Due to the delayed delivery, the court cancels the contract and pays Dh100,000 in compensation.
Dubai: After determining that the developer had not fulfilled its contractual responsibilities and had postponed the completion and transfer of the unit, the Dubai Real Estate Court has ordered the cancellation of a residential property sale contract in a Riviera-area building. The real estate corporation was ordered by the court to reimburse the investor Dh516,872 and compensate them for material and moral losses with Dh100,000. Additionally, the developer was mandated to pay court costs, litigation costs, and attorney fees.
An off-plan property purchase agreement between an investor and a real estate developer for a residential unit valued at Dh1.722 million, payable in two installments, is the source of the disagreement, according to court documents. By paying the first installment of Dh516,872, together with registration fees and associated administrative charges, the investor fulfilled his contractual duties. However, the developer did not follow the agreed-upon construction timeline, according to official documents and construction status reports that were presented to the court. Project execution was delayed since the work had not progressed to a point where the unit could be delivered within the agreed-upon period.
The developer contended during the proceedings that construction was almost finished and that the contract permitted an extension of the completion period. The court dismissed this defense, concluding that the violation was amply demonstrated by progress reports and documentary evidence, and that the delay went beyond the time frame specified in the contract. Both parties were compelled to return to their pre-contractual positions, including restitution of all monies paid, after the court determined that the developer’s failure warranted the contract’s cancellation. The investor’s loss of chance to invest his money and profit from the usage of the property was reflected in the compensation award. The ruling highlights the Dubai courts’ ongoing commitment to defending investors’ rights in off-plan real estate deals when developers neglect to fulfill delivery commitments.
