Question: I purchased an apartment from a private developer in Dubai, and the project faced a delay, resulting in receiving my apartment over a year past the committed date. Despite this, I upheld my EMIs without delay throughout the 4-year payment plan. Moreover, I had to pay rent for an additional year due to the delay. How can I pursue compensation and reimbursement for the year's rent paid to the developer?
Answer: In Dubai, when a buyer and developer enter into a Sale Purchase Agreement (SPA) for an off-plan apartment, the SPA encompasses clauses related to purchase price, completion date, compensation for breaches, force majeure terms, etc. This agreement is to be executed in good faith in accordance with Article 246 (1) of the Federal Law No. (5) of 1985 On the Civil Transactions Law of the United Arab Emirates, which mandates implementation of the contract based on its provisions and in alignment with good faith requirements.
In case of SPA breaches, the affected party may be entitled to compensation as stipulated in the SPA or determined by a Dubai jurisdictional court, pursuant to Article 295 of the UAE Civil Transactions Law. Additionally, if a dispute arises, the buyer may seek resolution through the Dubai Land Department (DLD) under Article 14 of the Executive Council Resolution No. 6 of 2010, seeking amicable settlement and potential conciliatory efforts by DLD.
Moreover, upon a complaint by the buyer and verification by DLD, if the developer is found to have breached the SPA, the matter may be reported to competent authorities for further action, according to Article 13 of Law No. 13 of 2008. However, the developer can defend themselves by citing force majeure for failure to fulfill SPA obligations related to property handover, per Article 21 of Executive Council Resolution No. 6 of 2010.
Furthermore, the buyer may claim damages or lost profits caused by the developer's actions, in line with Article 292 of the UAE Civil Transactions Law. Given your developer's delay in apartment handover and the resultant financial burden of renting for an additional year, you can initiate a complaint with DLD and subsequently pursue a civil case in a Dubai court seeking compensation based on SPA provisions.
For detailed guidance, independent legal advice from a Dubai-based legal practitioner is recommended. The applicable laws in this case are Federal Law No. (5) of 1985 On the Civil Transactions Law of the UAE; Article 13 of Law No. 13 of 2008 regulating the Interim Real Property Register in the Emirate of Dubai; and Executive Council Resolution No. 6 of 2010 Approving the Implementing Bylaw of Law No. 13 of 2008 Regulating the Interim Real Property Register in Dubai.
Ashish Mehta is the founder and Managing Partner of Ashish Mehta & Associates, and is qualified to practice law in Dubai, the United Kingdom, and India. Any queries may be emailed to: news@khaleejtimes.com or sent to Legal View, Khaleej Times, PO Box 11243, Dubai.
