Do you and a real estate company have a disagreement? Or are you looking to invest in real estate in Dubai or another UAE emirate? Then this essay, which focuses on one of the most crucial aspects that any buyer or investor needs to know—namely, what claims and how much money can one make in real estate disputes and how under UAE law—is a must-read for you.
You must understand real estate law in the UAE before making any real estate investment or resolving a real estate dispute.
Read More About: Establishing a Company in the UAE – The Fundamentals
Rights of investor/buyer in the UAE when property handover delayed in accordance with the UAE Real Estate Law
Dive into the world of contracts, where the intentions of businesses come to life. Imagine a crucial moment when both parties aren’t just agreeing but shaping their expectations. Now, here’s the catch – if things go wrong, it’s not just about blame; it’s about stating what each side needs. Enter the hero: damages. They’re like financial superheroes, saving a party from losses caused by a contract partner’s mistake. Get ready for a drama where contracts are the script, and damages play the hero in this exciting business tale.
As per the laws one can claim for the amount he/she has paid as:
- Deposit;
- Interest (Contractual Interest plus legal interest) ;
- Agent fees;
- Bank charges;
- Additional/Extra amount; and
- Any other payment he/she has accrued pertaining to the Agreement.
Read more about 7 Examples of Money Laundering Cases in Dubai
Real Estate Disputes Resolution
To get your money back for any issues mentioned earlier, you can start a dispute using various methods available in the UAE. Before any problems occur, most contracts clearly state what you can claim. The UAE Civil Code, specifically Article 390(1), lets parties decide the amount of damages upfront. However, Article 390(2) gives the court the power to adjust this amount based on the actual loss suffered, following a request from one party. It’s crucial to know that Article 390(2) is binding, and neither party can bypass it. In UAE courts, they often use this power (Article 390(2)) to change the agreed-upon damages, aligning with Sharia principles where compensation should match the actual loss endured.
If the contract doesn’t set compensation, the court steps in. Article 389 of the UAE Civil Code explains that if the amount isn’t fixed by the laws or in the contract, the judge decides on a fair amount that matches the damage suffered by the party.
Dubai Court of Cessation In the realm of contract troubles, the UAE Civil Code, under Article 292, permits compensation for lost profits. But here’s the twist: the court green-lights this only when future damages are a sure thing, not merely a guess. The Dubai Court of Cessation takes it a step further, backing compensation for missed opportunities caused by contract termination. Surprisingly, even if the opportunity is just a potential gain, the court acknowledges the loss and insists on fair compensation.
May you like to read Is money laundry legal in Dubai?
Procedures followed in real estate disputes
Because contracts involve mutual obligations, one party can suffer if the other plans not to follow through. To avoid waiting and minimize losses, the affected party can choose to end the contract early.
To end the agreement, submit a termination application. According to Article 272 of the UAE Civil Code, if one party doesn’t fulfill their duties, the other can, after giving notice, demand either performance or cancellation. So, be sure to send a termination notice for the contract.
When the court decides whether to end a contract or order compensation and performance, it looks at two things: how big the breach is and if the agreement can still happen. For termination, the Claimant needs to meet all the legal requirements.
In a property agreement, the main commitment is to complete construction and deliver the property by the agreed-upon date. Time is of the essence, and any delay in meeting these obligations is a significant breach, justifying termination and resulting in complete non-performance.
Termination Rights: Reasons to End a Contract and What Happens Next
The grounds on which the Claimant can seek termination are listed below; these legal grounds are not exhaustive:
- Total failure of consideration by the Developer;
- Non-performance of the contractual obligation;
- Impossibility of the performance of contractual obligation; and
- Unjust enrichment of the Developer
Once the agreement is terminated, the court refunds all the money paid and may provide compensation, per Article 274 of the UAE Civil Code. This article dictates that in case of contract cancellation, the parties should revert to their pre-contract state, and if that’s not feasible, compensation is mandated. The retrieval process for the awarded money, termed the “Execution procedure,” typically spans three to six months, contingent on the involvement of the other party.
Whether you’re about to sign a real estate deal or facing significant delays, it’s wise to partner with a top-notch real estate law firm in the UAE. Khairallah Advocates & Legal Consultants boast a stellar record in effectively resolving real estate disputes. If you’re keen on safeguarding your real estate investor rights or addressing claims and disputes, don’t hesitate to get in touch with us. Your peace of mind matters, and we’re here to help.
Learn More About: Cheque Bounce Law in the UAE & Defending Cheque Bounce Lawsuits
FAQ about real estate disputes in the UAE
1-What does a real estate Lawyer do?
A real estate lawyer specialises on issues relating to real estate, such as home purchases and sales, ownership, management, compliance, disputes, and title problems.
2-What should a real estate lawyer know?
An attorney who specialises in real estate is qualified to draught and examine purchase agreements, mortgage documents, title documents, and transfer documents. The buyer will always be present at the closing with the real estate attorney who was hired to manage the deal.
3-What should I ask a property lawyer?
Thankfully, if you ask these eight questions, selecting a real estate attorney doesn’t have to be a difficult procedure.
- What Qualifications Do You Possess?
- Which experiences do you possess?
- What is your fee schedule?
- Do You Serve Many Clients?
Khairallah Advocates & Legal Consultants works to provide various legal services with experienced experts and lawyers.
Explore More About: Marriage Dissolution and Separation in Indian Christian Law, as well as the Authenticity of Husband’s Request to Drop Wife’s Custody of their Son Due to His Departure to India.
