Property Handover Delay in Dubai | Cancelled Projects in UAE

Investors and builders in Real Estate sector are commonly hurdled by issues pertaining to the timely hand over of the property. This kind of dispute often causes enormous financial loss from investor’s pocket. Therefore, UAE legislators implemented laws to protect the claims of the investors who opt to deal with properties in off plan cases. However, several / difference legal options available for handover delays would mainly depend upon the terms and conditions mentioned in the contract.

Take for example, if the main reason of delay is within the context of force majeure (clause in the contract exonerating liability for unavoidable circumstances, such as catastrophes), then the purchaser will be unable to terminate the contract nor claim compensation for delay from the contractor/developer.

However, if the main cause of delay is imputed primarily due to the failure of the contractor/developer to perform its obligations set out in the contract resulting to breach thereof, then the purchaser may resort to the following legal remedies:

• Termination of the agreement
• Claim compensation for such delay (this must be expressly stipulated in the signed agreement between the parties and the purchaser must prove that the delay has caused substantial losses which is detrimental to the purchaser). Pursuant to UAE law, purchaser can claim compensation for the following: (i) Interest; (ii) Deposit; (iii) Legal and Agent fees; and (iv) any other amount accrued as determined and proved.

The above-mentioned legal remedies can be done by filing a claim in Dubai courts for litigation or if the parties have agreed in the contract for alternative dispute resolution, an arbitration case can be filed. Decision decreed in both the resolving avenues will be binding on all the parties related to the dispute.

In some instances, investors can also inquire with the Real Estate Regulatory Authority for delayed projects and cancelled project before the committee if the property is cancelled by RERA. Thus, Judicial Committee for liquidation has exclusive jurisdiction over any dispute related to cancelled projects and no other court or arbitration proceedings are permitted to decide on any stalled projects. Investors have the right to lodge their claims directly to the Judicial Committee in this regard.

Hence, before filing any legal case or seeking any settlement, it is very important to first review the terms and conditions of the signed contract between the parties. It is also noteworthy to check whether the property is registered with DLD and approved by RERA. Conducting a due diligence prior to lodging a claim will greatly be an advantage towards the investor in getting the aid needed and resort to the best remedy to protect its rights and interest.

If you are facing issued of property handover delays, legal opinion and assistance from experts will be indispensable. We at Al Reyami Advocates & Muhyealdeen International Legal Consultants has expert property lawyers in Dubai that can help you review and revisit the contract and provide you our legal opinion and assist you properly in enforcing your legal rights and remedies provided under the laws of United Arab Emirates. You may contact us for further information and consultation.

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