Dubai court terminates sale of residential unit worth Dhs1.72m over breach of contract

Real Estate Court in Dubai annulled the sale contract of a residential unit in a project in the Riviera area, which was concluded between an investor and a real estate company, after the company breached its obligations and delayed in completing the project and delivering the contracted unit.

The court also ordered the refund of Dhs516,872 to the investor, in addition to Dhs100,000 as compensation for material and moral damages incurred, obliging the company to pay the fees, expenses, and lawyers fees.

According to the case file, an investor concluded an agreement to purchase a residential unit within a real estate project under development, with a total value of Dhs1,722,000, with an agreement to pay its value in two installments, where he fulfilled his contractual obligations and paid the first installment of Dhs516,872, in addition to registration fees and administrative procedures related to the unit.

The lawsuit documents indicated that the real estate company received the agreed-upon amounts without adhering to the timeline for completing the project, as the official data and progress reports showed that the construction work had not reached the stage that would allow the unit to be delivered on the specified date, which led to the project's failure.

During the consideration of the dispute, the defendant company argued that the contract allows for extending the completion period and that the percentage of work was approaching completion, but the court concluded that the delay exceeded the period agreed upon contractually and that the breach of performance was proved through the documents and reports.

The court concluded that this breach justifies the annulment of the contract and the return of the two parties to the state they were in before the contract, with the refund of the paid amounts and compensation for the investor for depriving him of investing his money and benefiting from the unit subject to the contract.