Ask the law: I bought a property off-plan, paid 80%, then lost my job

Question:

A questioner from Dubai asks: Two years ago, I bought an off-plan property from one of the developers, and so far I have paid 80 per cent of the value of the property, but now I have lost my job and cannot pay the last installment due to the developer.

Accordingly, I asked the developer to allow me to sell the property. The developer refused and said that according to the purchase contract, I cannot sell until after completing the project and receiving the property. The developer also does not accept the termination of the purchase agreement. What is the legal position on the developer’s behaviour in this case, and will I lose all the amounts I paid? Please advise.

Answer:

I would advise the following:

You are bound with the purchase agreement terms and conditions unless agreed later otherwise between both of you. So, you will not be able to sell it to another person until after completing the project and receiving the property. The off-plan property, as per law, should be registered under your name in the initial registry which needs the approval of the developer to transfer the property to the other buyer. 


In case you did not fulfill your obligations, the money you will lose depends on the percentage of completion of the Real Property project achieved (Article 11 of the Law No. (19) Of 2020 Amending Law No. (13) Of 2008 Regulating the Interim Real Property Register in the Emirate of Dubai) which is distributed as follows: 


A. “Where the percentage of completion of the Real Property project exceeds 80 per cent (80%), the Developer may retain up to 40 per cent (40%) of the value of the Real Property Unit stipulated in the Off-plan Sale agreement, and refund any amounts in excess of this to the purchaser.

B.  Where the percentage of completion of the Real Property project is between 60 per cent (60%) and 80 per cent (80%), the Developer may retain up to 40 per cent (40%) of the value of the Real Property Unit stipulated in the Off-plan Sale agreement, and refund any amounts in excess of this to the purchaser.

C.   Where the percentage of completion of the Real Property project is less than 60 per cent (60%), the Developer may retain up to 25 per cent (25%) of the value of the Real Property Unit stipulated in the Off-plan Sale agreement, and refund any amounts in excess of this to the purchaser.

We advise you to notify the Land Department (DLD) in order to mediate between you and the developer and settle the matter amicably — either to urge the developer to accept the new buyer, or to provide you with a new payment plan.