Ask the Law: Can buyer seek termination of property purchase contract upon losing job?
Worker with a year or more in service, is entitled to end-of-service benefits in UAE
Property purchase contract
Question: A year ago, I purchased a property from a developer through bank financing. However, a month ago, I lost my job. I can no longer continue with my financial commitments with the developer as I currently do not have a monthly income. Am I legally entitled to request for cancellation of the contract and ask for a refund of the amount I have already paid? Please advise
Answer: You have the right to terminate the purchase contract, but you may not get back all the amount paid so far because the contract termination will be at your own responsibility. You should refer to the conditions mentioned in the purchase agreement regarding termination and compensation, which all property contracts usually contain.
As a general rule, where a purchaser fails to fulfil his or her contractual obligations under an off-plan sale agreement concluded with a developer and according to Law No (19) of 2020, Amending Law No (13) of 2008, Regulating the Interim Real Property Register in the emirate of Dubai, the purchaser may face the following:
A) Where the percentage of completion of the property project exceeds 80 per cent of the work, the developer may terminate the off-plan sale agreement concluded with the purchaser, retain up to 40 per cent of the value of the unit stipulated in the off-plan sale agreement and refund any amount in excess of this to the purchaser.
B) Where the percentage of completion of the Real Property project is between 60 per cent and 80 per cent, the developer may unilaterally terminate the off-plan sale agreement concluded with the purchaser, retain up to 40 per cent of the value of the unit stipulated in the off-plan sale agreement and refund any amount in excess of this to the purchaser.
C) Where the percentage of completion of the project is less than 60 per cent, the developer may unilaterally terminate the off-plan sale agreement concluded with the purchaser, retain up to 25 per cent of the value of the unit stipulated in the off-plan sale agreement and refund any amount in excess of this to the purchaser.
D) Where the developer has not commenced work on the project for any reason beyond his control, without negligence or omission on his part, or where the project is cancelled pursuant to a final reasoned decision of RERA [Real Estate Regulatory Authority], the developer must refund all payments made by the purchasers, in accordance with the procedures and rules stipulated in Law No (8) of 2007. As a conclusion, the rules and procedures stipulated in this Article will not preclude the purchaser from having recourse to courts and the court will decide on this matter while reviewing the documents included in the purchase agreement.
End-of-service benefits
Question: I am a company owner, I have an employee who has worked with me for 15 years and has submitted his resignation. He has requested for end-of-service benefits. Is there a maximum amount for end-of-service benefits? Does he have the right to claim overtime and annual leave for the previous two years? Please advise.
Answer: According to Article 51 of the new UAE Labour Law, a full-time expatriate worker, who has completed a year or more in continuous service, shall be entitled to end-of-service benefits at the end of his or her service, calculated according to the basic wage as per the following:
A) wage of 21 days for each year of the first five years of service.
Plus B) Wage of 30 days for each year exceeding such period.
The expatriate worker shall be entitled to a benefit for parts of the year in proportion to the period spent at work, provided that he or she has completed one year of continuous service in the company. The unpaid days of absence from work shall not be included in the calculation of the service term. It is based on the foregoing that the end-of-service benefits for the expatriate worker in its entirety does not exceed two years’ wage.
As for the overtime, he or she doesn’t have the right to claim for two years according to Article 54 of the law, which states: ‘The case for any of the rights accruing to the worker under the provisions of this Decree-Law shall not be heard after the lapse of one year from the date of entitlement to the right in question.’
Annual leave
Regarding the annual leave, he or she has the right to claim for the last two years, according to Article 29 of the law that states: ‘The worker shall be entitled to a wage for the accrued leave days if he or she quits work before using them, regardless of the leave duration, with respect to the period for which he or she did not obtain his leave. He or she shall also be entitled to receive leave wage for parts of the year in proportion to the period he or she spent in work and it shall be calculated according to the basic wage. The employer may not prevent the worker from benefiting from his or her annual leave accrued for more than two years, unless the worker wishes to carry it forward or receive a cash allowance for it, in accordance with the regulations in force at the establishment and the Implementing Regulation hereof.’