Dubai: What Are a Property Buyer's Rights When an Off-Plan Project is Delayed?

Question: I am considering investing in an off-plan property in Dubai. If the developer fails to complete the project within the agreed timeline, what legal recourse do I have?

Answer: In Dubai, when purchasing an off-plan property, the buyer and developer enter into a Sale and Purchase Agreement (SPA) that governs the terms of the transaction, including the purchase price, completion date, compensation for breaches, and force majeure conditions. The SPA outlines the rights and responsibilities of both parties and must be executed in good faith, as stipulated in Article 246(1) of the UAE Civil Transactions Law (Federal Law No. 5 of 1985).

If the developer fails to meet the agreed timeline for project completion, the buyer may be entitled to compensation, either as specified in the SPA or as determined by a court. According to Article 295 of the UAE Civil Transactions Law, damages can be awarded to the affected party, and in some cases, the court may order specific performance to rectify the breach.

In the event of a dispute, the buyer can seek assistance from the Dubai Land Department (DLD), which can mediate between the buyer and developer to resolve the issue amicably, as per Article 14 of Executive Council Resolution No. 6 of 2010. If the dispute remains unresolved, the DLD can refer the matter to the relevant authorities. Additionally, if the developer claims a force majeure event (such as circumstances beyond their control) has delayed the project, they may present this as a defense under Article 21 of the same resolution.

Ultimately, if the dispute is not resolved through mediation, the buyer may file a civil case with the Dubai courts to seek compensation for the delay, with the court assessing the claim based on the SPA's terms.

News Source: Khaleej Times