If you are planning to invest in an off-plan property in Dubai and the developer fails to deliver the project on time, it is crucial to understand your legal options. In Dubai, the relationship between a purchaser and a developer is governed by a Sale Purchase Agreement (SPA). This agreement includes various clauses such as the purchase price, completion date, compensation for breaches, and force majeure terms, which outline circumstances beyond the control of the parties involved.
According to Article 246(1) of the Federal Law No. (5) of 1985 on the Civil Transactions Law of the United Arab Emirates, the SPA must be implemented in good faith and in accordance with its provisions. If there is a breach of any clause in the SPA, the affected party may be entitled to compensation, as stipulated in Article 295 of the UAE Civil Transactions Law.
In case of disputes, the Dubai Land Department (DLD) can intervene to mediate and propose solutions to preserve the contractual relationship between the developer and the purchaser. This is governed by Article 14 of the Executive Council Resolution No. 6 of 2010, which also outlines the process for documenting and approving amicable settlements.
Furthermore, if the DLD determines that the developer has breached the SPA, it can refer the matter to competent authorities for further action, as per Article 13 of Law No. 13 of 2008 regulating the Interim Real Property Register in the Emirate of Dubai. However, the developer may argue that they were unable to fulfill their obligations due to force majeure, as stated in Article 21 of Executive Council Resolution No. 6 of 2010.
In summary, if your developer delays handing over the property, you can initially approach the DLD to file a complaint. Alternatively, you may directly file a civil case in a Dubai court seeking compensation for the delay. The court will determine your entitlement to compensation based on the provisions of the SPA.
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