Question: I am considering purchasing an off-plan property in Dubai. If the developer fails to deliver as promised, what legal recourse do I have?

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

The SPA will include clauses regarding the purchase price, completion date, compensation for breaches, and force majeure terms (beyond the control of the parties to the agreement), among others. Therefore, the relationship between the purchaser and the developer (seller) is governed in accordance with the agreed-upon terms and conditions of the SPA.

The SPA will be implemented in good faith in accordance with the clauses mentioned in it. This is by Article 246 (1) of the Federal Law No. (5) of 1985 On the Civil Transactions Law of the United Arab Emirates, which states, “1. The contract shall be implemented according to the provisions contained therein and in a manner consistent with the requirements of good faith.”

Furthermore, in the event of a breach of any of the clauses in the SPA, one of the parties may be entitled to compensation as mentioned in the SPA or as determined by a judge in a court with jurisdiction in Dubai. This is by Article 295 of the UAE Civil Transactions Law, which states, “Damages will consist of a money payment. Upon request of the victim, however, the judge may, by the circumstances, order that the damage be made good by restoring the parties to their original status, or by performing, in compensation, a specific matter connected with the prejudicial act.”

Additionally, if a dispute arises with a seller (developer), a purchaser may approach the Dubai Land Department (DLD) to settle the matter amicably. This is by Article 14 of the Executive Council Resolution No. 6 of 2010 Approving the Implementing by law of Law No., 13 of 2008 Regulating the Interim Real Property Register in the Emirate of Dubai (the ‘Executive Council Resolution No. 6 of 2010’), 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 and the purchaser or their respective representatives. Upon approval of that agreement by the DLD, it shall become binding on both parties.”

Furthermore, based on a complaint made by a purchaser, if the DLD is satisfied that the developer (seller) has committed breaches of the SPA, it may prepare a report and refer it to competent authorities for further action or decision. This is under 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 plead 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 control of a developer). This is by Article 21 of Executive Council Resolution No. 6 of 2010.

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

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Source: Khaleej Times

30th June 2025