Dubai court cancels sale contract of a property worth Dhs1.2m, orders buyer to pay Dhs150,000 compensation

The Dubai Real Estate Court ruled to cancel the sale contract of a residential unit valued at Dhs1.2 million, revoke its registration in the buyer's name, and return it to the seller, in addition to obliging the buyer to pay compensation of Dhs150,000, after he buyer failed to pay the remaining installments due for the unit.

The details of the case date back to when the seller and buyer signed a sale agreement for a ready for-delivery unit within a residential project.

The buyer paid only about Dhs600,000 of the total value, then stopped paying the remaining installments, despite the unit being registered in his name with the Department of Land and Property and being declared ready for handover.

The case documents proved that the seller fulfilled all contractual obligations, including transferring ownership and completing registration procedures, while the buyer failed to pay the remaining price or take possession of the unit without a legitimate reason.

The court clarified that the general rules for sale contracts permit the cancellation of a contract if one party breaches a fundamental obligation which causes harm to the other party, and that the buyer's refusal to pay the remaining of the value of the unit caused direct material damages to the seller, which necessitated compensation for the damage.

The court then ordered the cancellation of the contract and the restoration of the situation to what it was before the contract was made, thereby canceling the unit's registration in the buyer's name and returning it to the seller, while obliging the buyer to pay compensation of Dhs150,000, and legal interest of 5% from the date the judgment becomes final until full payment, in addition to fees, expenses, and attorney’s fees.