Question: I am planning to invest in an off-plan property in Dubai, with the handover scheduled for 2028 as per the sale agreement. What happens if the developer delays the handover? Am I entitled to compensation, and when would I receive it?
Answer: In Dubai, the sale of a property involves signing a Sale Purchase Agreement (SPA) by both the seller and the buyer. This agreement typically includes clauses such as the purchase price, completion date, compensation for breaches, and force majeure terms. The relationship between the buyer and the seller is governed by the terms and conditions outlined in the SPA. The SPA is implemented in good faith according to its clauses, as stated in Article 246 (1) of the Federal Law No. (5) of 1985 On the Civil Transactions Law of the United Arab Emirates.
If any terms in the SPA are breached, the affected party may be eligible for compensation, either as outlined in the SPA or as decided by a judge in a Dubai court. This is in accordance with Article 295 of the UAE Civil Transactions Law. The developer is obligated to hand over the property to the buyer once it obtains a completion certificate, provided the buyer fulfills all their obligations, as per Article 7 (1) of the Executive Council Resolution No. 6 of 2010.
In case of non-completion of the project, the developer may have to refund the amount to the buyer based on the percentage of completion mentioned in Article 15 of Executive Resolution No. 6 of 2010. This is in accordance with Article 18 of the same resolution. Additionally, Article 22 of the resolution lists the omissions and negligence of a developer related to the completion of off-plan property in Dubai.
If there is a dispute with the developer, the buyer can approach the Dubai Land Department (DLD) for an amicable settlement, as per Article 14 of the Executive Council Resolution No. 6 of 2010. However, the developer may claim force majeure as a reason for not fulfilling obligations, according to Article 21 of the same resolution. If the developer fails to repay within the period set forth in Article 26 of the resolution, the Real Estate Regulatory Authority (Rera) of Dubai may refer the matter to relevant judicial authorities, as stated in Article 27.
Based on these legal provisions, if your developer delays the handover of the apartment, you can initially approach the DLD and file a complaint against the developer before going to court. Alternatively, you can directly approach a Dubai court to file a civil case against the developer, seeking compensation for the delayed handover of the property.
