Off plan sales can be commonly found in mixed-use developments. Under Oman Sultani Decree No. 12/2006 and Oman Decision No. 45/2017 Issuing the Regulation of Real Estate Development in the Special Economic Zone in Duqm, there is an express provision not to sell units off plan and until development is complete. However, in practice this is often overlooked and off plan sales are carried out.
In this Practice Note, we will discuss the practical aspects of off plan sales.
Practical Guidance
With the very underlying risk factor of off plan sales, Omani real estate laws prohibit the sale of and entering of sale deeds in respect of a unit or property that has not come into existence.
Understandably, the sale deed entered in respect of the property under construction cannot be registered with the Ministry of Housing.
Therefore, off plan sales are governed by the private contracts between the parties and any remedy will be as provided and agreed in the contract.
In most of the standard off-plan sale contracts, there is no means to claim the money back paid so far in instalments.
In cases where the development could not complete the construction, there may be no compensation under the offplan sale contracts and as such the buyer is left with no remedy.
In some cases, the court has awarded compensation to the buyers on the basis that it is prohibited by the law to enter into sale contracts for a property that has not come into existence yet.
Also, Oman courts look at it as a false promise and hence, remedies may be available through the court process.
Related Content
Legislation
Oman Decision No. 45/2017 Issuing the Regulation of Real Estate Development in the Special Economic Zone in Duqm
Oman Sultani Decree No. 5/1980 on Regulating Use of Lands in the Sultanate
Oman Sultani Decree No. 2/1998 Promulgating the Land Register Law
Oman Ministerial Decision No. 43/1998 on the Regulations of Corporate Ownership and Registration of Real Estate
Oman Sultani Decree No. 12/2006 on the System of Real Estate Acquisition by Non-Omanis in Integrated Tourism Complexes
Oman Sultani Decree No. 21/2004 on Regulating the Ownership by GCC Nationals of a Property in the Member State
Oman Sultani Decree No. 76/2010 Promulgating Corporate Ownership of Land and Real Estates
Oman Ministerial Decision No. 5/2011 Regarding Commercial or Residential-Commercial or Industrial Lands Ownership
Oman Sultani Decree No. 29/2018 Promulgating the Law Prohibiting Ownership of Lands and Real Estate Properties by Non-Omanis in Certain Places
Oman Ministerial Decision No. 43/2012 Organizing Areal Extensions and Increases for GCC Citizens, Non-Omanis and Omani Juridical Persons
Oman Sultani Decree No. 29/2013 Omani Civil Transactions Law
Oman Sultani Decree No. 5/1981 on the Usufruct Law
Oman Sultani Decree No. 88/1982 on the Executive Regulations of Oman Sultani Decree No. 5/1981 on the Usufruct Law
