Dubai court orders real estate development firm to return Dhs286,527 to investment company

The Dubai Real Estate Court has ordered a real estate development company to return Dhs286,527 to an investment company.

This followed a dispute between the two parties concerning a property sale contract from 2017. The development company terminated the contract and resold the property after the buyer failed to pay the required instalments.

The details of the case date back to the plaintiff company's contract to purchase a property for a total value of Dhs2,653,200. The company paid approximately Dhs1,188,000 before stopping payment of the remaining instalments.

The company attributed this default to exceptional circumstances relating to the death of its Qatar-based representative in 2019. This resulted in the suspension of the company's legal procedures until the Probate Court issued a ruling in 2020 to transfer the owner's shares to the heirs.

The real estate developer confirmed that it had complied with all the terms of the contract and completed the project ahead of schedule.

Despite repeated notifications to the buyer to pay the overdue instalments, there was no response. The developer then sought the assistance of the Dubai Land Department, which issued a document validating the termination procedures. This allowed the developer to de-register the property in the buyer's name and return it to their ownership.

Dr. Alaa Nasr, the legal representative of the defendant company, stated that, after examining the report of the appointed expert and the submitted documents, the court decided that, in the interest of justice and balance between the rights of both parties, the developer is entitled to retain 30% of the unit's value, equivalent to Dhs795,960. This was especially pertinent given that it was proven that the developer had benefited from the amount paid and had later resold the unit.

Accordingly, the court ruled that the excess amount of Dhs286,527 should be refunded to the plaintiff company.

In its reasoning, the court affirmed that the plaintiff company has an independent legal personality and is not affected by the death of its representative. Therefore, these events cannot be considered force majeure or emergency circumstances that exempt it from fulfilling its obligations.