Investors back out of a land deal, Dubai court orders them to pay Dhs1.72m to sellers

Two investors backed out of completing a deal to purchase a plot of land worth Dhs17.2 million despite signing the sale contract, and also failed to pay the deposit cheque of Dhs1.72 million, so the sellers resorted to the Real Estate Court in Dubai to settle the dispute.

According to the case file, the court ruled in absentia to obligate the buyers jointly to pay the sellers Dhs1.72, with a legal interest of 5% annually from the date of the judicial claim until full payment, besides fees and expenses of the lawsuit and legal attorney fees.

Details of the case date back to the time when two owners of a plot of land in Saih Shuaib area of Dubai, filed a lawsuit requesting the annulment of the sale contract signed with two investors and obligating them to pay the deposit value they had to pay, based on their breach of their contractual obligations.

The court clarified that the sale contract concluded in July 2025 stipulated the payment of a deposit of 10% of the deal value upon signing the contract, provided that the full price would be paid within 45 days, but the buyers did not commit to payment within the specified period.

The court also indicated that the deposit is considered conclusive evidence of the contract, and that the buyer's failure to pay deposit results in losing the deal, in accordance with established law and judicial rulings.

The court also rejected the defendants' arguments that the sellers were not entitled to the deposit, emphasising that the contract was clear when arranging obligations, and that non-payment without justification was a breach which allows the sellers to retain the deposit, with a legal interest of 5% annually because the amount is fixed and known.