Dubai court orders real estate firm to pay investor Dhs50,000 for delaying the project

The Dubai Real Estate Court ordered a real estate company to pay Dhs50,000 to an investor as compensation for damages incurred due to a delay of nearly two years in delivering a residential unit, along with legal interest of 5% from the date the judgment becomes final until full payment, in addition to obliging the company to pay fees, expenses, and legal costs.

The details of the case date back to April 2020 when the investor contracted with the company to purchase a residential unit within a real estate project in Dubai's Jebel Ali Industrial Area 2 for Dhs395,000 for real estate investment purposes, with the unit to be delivered in the last quarter of 2022 according to the sales contract.

The investor clarified that he fulfilled all his financial obligations and paid the full value of the unit, but the company delayed completion and delivery for nearly two years, and did not transfer ownership of the unit to him until February 2025, which deprived him of the benefit of renting the property and achieving an investment return throughout the delay period.

The investor demanded that the company be obliged to compensate him for the loss of expected rental income during the delay period, based on the rental index issued by the Dubai Land Department (DLD), in addition to compensating him for the moral and material damages incurred.

During the sessions, the company pleaded that the sales contract allowed it to extend the completion period for up to 12 months. However, the court emphasised in its judgment that the case documents lacked proof that the investor was notified of the extension of the completion date before the expiry of the original agreed-upon date, noting that the notification sent later is not valid as it was received after the expiry of the delivery period specified in the contract.

The court also clarified that the company's delay in delivering the unit was a contractual error which entitled the investor to compensation.

Consequently, the court estimated the total compensation at Dhs50,000, based on the circumstances of the case and the damages incurred by the investor as a result of the delayed delivery and the loss of investment benefit from the property.