Ask the law: My property was sold to a new buyer

Question:

A questioner from Dubai asks: I bought an off-plan property from a developer 3 years ago. I paid all my dues except for one installment due two months ago. Currently, I went to the developer to receive the property and pay the last installment.

However, the developer refused to receive the installment on the pretext that I was late in paying the last installment and that the property was sold to a new buyer.

My question is what is the position of the law on the behaviour of the developer and what is the appropriate action to take against him to obtain the property or recover the amounts I paid in addition to the compensation. Please advise.

Answer:

To answer this question, I would advise the questioner that:

The purchaser has the right to sell the property to another buyer in case he followed the procedures specified by the DLD and 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 states that:

a. Where a purchaser fails to fulfil his contractual obligations under an Off-plan Sale agreement concluded with a Developer, the following rules and procedures will apply:

1. The Developer must notify the DLD of the purchaser’s non-performance of his contractual obligations. This notification must be submitted on the form prescribed by the DLD for this purpose and must include the details of the Developer and purchaser; a description of the Real Property Unit subject of the Off-plan Sale agreement; a detailed account of the contractual obligations breached by the purchaser; and any other details determined by the DLD.

2. Promptly upon receipt of the notification and verification that the purchaser is in breach of his contractual obligations, the DLD must:

A. serves a thirty (30) days’ notice on the purchaser requiring him to fulfil his contractual obligations towards the Developer. The notice must be in writing and dated; and must be delivered to the purchaser either in person or by registered mail with acknowledgement of receipt, email, or any other means prescribed by the DLD; and

B. where possible, mediate an amicable settlement between the Developer and purchaser, in which case such a settlement must be attached as an addendum to the Off-plan Sale agreement and must be executed by the Developer and the purchaser.

3. If the notice period mentioned in sub-paragraph (a)(2)(A) of this Article expires and the purchaser fails to fulfil his contractual obligations or to reach a settlement with the Developer, the DLD will issue an official document in favour of the Developer confirming the following:

A. the Developer’s compliance with the procedures stipulated in paragraph (a) of this Article; and

B. the percentage of completion of the Real Property project subject of the Off-plan Sale agreement, calculated in accordance with the relevant standards and rules adopted by RERA.

4. Upon receiving the official document referred to in sub-paragraph (a)(3) of this Article, and based on the percentage of completion of the Real Property project, the Developer may take any of the following measures against the purchaser without recourse to courts or arbitration:

A. Where the percentage of completion of the Real Property project exceeds eighty percent (80%), the Developer may:

1. Maintain the Off-plan Sale agreement concluded with the purchaser, retain all amounts paid by the purchaser, and claim the balance of the value of the agreement from the purchaser;

2. request the DLD to sell the Real Property Unit, subject of the Off-plan Sale agreement, by public auction to collect the remaining amounts payable to the Developer; and hold the purchaser liable for the costs arising from the sale; or

3. Unilaterally terminate the Off-plan Sale agreement concluded with the purchaser, retain up to forty percent (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. In this case, the Developer must refund the amounts owed to the purchaser within one (1) year from the termination of the Off-plan Sale agreement or within sixty (60) days from the date of resale of the Real Property Unit to another purchaser, whichever occurs earlier.

B. Where the percentage of completion of the Real Property project is between sixty percent (60%) and eighty percent (80%), the Developer may unilaterally terminate the Off-plan Sale agreement concluded with the purchaser, retain up to forty percent (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. In this case, the Developer must refund the amounts owed to the purchaser within one (1) year from the termination of the Off-plan Sale agreement or within sixty (60) days from the date of resale of the Real Property Unit to another purchaser, whichever occurs earlier.

C. Where the Developer has commenced work on the Real Property project, having taken hold of the construction site and started construction works in accordance with the designs approved by the competent entities, and the percentage of completion of the Real Property project is less than sixty percent (60%), the Developer may unilaterally terminate the Off-plan Sale agreement concluded with the purchaser, retain up to twenty-five percent (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. In this case, the Developer must refund the amounts owed to the purchaser within one (1) year from the termination of the agreement or within sixty (60) days from the date of resale of the Real Property Unit to another purchaser, whichever occurs earlier.

The rules and procedures stipulated in this Article will not preclude the purchaser from having recourse to courts or arbitration which means that you have the right to file a case in front of the court which will decide about the case as per the documents and circumstances.