Dubai buyer wins fresh hearing in Dh4.6m hotel apartment dispute

Dubai: A Dubai property buyer who paid more than Dh4.6 million for what he believed was a hotel apartment has secured a fresh hearing before the Court of Appeal after discovering the unit handed over to him was classified as residential instead.

In a significant ruling, the Dubai Court of Cassation overturned an earlier appeal judgment that had dismissed the buyer’s claim to recover Dh1.55 million, finding that the lower court failed to properly address key contradictions in the evidence and objections raised against an expert report.

The dispute centres on a luxury property in Dubailand that was sold by a Dubai-based developer in October 2013. Court records show the buyer agreed to purchase the unit as a hotel apartment for Dh3.13 million and later paid additional service and maintenance charges, bringing the total amount paid to Dh4.69 million.

According to the buyer, the project was scheduled for completion in December 2015, but the handover was delayed. When the property was eventually delivered, he claimed he discovered the unit was residential rather than hotel-use — a difference he argued fundamentally altered the nature and value of the investment.

The buyer also alleged construction defects and a discrepancy in the unit’s actual area compared to what had been agreed in the contract.

The legal battle, which began in 2021, has passed through several stages before Dubai courts.

In 2022, the Dubai Court of First Instance ruled in the buyer’s favour, cancelling the sale agreement and ordering the developer to refund Dh4.69 million with interest. That judgment was initially upheld before later being overturned by the Court of Cassation.

The case then continued over an alternative claim filed by the buyer seeking Dh1.55 million, which he argued had been paid without legal basis.

In May 2025, the Court of First Instance accepted that claim, but the Dubai Court of Appeal later reversed the decision and dismissed it.

The buyer challenged the appeal ruling, arguing that the court had relied heavily on a supplementary expert report prepared using account statements submitted by the developer. He said those statements contradicted both an earlier expert report and a clearance certificate issued by the company confirming receipt of Dh4.69 million.

In its latest ruling, the Court of Cassation stressed that while courts are entitled to rely on expert reports, they must address serious objections raised by plaintiffs when those objections could influence the outcome of the case.

The court found that the appeal court failed to properly examine the buyer’s arguments, particularly the alleged inconsistencies between the original expert findings and the supplementary report.

Judges also noted the developer’s defence that the clearance certificate confirming the Dh4.69 million payment had been issued mistakenly by its accounts department.

The Court of Cassation ultimately overturned the appeal judgment and referred the case back to the Court of Appeal for reconsideration. It also ordered the developer to pay court costs and Dh2,000 in legal fees.

Legal experts say the dispute highlights the importance of precise property classifications and clear documentation in Dubai’s real estate market.

Dr Hasan Elhais, legal consultant at Amal Al Rashedi Lawyers and Legal Consultants, said the distinction between a hotel apartment and a residential unit is far from a minor contractual detail.

“The distinction between a hotel apartment and a residential unit is not a minor description. It may affect the buyer’s expected use of the property, its commercial value, the return on investment and the obligations attached to it,” he said.

“When a purchaser enters into a contract on the basis that the unit will have a particular use or classification, any alleged change in that use can become a central issue in determining whether the buyer received what was actually agreed.”

Dr Elhais added that the ruling also reinforces the importance of maintaining accurate records in real estate transactions.

“In real estate disputes, a clearance certificate, payment record or expert finding can carry significant weight,” he said. “If there is a contradiction between documents, the court must be able to see a clear path explaining which evidence was accepted, which was rejected and why.”