Dubai Court orders buyer to pay Dh1.68 million for breach of property contract

Dubai: The Dubai Real Estate Court has ordered the buyer of a property unit to pay Dh1.68 million to the seller, representing 80 percent of a Dh2.1 million deposit held by a real estate brokerage under a security cheque, Al Khaleej Arabic daily reported.

The court also ordered the buyer to pay annual interest of 5 percent from the date of the legal claim until full payment, as compensation for delaying completion of the purchase.

The seller filed suit seeking to terminate the sales contract, citing provisions in the agreement that stipulate a penalty of 10 percent of the total transaction value if the buyer withdraws after signing. Under the terms, 80 percent of that penalty goes to the seller and 20 percent to the broker. The claim also invoked Article 148 of the Civil Transactions Law.

Court filings show the property measuring 809.11 square metres and valued at Dh21 million was contracted in January 2025. The buyer paid a Dh2.1 million deposit via a security cheque held by the seller’s broker, with the remaining Dh18.9 million due upon registration of the property in the buyer’s name or through another secured payment method approved by the Dubai Land Department.

The contract was set to expire in mid-March 2025. Despite receiving an official warning before the deadline, the buyer failed to pay the balance or complete the deal. The seller then filed suit to confirm the contract’s termination and recover the amount owed.

Relying on the withdrawal penalty clause, the court awarded the seller Dh1.68 million, 80 percent of the deposit, noting that the brokerage did not request its 20 percent share.

Legal consultant Dr. Alaa Nasr, the seller’s legal representative, said the Civil Transactions Law treats a deposit as proof that the contract is binding and cannot be revoked unless otherwise stipulated by agreement or custom.