Question.
A questioner from Dubai asks: 4 years ago, I bought a property from one of the developers, and according to the purchase contract, delivery will be in 2022. Currently, the completion rate is around 60%, and I heard that the developer may falter and not complete the project. Currently I am being asked to pay an installment. My question, do I have the legal right to stop paying the installment? What is the appropriate action to take against the developer, because I want to terminate the contract and return all payments with compensation? Please advise.
Answer.
To answer this question, I would advise the questioner that:
The contract, as per Article 246 & 272 of the Civil Transactions law, shall be implemented, according to the provisions contained therein and in a manner consistent with the requirements of good faith. In bilateral contracts, if one of the parties does not perform his contractual obligations, the other party may, after serving a formal notification to the debtor, demand the performance of the contract or its termination. The judge may order the debtor immediate performance of the contract or grant him specified additional time, as he may order termination with damages, in any case, if deemed justified.
Moreover, it is decided as per the Higher Court in its Jurisdiction no. 647/2021 of Real Estate that (“Estimating the justifications for annulment of the binding contract for both sides, deducing the negligent side in the contract or denying negligence in it, proving or denying the contractual error on the part of either party to the contract, appreciating the evidence and documents presented in the case, balancing them, is the subject matter of the court.
"If there is a requirement for compensation, the judge shall estimate it in accordance with the general rules that place the burden of proving and verifying the damage and its amount upon the creditor. It is also decided that the failure of the contractor to implement his obligation or the delay in it is in itself a mistake that requires his responsibility”).
Based on the above mentioned, you have the right to stop paying the installments since the contractor is late and did not accomplish his obligations on time.
The appropriate action to be taken is to file a complaint in the Land Department against the developer and request for the sale contract’s termination with the returning of the paid price and compensation.
In case the matter is not solved amicably, you have the right to recourse to courts or arbitration depending on the jurisdiction you had agreed upon in the sale contract as per 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 (“The rules and procedures stipulated in this Article will not preclude the purchaser from having recourse to courts or arbitration”).
