Question: Two years ago, I bought a property from a developer in Dubai. I used to pay the instalments regularly. However, due to a situation that was beyond my control, I could not continue paying the instalments. The developer has refused to give me a revised deadline to clear the remaining amount and has instead sent me a message, informing me about the termination of contract and that the amount that I had paid would be considered as compensation for the payment default. My question is: Does the developer have any legal right to terminate the contract because I had stopped paying the instalments?
Answer: First of all, the developer is within his rights to terminate the purchase agreement, given the fact that purchase agreements are usually made in a way that allows the seller the right to terminate the agreement in case of nonpayment, without taking into consideration the reasons or circumstances behind the nonpayment. The way to terminate the contract differs depending upon whether the property is a ready unit or an off-plan one.
Paragraph (a) of Article (11) of Law No (19) of 2017, Amending Law No (13) of 2008, Regulating the Interim Real Property Register in the Emirate of Dubai stipulates the rules and procedures that must be followed where a purchaser fails to fulfil his or her contractual obligations under an off-plan sale agreement concluded with a developer. The article states the actions to be taken by both DLD [Dubai Land Department] and the developer in the event of the purchaser’s non-performance of contractual obligations — particularly defaulting in paying the instalments of the price of the Real Property Unit on its due dates. These actions will be taken as follows:
1. The developer must notify DLD of the purchaser’s non-performance of contractual obligations.
2. Promptly, upon receipt of the notification and verifying that the purchaser is in breach of contractual obligations, DLD must:
A. Serve a thirty (30) days’ notice to the purchaser, requiring him to fulfil the 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,
3. If the notice period mentioned in sub-paragraph (a)(2)(A) of this Article expires and the purchaser fails to fulfil his or her contractual obligations or to reach a settlement with the developer, then 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 Unit subject to the Off-plan Sale Agreement, calculated in accordance with the relevant standards and rules adopted by RERA [Real Estate Regulatory Authority].
4. Upon receiving the official document referred to in sub-paragraph (a)(3) of this Article, and based on the percentage of completion, 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 Unit exceeds eighty per cent (80%), the Developer may:
1. Maintain the Off-plan Sale agreement concluded with the purchaser.
2. Request DLD to sell the Real Property Unit; and hold the purchaser liable for the costs arising from the sale; or
3. Unilaterally terminate the Off-plan Sale Agreement, retain up to forty per cent (40%) of the value of the Real Property Unit stipulated in the Off-plan Sale Agreement and refund any amount in excess of this 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 unit to another purchaser, whichever occurs earlier.
B. Where the percentage of completion of the Real Property Unit is between sixty percent (60%) and eighty percent (80%), the Developer may unilaterally terminate the agreement and retain up to forty percent (40%) of the value of the Real Property Unit stipulated in the Off-plan Sale agreement,
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 Unit is less than sixty percent (60%), the Developer may unilaterally terminate the Off-plan Sale agreement, retain up to twenty-five percent (25%) of the value of the Real Property Unit stipulated in the Off-plan Sale agreement.
Paragraph (c): The rules and procedures stipulated in this Article do not apply to land sale agreements that do not involve any Off-plan Sale. Land sale will continue to be governed by the terms of the land sale agreements concluded by the parties thereto.
Paragraph (f): The rules and procedures stipulated in this Article will not preclude the purchaser from having recourse to courts or arbitration where the developer abuses any of his powers under this Article.
Eviction of tenant
Question: Ten months ago, I had rented my apartment to someone and according to the lease contract, the lease term was for one year only. Three months ago, I sent an email to the tenant, asking him to vacate the apartment at the end of the contract. However, two weeks ago, he replied that he would not vacate and would like to renew the contract. My question is: Am I legally entitled, according to the lease contract, to seek eviction of the tenant?
Answer: Causes for eviction are stated in Article 25 of Law Regulating Relationship between Landlords and Tenants in the Emirate of Dubai, No 26 of 2007, which is as follows:
1. The landlord may demand eviction of the tenant prior to expiry of the tenancy period in the following cases:
A) If the tenant fails to pay the rent, or part thereof, within thirty (30) days of the landlord’s notification seeking payment.
B) If tenant subleases the property, or part thereof, without the landlord’s written approval and in such case eviction shall be applicable to the subtenant, and his or her right to refer to the tenant for compensation payment shall be reserved.
C) If the tenant uses, or allows others to use, the property for illegal or immoral activities.
D) If the tenant makes changes that endanger the safety of the property in a way that it cannot be restored to its original condition or if he or she causes damage to the property intentionally or due to his or her gross negligence to take proper precautions or if he or she allows others to cause such damage.
E) If the tenant uses the property for purposes other than the purpose it was leased for or if he or she uses the property in a way that violates planning, building and land usage regulations (http://www.rpdubai.com)
F) If the property is in danger of collapse, provided the landlord must prove such a condition by way of a technical report attested by Dubai Municipality.
G) If the tenant fails to observe legal obligations or tenancy contract conditions within (30) days from the date of notification issued by the landlord to abide by such obligations or conditions.
2. The landlord may demand eviction of the tenant upon expiry of the tenancy contract in the following cases:
A) If development requirements in the emirate require demolition and reconstruction of the property in accordance with government authority’s instructions.
B) If the property requires renovation or comprehensive maintenance that cannot be executed while the tenant is occupying the property, provided that a technical report attested by Dubai Municipality is submitted to this effect.
C) If the landlord wishes to demolish the property for reconstruct it or decides to add new construction features that prevent the tenant from benefiting from the leased property, provided that necessary licences are obtained in advance.
D) If the landlord wishes to take possession of the property for use by him or her personally or by his or her next-of-kin of first degree.
However, in all the above mentioned circumstances, the landlord must notify the tenant about the reasons behind eviction at least ninety (90) days prior to the expiry date of the tenancy contract.