Dubai court obliges an investor to pay Dhs359,000 to real estate firms for not paying installments on time

The Civil Court in Dubai has ordered a real estate unit investor to pay Dhs359,000 to a real estate development company, after she failed to pay three outstanding installments for the unit, in addition to compensation for late payment, and a legal interest of 5% annually until the full amount is paid.

The details of the case date back to when two real estate companies filed a lawsuit against an investor, demanding that she be compelled to pay Dhs359,000 in overdue installments and contractual penalties resulting from late payment, in addition to legal interest, fees, and expenses.

The two companies clarified that the appellee entered into a contract in January 2022 to purchase a real estate unit for a total price of Dhs1.2 million, in addition to VAT and registration fees, with payment to be made according to a specific installment schedule in the contract.

The two companies added that the unit was registered in her name with the Land Department in April 2022.

According to the lawsuit documents, the investor paid most of the unit's value, but she stopped payments after the ninth installment, which resulted in three outstanding installments totaling Dhs139,993 until November 2025, despite the completion of the real estate project, delivery of the unit, and her official notification of its readiness for handover.

The two companies indicated that they sent a legal notice to the investor and granted her the legal period for payment, but she did not respond, which prompted them to resort to the judiciary after an expert report affirmed the entitlement to the claimed amounts.

The court clarified that the unit in dispute was fully completed before the sale contract was concluded, and that it was registered in the appellee's name.

The court relied on the expert report and the submitted documents, which proved that the appellee had paid more than Dhs1.16 million of the unit's value and registration fees, before stopping payment of the tenth, eleventh, and twelfth installments, totaling Dhs139,993.

The court also found that the sale contract included a clear penalty clause stipulating a late payment fine of 3% on outstanding unpaid amounts, and the expert report concluded that a contractual compensation of Dhs219,000 was due as a result of the late payment, which the appellee did not dispute, as she failed to attend the lawsuit.

Based on this, the court compelled her to pay Dhs139,993 for the overdue installments, and Dhs219,000 as compensation for late payment, with a legal interest of 5% annually from the date of the judicial claim until full payment, and also ordered her to pay the fees, expenses, and legal costs.