Your search results
Will Property Developers In Dubai Compensate For Delays

Will Property Developers in Dubai Compensate for Delays?

Posted by Content Writer on August 22, 2023

A query has been raised regarding the compensation clauses in property agreements in Dubai. Specifically, what can be done if a developer does not deliver a property as per the agreed timeline?

Understanding the Legal Framework

For those considering an investment in off-plan properties in Dubai, it’s essential to be aware of the legal provisions that govern such transactions. Key regulations include Law No. 13 of 2008, Law No. 19 of 2017, and Executive Council Resolution No. 6 of 2010. These laws emphasize the importance of registering off-plan properties with the Dubai Land Department (DLD) to ensure the rights of both the developer and the buyer.

Key Points to Consider

  1. Registration: Developers are mandated to register any off-plan property sales in the Interim Real Property Register of the DLD. Failing to do so can render the sale null and void.
  1. Obligations: Once a property is completed and all financial commitments from the buyer are met, developers are obligated to hand over the property to the buyer.
  1. Dispute Resolution: In case of disagreements between the developer and buyer, the DLD can step in to mediate and help reach an amicable solution. If this fails, buyers have the right to approach the competent court in Dubai.
  1. Force Majeure: There are instances where developers might be exempt from fulfilling the terms of the Sale Purchase Agreement (SPA) due to unforeseen circumstances beyond their control, such as public interest expropriations or project suspensions by authorities.
  1. Sale Purchase Agreement (SPA): Buyers should ensure that the SPA clearly mentions the property’s expected completion date. It’s also advisable to consult with a legal expert to understand the possibility of including a compensation clause in the SPA for any breaches, especially related to delays.
  1. Developer Defaults: If a developer fails to deliver the property by the agreed date, buyers can request the DLD to register the property in their name. They also have the option to file a complaint with the DLD or initiate a civil case against the developer.
  1. Project Cancellation: If a project gets canceled by either Rera or the Dubai Court, developers are required to refund all payments made by the buyers.

In conclusion, while investing in off-plan properties in Dubai, it’s crucial to be well-informed about your rights and the developer’s obligations. Always ensure that all agreements are in line with the governing laws and seek legal counsel when in doubt.


Compare Listings