“We are still staying in a rented property, although we own an apartment which was due to be handed over to us two years ago.”
Question: I had booked an apartment in Dubai two years ago. The completion date was 2019, with a two-year grace period. However, the grace period ended in December 2021 and the apartment has still not been released to us. What are my legal options here? Can I get compensation? If yes how much ? I only ask because we are still staying in a rented property, whereas we have an apartment that was supposed to be handed over to us two years ago.
Responnse: In accordance with your questions, it is assumed that you signed the sale and purchase agreement (the “SPA”) with the developer when booking the apartment. It is also assumed that you have already paid all relevant monetary consideration to the developer before the revised completion date in 2021.
The provisions of Federal Law No. (5) of 1985 on the Civil Transactions Law of the United Arab Emirates (the “Civil Transactions Law of the United Arab Emirates”), Law No. 19 of 2017 amending Law No. No. 13 of 2008 regulating the The Property Registry in the Emirate of Dubai and the Escrow Accounts for Property Development in the Emirate of Dubai Act No. 8 of 2007 (the “Dubai Escrow Accounts Regulations for real estate development”) are applicable.
It should be noted that it is the developer’s responsibility to hand over the property he has built to the buyer on or before the completion date. The relationship between you and the Developer is primarily governed by the SPA and the aforementioned provisions of applicable law in the United Arab Emirates and Dubai.
You and your developer must comply with the terms set out in the SPA. This is in accordance with Section 246(1) of the UAE Civil Transactions Act, which states: “The contract shall be performed, in accordance with the provisions contained therein and, in a manner consistent with the requirements in good faith.”
Also, you may not be required to pay the balance of the consideration to the developer, as the developer has not handed over the apartment in December 2021.
This is in accordance with Article 247 of the UAE Civil Transactions Law, which states: “In bilateral contracts, when reciprocal obligations are due, each of the contracting parties shall have the right to refrain from performing its obligation in the event that the other party fails to fulfill its obligation.
Based on the aforementioned legal provisions, you can take legal action against the developer for not handing over the completed apartment by December 2021 at the latest, as agreed by the developer. You can ask the competent dispute resolution authority to order the developer to immediately hand over the completed apartment or you can request reimbursement of the amount of consideration, monetary compensation and interest owed to you by the developer. .
In Dubai, the rights of the buyer of the property are protected by the provisions of the Dubai Land Laws. Section 1(B) of the Amendment Act No. 19 of 2017 to Act No. 13 of 2008 regulating the Provisional Registry of Real Estate in the Emirate of Dubai states: “Where the real estate project is canceled under ‘a reasoned decision by RERA, the developer shall reimburse all payments made by purchasers in accordance with the procedures and rules stipulated in the aforementioned Law No. 8 of 2007.’
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Section 15 of the Dubai Escrow Accounts Regulations for Real Estate Development states: “In the event of an emergency resulting in the non-completion of a real estate project, the escrow agent for such project shall, after consultation with the DLD , take the necessary measures to preserve the rights of the depositors by ensuring the realization of the Real Estate project and the reimbursement of the payments made by the depositors.
Ashish Mehta is the founder and managing partner of Ashish Mehta & Associates. He is qualified to practice law in Dubai, UK and India. All the contact details of his office on: www.amalawyers.com. Readers can email their questions to: news@khaleejtimes.com or send them to Legal View, Khaleej Times, PO Box 11243, Dubai.
