Buyer ends up losing Dhs4.24m of down payment in Dubai real estate deal

A buyer withdrew from a Dhs53-million real estate transaction on Palm Jumeirah by failing to pay the remaining balance and neglecting to complete the registration procedures by the agreed-upon deadline even though the seller had provided all required documentation and obtained a no-objection certificate.

Dubai Real Estate Court ruled that the sales contract had expired and ordered the buyer to pay the seller Dhs4.24 million that represented 80 per cent of the deposit along with 5 per cent annual interest calculated from the date the legal claim was filed until full payment is made.

The case dated back to July 2026, when the seller agreed with the buyer under the unified sales contract to sell a property on Palm Jumeirah for Dhs53 million, provided that the buyer would pay a deposit of Dhs5.3 million upon signing the contract and the remaining amount of Dhs47.7 million by a manager’s cheque upon registration.

The seller filed a lawsuit in which he requested the court to rescind the contract and order the buyer to pay Dhs4.24 million, equivalent to 80 per cent of the down payment in accordance with the agreed-upon additional terms along with 9 per cent statutory interest.

The seller stated that he had fulfilled his contractual obligations and obtained a no-objection certificate and the necessary ownership transfer documentation but the buyer failed to pay the remaining balance or appear to finalize the sale by the deadline set for last July, noting that no agreement was reached between the parties to extend the contract.

The defendant neither attended the hearings for the case, nor submitted any statements of defence, while the seller presented the sales contract, the property title deed, a no-objection certificate and a formal notice addressed to the buyer.

The court stated that the sale agreement contained an explicit provision designating the earnest money as a penalty for withdrawal. Furthermore, the additional terms stipulated that in the event of a material breach of obligations by the buyer, the seller would be entitled to 80 per cent of the earnest money with the remaining portion allocated to the real estate broker, it added.

The court was satisfied that it was the buyer who withdrew from completing the transaction after failing to pay the remainder of the purchase price by the agreed-upon deadline and that the seller had fulfilled his own obligations. Consequently, the seller became entitled to the specified portion of the earnest money.