In the event that a purchaser defaults on his or her contractual obligations for an off-plan real estate unit, the developer typically notifies the Land Department, which has jurisdiction to mediate real estate disputes. The Land Department will send an administrative notice to the purchaser, who must proceed to fulfill their obligations within 30 days or provide a defense to the developer’s claim of default.
At the end of the 30-day period, the Land Department shall make an administrative determination on the matter in the event that the purchaser has not cured the default within the stated timeframe. If the Land Department decides in favor of the developer, it will issue a Permission Letter for the developer to proceed with procedural termination and de-registration of the unit and with the issuance of a refund of monies paid less damages, which are calculated on the basis of the percentage of completion of the project in accordance with the law. A purchaser can always legally challenge the developer in the local courts if they offer a legitimate reason for suspension of payment in accordance with their rights under the federal laws.
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