Dubai court orders investor to pay Dhs1 million for failing to receive hotel unit

Dubai Real Estate Court obligated an investor in a hotel unit to pay Dhs935,000 to a real estate development company plus Dhs148,330 as a penalty for delay in receiving the unit on the specified date.

This came after the defendant breached her contractual obligations by failing to receive the unit, which had been ready for handover for more than two years.

The case dated back to a sale and purchase agreement concluded in March 2016, under which the defendant purchased a hotel unit for Dhs1.435 million, while the developer registered the unit in the investor’s name in the initial register and completed the project according to the completion certificate issued by the competent authorities.

The plaintiff stated in its lawsuit that it officially notified the defendant that the unit had been ready for possession since July 2023 and asked her to pay the outstanding amounts to complete the handover procedures.

The defendant, however, refused to appear, receive the unit and pay the dues, which prompted the company to resort to the judiciary and request the appointment of an expert to determine the outstanding amounts owed by the defendant due to her breach of her contractual obligations.

The expert’s report concluded that the defendant had failed to fulfill her obligations and that the total amount owed by her was Dhs935,000 including fines for late payment of installments, delay penalties in receiving the unit and fees for government services as stipulated in the contract.

During the proceedings, the plaintiff submitted the sale and purchase agreement, a notice of unit readiness and the approved expert’s report, while the defendant failed to attend the sessions despite being legally notified, which the court considered evidence that there was nothing to invalidate the plaintiff’s claims.

According to the court, a buyer is obligated to pay the price, fees and any applicable penalties if they fail to fulfill their obligations and that a contract is binding on the contracting parties, provided it is valid and concluded in accordance with the law. The court was satisfied with the expert’s report, which indicated that the amounts owed by the defendant were indeed due, particularly because the unit was ready for handover and there was no justification for the defendant’s refusal to receive it.

The court also ruled that the defendant must pay an additional fine of Dhs148,330 for the delay in receiving the unit from August 2025 until January 2026 plus a legal interest at 5 per cent per annum from the date of the lawsuit until full payment of the amounts awarded.

The court ordered the defendant to pay the incurred charges, expenses and attorney’s fees but rejected all other requests, particularly the claim for future fines for periods subsequent to the date of the ruling.