could sign so I I have full right not to pay any installments and I'm not going to pay any fine and they agreed to that 100% 100% very fight because first they say no and then you start to use the law the Articles and then they're like okay they see that they and they start giving you excuses it's like yeah we still haven't registered we didn't get the approval we're preparing the contract preparing the SPs there is a lot of investors the launch has finished we just finished the launch and there's a lot of units you just need to wait with us until they get as much as they can of the installments of because they need to get 40% exactly for the bank and then you're hooked and then the project is canceled which we will talk about later on oh tell me about this because it's very important for part of the due diligence that we need to take care of when we're buying a property directly from the developer at what particular stage the developer would have the escrow account because in many cases the reservation form is signed the down payment is done and this money goes to the bank account of the developer directly when can we know that this project have uh an escrow account or the project is registered does the land department for example issue a certificate for this uh um escrow account being uh established and can the buyers ask for it as part of the due diligence the actually this is a very initial stage so you cannot start selling as a developer you cannot start selling even it's under construction unless you complete this stage this this is a prerequisite for the developer to start selling assuming that you can book your property you can pay the advanced payment they send you an invoice they issue Reco funds then this assumes that the developer has checked all the boxes with the dld and took all the approvals they have their own escrow and you should be paying to this escro like don't pay directly to the company back account like you need to have some common sense you know what I mean so if you're paying half a million of advanced payment just double check if this account is an escro account or not and it's it's clear to everyone but if if the developer doesn't do this then just one complaint at the dld will will help everything so this is one of the things that we need to address to all the investors and end users if you're buying an offl property and you realize that the developer is asking you to pay to their operational bank account is not an escro account that's connected to that project you can say no no and this is a red flag not to pay and not to continue with the deal one more red flag go ahead second red flag with respect to the booking form as you mentioned the booking form is created only to put the money for a specific unit and it doesn't mean that developers should sell it to you or not you just have a right like to book it to buy it in the future and it should have only one amount something like 20,000 durhams something like this this will go to the corporate account of the developer but then if in the booking form you start to have an installments like in the sale and purchase agreements that after one month of signing of booking form you paid this amount 10% then after two months 10% so basically it looks like an SBA this is totally illegal and everything goes to corporate account and I saw it already yeah and uh if there were a lot of people who got into this I will not call the developer name but it's a very famous developer here in U you wanted to speak to us about uh one of the cases or one one of the common things that might happen to anybody who's buying a a property when the project for whatever reason gets cancelled so canceled project is is it's a very big Topic in the uee hopefully nowadays we don't see that much of cancel project because the economical status in the UAE is flourishing nowadays of course thank God for this but uh we still see some kind of like remains of the old pass so in in in case of a cancel project everyone ask what's a cancel project how a project can be canceled so basically how it works is that if the developer uh somehow get like uh uh uh financially cannot continue paying or financing the project for for any reason okay there is a lot of small developers what happened is that they cannot liquidate any money from the escro account so the dld actually stopped them based on their completion status and timeline of the project once this happen and they have this financial uh disability there is a committee within the dld it's called cancel project committee so they review this type of projects which which has this financial distress okay and they issue this decision this committee they get together and they convene a meeting at least twice a week twice a month okay so and they take this the decision regarding these projects once this project is cancelled they issue a decision for the cancel project and they suspend the escro account okay no money comes in no money comes out whether to the investors or the developer okay until a very long process where this cancel project go to Dubai courts and as another judicial committee at Dubai courts decide about the fate of the investors within the with this cancer projects and this actually ties in with a very important point I told you about is that you need to sign AI because if you don't sign AI the cancel project committee within Dubai Court when they are reviewing the project status and the escro account and how much is in the escro account and who invested in this project you will not be regarded as one of the investors because you don't have ai so you don't appear in the government system so you must have ai in case the project went to cancel projects committee they at least consider you as one of the investors and when they are making a redistribution proportionately of course to the investors they count you in so if you don't have ai they will not count you in at all but my question is about uh first how long does it take how long does this process take it's number one number two uh as an investor what's your return in distribution because there are also loans from the banks from the developer and stuff so who gets the money first and who gets the money last okay that's a very good question so in terms of timeline I have to say it's frustrating because it might take if not months years okay between the time the project goes to the the the cancel project committee within the dld decision issued to cancel the project to go to Dubai courts Dubai courts another decision and in in the B Court it will be a judgment so recently for example I had a judgment for a cancel project for two of my clients and they are Russian as well by the way and the the table in the Judgment of the investors is more than 550 investor and each one comes with his proportionate from the escro account so my clients for example they they were they were buying a whole store okay of I think six to seven apartments and that was for 27 million they got nine of distribution because as much as they can it's proportionate you know so it's like onethird of what they paid literally so you pay 100% or what you paid is 100% you get 30% because what's left in the escro account is will give you 30% one of the things I want to ask about in this case when we talk about the project maybe it stopped when the development of the the building is like at to 20% or 25% does this um does this progress will be considered within the valuation of whatever remains or we talking only about the cash in the escro account only the money in the es account so whatever will be cancelled it will go back to the government or whoever who owns this sometimes it's big developer because the developer is not the one who's constructing the project you know there is a difference so sometimes the developer just own the land and they sold it to another developer you know so it's only the cash available in the escro account that will be distributed on the investors okay and proportionately so if you were paying 50 million your amount you will get is different than the person who paid 30 million different than the person who paid 15 etc etc etc that's in terms of the timeline so the timeline is really long okay it's it's long to the point where you have a decision that this is your amount that you will get back there is another phase after this is how do you get this money back okay so it's a hustle I have to tell you that's why I'm telling you if if you're making an investment that big you need a lawyer and we keep saying this get a lawyer if you're making this investment it will save you all of this hustle so how to get this money is another dilemma so you have to open an execution court case within Dubai court or Abu Dhabi court or whatever you have to pay fees to the court for execution and you have to wait in the line as well for distribution of this money okay some issues happen and I'll tell you behind the scenes if you have invested this money you and your another and another partner for example 50/50 how would you get the money back you will get it 50/50 but how you will get it 50-50 back they will tell you it's either going to be issue by check in each partner name personal name or we will make a wi transfer to each partner account okay knowing the Matrix of the UAE and the investment diverse investment in the country there is a lot of people that invest in the country but they don't live in the country that that's correct you can confirm this accounts and they don't have a bank account they don't have kyc documents they are not residents and they are not physically here so they cannot take the money if they take a check how would would they cash it can they cash it by proxy no the court would it make an international bank transfer no no so you need to come here you need to have a Visa so basically you will spend the whole return exactly so again this is goes back to a get a lawyer because the lawyer will oversee this from the beginning and he will tell you yeah yeah yeah I mean I I understand this very well due diligence might might seem like a bureaucracy might seem like an extra cost on the de yeah and they say we don't want to pay good money over bad money no it's not bad money at all believe me when you come back to me and I charged you hundreds of thousands of dollars just to get you this Millions you will understand why you would have saved this in the beginning going back to the investor interest in in this we have seen or or it's it's quite common in any real estate market that is doing very well uh that Brokers and brokerage companies they tend to oversell the properties and oversell the ROI have you seen in the practice I'm not talking about your uh previous employer I'm talking about in the market have you seen um that Pro breea Brokers are overselling the properties and have they caused uh distress to the investors who are um getting not the correct information about the ROI or even the developers who are promising officially and their marketing materials uh guaranteed 8% 9% 12% I've seen it Roi for their investors uh first of all um normally developers they're not involved uh directly in the information this kind of information so the launch is done by the marketing company which is completely separate company which signed an agreement with the developer to do the launch of the project where they invite brok ERS they talk to the Brokers all the managers they I don't know exchange the numbers chatting on WhatsApp or saying yes this will be 8% of return on investment 9% above 9% and as a broker you need to understand that this is impossible it doesn't exist you cannot get such this amount of money if it's for instance something like um Hotel apartments or something and you have a rental pool agreement with you and 400 other people so this is a lot of money and there is a high season there's a low season there's people are coming and going and the prices are different as we know during the summer the prices are going down in all the hotels even the most expensive ones so plus Ramadan as well not that popular timing um then what happens people they trust a broker broker trust the marketing team they don't check they don't even think that this is impossible I in my opinion like I I think if you are a grown-up person you should understand this we're not children um and then what I saw was even worse so it was 9% Roy promised but in the year people were signing SBA with the developer the Roy was promised from the marketing team from completely another company who was doing the launch they signed the SBA SBA oblig you to sign the pool agreement rental pool agreement you sign it with another company because rental pool is managed by another company the manager of this building yeah you want to kick out what do you need to do first they say it's impossible you say I want to opt out impossible I look at the contract it says you need to give a notice within 90 days from the opt out we will send you an opt out agreement you sign it and then you can use your apartment fine first they said no then they said this Clause is not working anymore but it was never canceled and nobody agreed nobody signed extra documents saying that this Clause is not working anymore so I helped the client to kick out after 90 days they send them an opt out agreement which states only you can live in this apartment or your first relatives but if they come there you need to be in this apartment together with them you cannot rent it out and if you are selling your apartment to somebody else this person will sign SBA and Rental pool agreement so it's Catch 22 you and then everybody knows about this project has a very bad news and nobody wants to buy a property it's basically we will own you and we will own whoever comes from your side for 99 years from today yes and uh the client when she signed an opt out agreement it's been six months since she bought the place and it was running uh her Roi was 0.49% out of 9% of promised on this brings me to a question because I know in other real estate markets for example marketing materials are legally binding so you cannot advertise 12% or 8% or 9% and don't deliver so even if it's not in the contract the marketing material materials related to the project you are selling is a binding information that is is part of the promise you make to your investors do you think an argument like this would stand in court in the UA well if we look at it from a pure civil law perspective not a real estate thing it will stand because any contract it has three conditions to be a valid contract you have promise or let's say offer and acceptance and consideration okay so if any of these conditions uh is buil based on a lie or based on un untrue information or misrepresented information it's basically fraud civil fraud so misrepresentation so if I'm an investor I sit down with you you promis me something and based on that promise I take a decision to get in contract with you if this promise uh appear to be untrue later on and you can prove this then your intention to buy the property is is based on something wrong then it's invalid so here's the entrance here's where you can break it from a legal point of view however this is theoretical yeah because you have an spba and it doesn't include your 9% that's one number one number two as you have mentioned most of the time the marketing company is different than the developer so when things actually happen the developer will come and tell you I've never promised you this where it's written this person is not working in our company anymore exactly saw that and then the market company will marketing company will come and say if you bring them or join them join them to the proceedings they will come and say we didn't sign anything with you to promise you this it was just a marketing campaign and what we have even seen not in a very similar situation they say oh this was just an indicative figure it's a speculation don't take it to the heart okay this is it's not written in your spa just a marketing campaign and it's indicative figure and it's all over Dubai it's it's not only us everyone says this is the normal return of investment in the uee market crash what can we tell you this is the risk of investment so from a theoretical point of view you can but from a practical point of view the only the only party who will be benefiting from this is us when you come to us and we file a case for you and take fees so to be very honest as I told you before we have to be very honest with our clients just get a lawyer from the beginning because it's it's a disaster and you cannot the legal repercussions of this is not easy to deal with later on yeah this is one of the things that I believe it would help a lot the the the market to be more reliable and with with better reputation and and actually better more stability if reate Brokers all the stakeholders in the business you know in this reate Brokers The Brokerage companies themselves the developer and the marketing companies working for the development uh promoting these project who be held accountable to their information and someone will say you cannot promote something like that unless it is something that you can deliver and if you promise Roi of one or two or three years of that percentage you are liable to it if the investor is not making it that would probably trans transform the market into a more trusted and more stable market so they do not overpromise um numbers that doesn't make sense I agree with you I agree 100% but it's a it's a it's the Ugly Truth as they say y putting more regulations would maybe stringent the the the surge in the prices or make it harder to make profits or maybe maybe maybe make it less interesting market I'll tell you what in in it's it's very interesting that you only as as a legislator you put this more regulations when actually uh let's say a precedent happen so once someone is has enough courage to take this one of these marketing companies okay to court and have a president then I think there will be some change in the in the market this is what I see it yeah but what I agree with you but what I saw when I told to a few of the clients this is the length of the Court proceedings this how much you need to pay this how much you need to wait and they were like oh we better try to resell this property they don't want to go in there that's said they're scared then we come to a different thing I mean in other jurisdictions you find a lot of litigation funding that a lot of companies and insurance companies uh providing uh financial support to such litigation of course it needs to have a a kind of a criteria that they also have to benefit from it but we don't see a lot of litigation funding in the UA well there there is actually I've been contacted by a lot of companies for the past couple of years but there is no Legal Foundation for the litigation funding in the U so it's not from a legislation point of view it's it doesn't exist there is no special law for litigation funding as opposed to other jurisdiction maybe Europe Canada and the US but how people actually deal with it from a practical point of view is like they sign some kind of an assignment agreement for assignment of Rights so basically they buy your rights okay chip in if you have like a debt or any kind of a claim for let's say 1 million Dirhams they buy it from you for like maybe 20 30 cents for a dollar okay and then they file the claim on your behalf or based on the assignment agreement on their own behalf they collect whether whatever they they collect more more than what they have paid you of 20 or 30 Cent for a dollar they take it to their own Pockets but it's not very practical to be honest in the UAE and it's not very common going back to the transactions I would like to ask you about um what is the difference between the regulation and the practice whenever there's a uh buying and selling of a real estate uh property um in regards to the security check uh there is an obligation for the buyer to put a check for for the property and I think this is a practice as well how does that work from the Practical side well from the legal side there's supposed to be two checks one from the seller and one from the buyer for the 10% of the total price of the property um the buyer gives the check to the broker of the seller it should be held by the broker of the seller and as for the unified um sell contract form f uh they cannot cash it so this is uncashable check says that in the form and it can only be cashed if both parties seller and the broker agree that the deal didn't go through one of the party is guilty and and they're like agreeing in writing that okay this check can be cashed out or by the decision of the court if the parties do not agree this is the law and this is the form uh in general as I told you only the buyer is given the check and then anything happens nobody can cash it out and you need to go to the court and the buyer is saying no I don't agree it's not my fault and things are going there people well in in my practice there was only one court case but uh normally the Brokers with whom I was working they were managing to find another new buyer within the short period of time they said that uh they agreed on zero Commission or half of the commission but they will find another buyer and they will just help them to resell their apartment very fast and it happen so this is actually a good option to not to go to the court but if the broker is willing to you know keep the client and make the client happy and do this kind of stuff this is from the transaction side because the 10% is basically a guarantee between the buyer and the seller in the form F the initial sales uh agreement that whoever pulls out of the deal for no legitimate reason should panal should should let's say pay a penalty of 10% part of this penalty is basically I think 2% uh sorry 20% of the penalty goes to the brokerage company that was involved in the deal how is it in the practice because as we as it seems like the Practical uh transactions happen that the sellers do not give this guarantee check how is it in the practice if the if if the deal falls apart and the buyer have uh put the security check and they're not able to recover it again well in in in practice as as usual it's very different from from the from the theory so I'll tell you one interesting case we had we had a client who paid this check and this check actually how it works is that as she mentioned it stays with with the broker as an escrow so the broker at during this time his liability is the same liability of an escrow he should hold the check he should not return it to the buyer and he should not hand it over to the seller at the same time unless the deal go through so how the courts looks at it from a practical point of view is that for example in the case we we represented many clients but I'll give you one one example is that the court always look at the reason why the cas why the deal did not go through is it because of the buyer pulling back or because of the seller for example found another price better price and he retracted his his decision to sell the this property to this to this specific buy so what we see in practice is that for example the form F said says that uh as an obligation on the buyer he will continue in the deal and he will buy only subject to being able to obtain a finance okay so for example this wording if it's not written black and white very clear that it is what we call in the legal uh condition precedent okay it has to be mentioned as a condition precedent because otherwise he will come back and he does not have the financial liability to go through with the deal so in his mind it's a very valid reason why I'm not buying the property I don't have the price of the property which makes sense but if it's not written black and white in the agreement that this would be a deal breaker as a condition president then it's your fault then you lose the 10% but you lose the 10% does not mean that the Brokers go straight away based on his own interpretation and own valtion and give the check to the to the seller it doesn't work like this the broker has to wait for either a makeable resolution between both of them that's one two he has to wait for the dld because sometimes the buyers or the sellers they complain to the dld and the dld takes a decision based on the documents or if someone sued the other the broker still has to keep holding to the check until there is a court case issued in my case a court judgment is issued in my case I'm telling you about it is that actually the broker handed over the check to the seller without the permission of the buyer because he was too like enthusiastic that he wants to close this deal and take his commission which is a problem okay so the seller what did he do he cashed the 10% on the basis that this guy is like he gave me a check is is is very like serious about the transaction and then the guy couldn't provide the uh the the the finance then he came back and said there is a rejection on my on my loan application what do I do then the seller said you never mentioned that you will not buy unless there is a finance then he comes back and say no it's written in the agreement and when you look at the agreement the wording is not clear okay it's it doesn't say specifically subject to being eligible for a finance within this period of time for example no it doesn't say that it says that the way of payment is finance so way payment of Finance it assumes that you have a finance approval you have a bank approval for your home loan but this is not the case so all of this stuff need to be very clear in form F and the seller need to understand his rights and obligation buyer need to understand rights and obligation and the agent in between them he needs to understand his rights and obligations as well because he cannot sell the buyer and give the seller the the the the check and at the same time cannot return the check to the buyer you know what I mean he's an Esco and he has a legal obligation sometimes in in some cases actually we get the real estate agent as a party to the case okay and we ask for damages in this specific case we did so because he handed over the check illegitimately to the seller because they have an interest in cashing the check they take 20% so they will take 20% of a deal that didn't go through it doesn't make any sense yeah absolutely and this this kind of uh involvement of the restate Brokers and and uh and The Brokerage companies is why the regulator have made these courses and make these uh code of ethics for resay Brokers and make these education uh courses for all of them and I think this is one of the things that you were uh taking care of in your company that you were focusing on what the Brokers need to learn in order to do their job how was it uh yes that's correct so when I joined the company I asked the HR team to provide me with the slides from re for the Brokers so this is this it's 400 slides I went through uh for I was really surprised that the slides were all in Russian so I gave them a question to our company not our company to the company let's say uh was this training in Russian and they said yes and it shocked me because out of all the brokers who are working in the company 80% of them didn't speak any English so how can they close the deal in the country where the main language is Arabic or English and I think this is an essential the broker should not only do the r test but he should do the English language test to close these deals this is very important because then even he or she doesn't understand what some documents says they're like oh yeah I said did you read this document well yeah I looked at it we look through the translator you cannot trust Google translator 100% or any other translation like you need to understand what you are doing and if you don't know the language or the level of your knowledge of English is I don't know first grade then how can you be a broker this is a very important thing you need to know English and all the training should be in English well guys thank you so much it's an amazing discussion and I think real estate is one of the topics that we will keep inviting you to talk about it and we talked with huge Focus today about the investor and the re estate brokerage and the and the developer side and uh hopefully next time we invite you for different topics about real estate thank you very much Muhammad for coming thank you Ahmed thank you Veronica thank you thank you very much everybody for uh giving us the time and this is your dose from Monday legal see you next week