Dubai court order: Property buyer must pay Dh1.54 million for pulling out of deal

Dubai: A Dubai court has ruled in favour of a property owner in a dispute over a failed real estate transaction, ordering a buyer to pay more than Dh1.54 million under a deposit-retention clause after she withdrew from completing the purchase.

The Dubai Court of First Instance (Real Estate Division) upheld the seller’s claim, confirming the termination of the sale agreement and directing the buyer to pay Dh1.54 million, along with court fees, legal expenses and lawyers’ fees.

Deal collapsed after missed deadline

Court records show that the dispute arose from a sale agreement involving a residential unit in Al Wasl.

The seller had agreed to transfer ownership of the property in exchange for a deposit of Dh2.2 million, with the remaining balance to be paid upon completion of the title transfer.

The buyer issued a cheque for the deposit, signalling her commitment to the deal.

However, she failed to meet the agreed deadline to complete the purchase and later requested an extension, citing delays in obtaining her Emirates ID and certain administrative approvals.

The court noted that these conditions were not part of the original agreement.

Seller granted extension, buyer failed to comply

According to the judgment, the seller acted in good faith and granted the buyer additional time to finalise the transaction.

Despite the extension, the buyer did not complete the required procedures or settle the outstanding balance.

She also failed to provide any evidence of circumstances beyond her control that prevented her from fulfilling her contractual obligations.

Court finds seller met obligations

The court reviewed documents including the sale contract, title deed and correspondence between both parties, and found that the seller had fulfilled all his obligations, including preparing the property for transfer and completing the necessary procedures.

In contrast, the buyer was found to have defaulted on her obligations and did not attend court hearings despite being legally notified.

Deposit clause decisive

In its ruling, the court highlighted that the contract contained clear provisions regarding the deposit, stating that in the event of the buyer’s breach, the seller is entitled to terminate the agreement and enforce deposit retention.

The agreement also specified that the deposit would be distributed, with 70 per cent allocated to the seller and 30 per cent to the real estate broker.

Legal basis

The court relied on provisions of the UAE Civil Transactions Law, which recognise a deposit as evidence of a binding contract. Where agreed as compensation for withdrawal, a buyer who backs out of the deal becomes liable to the seller under the deposit retention mechanism.

Separate case rejected

The court also rejected a request to combine the case with another lawsuit, ruling that there was no sufficient legal connection. It clarified that the separate case related to a brokerage agreement and fell outside the scope of the dispute.