Dubai: Guide to Claiming Compensation for Delayed Property Handover

Thinking of investing in off-plan property in Dubai? Here’s what you need to know about claiming compensation if your developer misses the handover deadline.

When investing in off-plan properties in Dubai, the Sale Purchase Agreement (SPA) governs the relationship between you and the developer. This agreement details the purchase price, completion date, and compensation terms for any breaches. Under Federal Law No. (5) of 1985 On the Civil Transactions Law of the UAE, contracts must be executed according to their terms and in good faith.

If a developer fails to meet the handover deadline specified in the SPA, you may be entitled to compensation. Article 295 of the UAE Civil Transactions Law allows for monetary damages and, in some cases, restoration to the original status or specific performance related to the breach.

Developers are required to hand over properties once a completion certificate is obtained, assuming the purchaser has met all contractual obligations. Article 7 (1) of the Executive Council Resolution No. 6 of 2010 mandates that developers must complete the handover or register the property in the purchaser’s name upon project completion, even if there are outstanding financial dues.

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If the developer fails to complete the project, they must refund the purchaser based on the percentage of work completed. Article 18 of the Executive Council Resolution No. 6 of 2010 stipulates that refunds should be processed no later than one year from the agreement’s termination or within 60 days from the sale of the unit.

In the event of a delay, the first step is to file a complaint with the Dubai Land Department (DLD). The DLD can mediate disputes and facilitate an amicable settlement. If mediation does not resolve the issue, you may need to take legal action by approaching a Dubai court to seek compensation. The Real Estate Regulatory Authority (RERA) may also intervene if the developer cites force majeure or fails to issue refunds within the specified timeframe.

If these measures do not lead to a resolution, the matter can be referred to judicial authorities for a final decision.

Understanding these procedures and your rights can help ensure that you are adequately compensated and that your investment remains protected.