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Legal Options for Property Handover Delays in UAE

There are many people who face property handover delays and many options are available for the investors who are currently facing such situations. There are many issues raised in Dubai courts regarding delayed property handovers and they seek proper remedy for the delays. There are several different legal options available for handover delays but it would mainly depend upon terms mentioned in the contract.

If the delayed handover is within the force majeure (a clause in the contract that removes liability for unavoidable circumstances, such as catastrophes), then the purchaser will be unable to terminate the contractor or developer and/or claim any compensation for the delay.

In the case of when the property is delayed beyond the grace period mentioned in the sale and purchase agreement, then the purchaser can go for a claim for such delayed handover.

If the developer fails to perform duties laid out in the contract, the legal options available for the purchaser are as follows:

Termination of the agreement by the purchaser: The purchaser has the option to terminate the contract that was handed over as the handover was delayed even after the grace period mentioned in the contract. But still, it is important to take a look into the terms and conditions mentioned in the contract. Some of the possible reasons for termination include the following:

  • Failure of consideration by the developer
  • Non-performance of the obligation on behalf of the developer
  • Disability of performance

Claiming compensation for such delays: The purchaser can also claim compensation for such delays if such conditions are mentioned in the contract. The purchaser has to prove that such a delay has caused any harm or any substantial loss to the purchaser of the property. As per UAE law, the person can claim compensation for the amount paid for the following:

  • Deposit
  • Interest
  • Agent fees
  • Any additional amount
  • Any other amount accrued

Reasonable delay: The court may make the decision on the side of the purchaser if the property handover delay is for more than 2 years.  This is a kind of protection on the side of the purchaser so that a claim may be filed for a delay in the handover.

Other options for dealing with property delays

Alternative dispute resolution

The property dispute can also be settled amicably by seeking any of the dispute resolution methods. The case can be transferred to the dispute resolution center at Dubai Land Department or DLD. The DLD has access to all the records of development in the emirate. An expert team for dispute resolution can handle all the concerns regarding properties and delays in handover. Take note: the decision of the team is binding on all the parties.

Also Read

Litigation for Investments in Delayed Real Estate Projects

Options for the property developer for any breach by the purchaser

  • In case of any breach by a purchaser, the Dubai Land Department should be informed first of such breach.
  • Any agreement between the developer and purchaser should be agreed upon by other parties.
  • When the purchaser is not able to reach into a settlement with the developer, the department may issue an official notification regarding the completion of obligation.
  • The developer has several options to cancel the contract as well as also seek remedy on the completion of work.
  • The developer can retain the amount of money given by the investor for the project and continue with the project.
  • The developer can also inform the Dubai Land Department to auction the project and also collect any outstanding balance.

Take note: before going for a legal option, it is better to check whether the project is canceled by RERA. Real Estate Regulatory Authority may cancel projects if it finds acts against any rules or contravenes any regulation of the Dubai municipality.

Property lawyers in the UAE

If you are facing any relevant issues of property handover delays, then it is better to seek the legal opinions of experts which are lawyers. They can help you to review the contract and also help you by providing all of your options legally. We at HHS lawyers can help you deal with such property cases and all property-related disputes. You may contact us for further consultation.

Which department in Dubai deals with property issues?

A purchaser and a developer can consult regarding property-related cases with the Dubai Land Department. They have all the records of residential buildings and also they can help the developer and purchaser regarding property disputes.

Can Dubai authorities impose penalties for a delay in property handover?

Dubai authorities have the right to impose penalties for a reasonable delay even if the date of completion is mentioned or not mentioned in the terms of the contract.

Can I sue a builder for poor workmanship?

Yes, a purchaser may use a builder for poor workmanship. If the development contract allows the purchaser to assess the work and sue if dissatisfied, then the purchaser may proceed. Otherwise, a lawyer has to review the contract and assess the specific situation faced by the purchaser.

Hazim Darwish

Hazim Darwish, is a Senior Partner of HHS Lawyers in UAE. Practicing law for almost a decade, he has in-depth knowledge on UAE legislation with particular expertise on legal drafting, contract drafting, labor disputes, family law, and regulatory compliance for business organizations. Hazim Darwish also provides counsel on legal rights and obligations in the UAE to clients, including individuals and businesses subject to investigation or prosecution under Criminal Law by major regulators.