Dubai: What are the property buyer’s rights in case of delayed off-plan project handover?

In Dubai, a purchaser and a developer (seller) enter into a Sale Purchase Agreement (SPA) pertaining to the property which is sold on an off-plan basis.

The SPA will include clauses, including—but not limited to—purchase price, completion date, compensation for breaches, force majeure terms (beyond the control of the parties to the agreement), etc., and therefore, the relationship between the purchaser and a developer is governed in accordance with the agreed terms and conditions of the SPA.

Additionally, if there is a dispute with a seller (developer), a purchaser may immediately approach the Dubai Land Department (DLD) to settle the matter. This is in accordance with Article 14 of the Executive Council Resolution No. 6 of 2010 Approving the Implementing Bylaw of Law No., 13 of 2008 Regulating the Interim Real Property Register in the Emirate of Dubai, which states, “Where any dispute between a developer and a purchase, the DLD may undertake conciliatory efforts to preserve their contractual relationship and may propose any solutions it deems appropriate to achieve this objective. Where the developer and the purchaser reach an amicable settlement, that settlement shall be documented in a written agreement executed by the developer, purchaser, or their respective representatives. Upon approval of that agreement by the DLD, it shall become binding on both parties.”

Moreover, based on a purchaser’s complaint, if the DLD is satisfied that the developer (seller) has committed breaches of the SPA, it may refer the matter to competent authorities for further action or decisions.

This is in accordance with Article 13 of Law No. 13 of 2008 regulating the Interim Real Property Register in the Emirate of Dubai, which states, “Where it is established to the satisfaction of the DLD that the developer or broker has committed any act or omission in violation of the provisions of this law, or any other legislation in force, the Director General of the DLD must prepare a report on the same and refer the case to the competent entities for investigation.”

However, a developer (seller) may have the right to state before a competent authority or a court that it was not able to fulfil obligations mentioned in the SPA related to the handover of property due to force majeure (reasons beyond the developer’s control). This is under Article 21 of Executive Council Resolution No. 6 of 2010.

Based on the aforementioned provisions of law, if your developer delays handing over the apartment to you as agreed, you may initially approach the DLD and file a complaint against the developer before approaching court. Alternatively, you may directly approach a court which has jurisdiction in Dubai to file a civil case against the developer seeking compensation for the delay in the handover of the apartment to you. The court may decide whether you are entitled to compensation based on the provisions of the SPA.