Overview
The Wafi system requires the developer to register the project and open a dedicated guarantee account for buyers' funds, so these funds are used only in executing that specific project, not for other purposes, protecting the buyer from the risk of a stalled project.
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Off-plan unit sale contracts need careful drafting of delivery and delay terms, aligned with Wafi requirements while protecting the interest of both developer and buyer.
Regulatory Basis
The governing framework is the Off-Plan Sale and Lease Law known as Wafi, which sets registration requirements, guarantee accounts, and terms for selling units.
How We Help Developers
The lawyers help register the project under the Wafi system and meet the requirements for opening the guarantee account before beginning sales to the public.
Who Needs This Service
A developer planning to sell project units off-plan who needs correct registration under the Wafi system before beginning sales.
A buyer facing a delay in delivering a unit purchased off-plan who needs their rights assessed under the Wafi system.
Some new developers in this space assume the guarantee account is merely a formal administrative procedure, when it's actually subject to careful monitoring by the competent authority verifying that funds are used exclusively for the registered project, and any attempt to withdraw funds for another purpose, even temporarily, may be considered a serious violation requiring immediate corrective action from the developer.
Additional Considerations
These projects connect directly with the construction and engineering law service regarding contracts for executing the registered project.
When a dispute arises with a buyer over delivery, this connects with the real estate developer disputes service.
Common Questions
Is registration under the Wafi system mandatory for every off-plan sale?
Yes, the system requires registering the project before starting sales to the public, and the lawyers help developers meet this requirement.
What happens to buyers' funds if the project stalls?
These funds are held in a dedicated guarantee account for the project, providing protection to the buyer that differs from a sale outside the Wafi system's framework.