Dubai: Real estate broker ordered to repay Dh4 million for ‘phantom’ project sale

Dubai: Two Arab investors, a man and a woman, who sold their properties to invest in what they were told was a lucrative real estate venture have won a civil case against a broker who failed to honour his promises and contracts, with the Dubai Civil Court ordering him to repay Dh4,057,815 plus interest, Emarat Al Youm reported. 

According to court documents, the plaintiffs transferred more than Dh3.7 million to the defendant, the owner of a real estate brokerage firm, under two separate investment agreements. The woman was promised an annual return of 9 per cent and the man 6 per cent. 

However, after several months, the broker stopped paying profits despite written acknowledgments and messages confirming the validity of the contracts.

The plaintiffs presented official documents, including bank transfers, receipts, email correspondence, and copies of the signed agreements, as well as property sale deeds proving they had sold their real estate to fund the investment. Despite this evidence, the defendant neither returned their capital nor paid the agreed-upon returns.

A court-appointed financial expert confirmed that both investors had fulfilled their contractual obligations and transferred the agreed investment amounts, while the defendant failed to pay the promised annual profits. 

The expert’s report found that the woman was owed Dh2.7 million in principal and Dh297,000 in unpaid profits up to August 2025, while the man was owed Dh1.06 million, including principal and accrued returns.

The report also noted that the company which received the funds was a sole proprietorship owned by the defendant, meaning its finances were not separate from his personal assets, making him personally liable for the debts.

In its ruling, the court cited the UAE Civil Transactions Law, which states that contracts are binding on both parties and that any breach entitles the affected party to seek termination and recovery of payments. The court found the investment contracts valid and binding, ruling that the defendant had breached them by failing to pay profits, and therefore must return the full investment amounts with accrued returns.

The court ordered the broker to repay Dh4,057,815 to the two investors, with 5 per cent annual interest from the date of the claim until full settlement. 

He was also ordered to pay legal costs and Dh2,000 in attorney’s fees, while other compensation requests were dismissed.