Developer ordered to refund Dh516,872 after Riviera project delay

Dubai: The Dubai Real Estate Court has ordered the cancellation of a residential property sale contract in a Riviera-area development after finding that the developer failed to meet its contractual obligations and delayed completion and handover of the unit.

In its ruling, the court directed the real estate company to refund Dh516,872 to the investor and pay Dh100,000 in compensation for material and moral damages. The developer was also ordered to bear court fees, litigation costs and legal expenses.

According to court records, the dispute arose from an off-plan property purchase agreement between an investor and a real estate developer for a residential unit valued at Dh1.722 million, payable in two instalments. The investor fulfilled his contractual obligations by paying the first instalment of Dh516,872, in addition to registration fees and related administrative charges.

However, official records and construction progress reports submitted to the court showed that the developer failed to adhere to the agreed construction schedule. The works had not reached a stage that would allow delivery of the unit within the contractual timeframe, leading to delays in project execution.

During proceedings, the developer argued that the contract allowed for an extension of the completion period and that construction was nearing completion. The court rejected this defence, finding that the delay exceeded the contractually agreed period and that the breach was clearly established by documentary evidence and progress reports.

The court ruled that the developer’s failure justified cancellation of the contract and ordered that both parties be returned to their pre-contractual positions, including repayment of all amounts paid. The compensation award reflected the investor’s loss of opportunity to invest his funds and benefit from the use of the property.

The judgment underscores the Dubai courts’ continued stance on protecting investors’ rights in off-plan property transactions where developers fail to meet delivery obligations.