Homefront: ‘My property handover is delayed – can I cancel it and get a refund?'

The Dubai-based resident invested in an off-plan property that was meant to be finished by 2019

Dubai, United Arab Emirates, September 6, 2018.  PROBABLE BIG PICTURE.  Construction workers along the SZR road beside the Emirates Airlines Head Office.
Victor Besa/ The National
Section:  NA
Reporter:  Nawal Irhami
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I bought a property from a developer in Dubai in 2018. As per the sales and purchase agreement, the property’s handover date was December 2019.

On the date of handover, the developer asked me to pay the Oqood registration charge over and above all the payments I had made so far. I paid this fee on time.

However, the developer has neither registered the Oqood nor handed over the property to date. According to the Dubai Land Department website, the project is still active and shows a completion status of 55 per cent.

When I call the developer for updates, they claim the property will be handed over in three months, but there has been no progress since January 2020. They are only giving me false promises.

How can I withdraw my money from the developer and invest it in a ready apartment instead? OG, Dubai

When it comes to buying off-plan properties, it is quite common for developers to delay handing over a unit from the expected completion date.

Under normal circumstances, the law allows for a 12-month extension beyond the handover date cited in the SPA. In your case, this has been exceeded, although by a few months only.

I suspect that the developer will try to justify the construction delay by citing a force majeure clause due to the onset of the Covid-19 pandemic last year.

It will not be easy to cancel your sales contract and reclaim the money invested. There have been instances both in the past and now where developers will do everything possible to show that their project is progressing (although delayed by many years) because the DLD website shows it to be active.

Taking legal action against the developer will be a lengthy and costly process with no real guarantee of success, especially if the DLD shows that the project is still live despite the slow progress.

The developer will try to justify the construction delay by citing a force majeure clause due to the onset of the Covid-19 pandemic last year
Mario Volpi, sales and leasing manager, Engel & Volkers

Notwithstanding this, you are legally entitled to cancel the contract if the developer has not fulfilled their part as outlined in the SPA. You should thoroughly check the developer’s obligations in the SPA before deciding to file a case.

Communication is important as nobody wants to take anyone to court. It’s vital to initially engage in dialogue before taking further action.

We are a group of residents in a building in Dubai that is owned by a real estate company.

We are suffering from a few problems. Firstly, our building is infested with cockroaches. Also, the management introduces rules with no prior notice. For instance, they rolled out a new rule last week that building's parking will be rented out for Dh4,000 per slot annually.

In another issue, real estate agents are not responding to tenants whose rent contracts are set to expire. Once the contracts expire, tenants are being asked to vacate the property.

Also, the management is renewing contracts at higher rents without serving due notice to the tenant. They are being notified of the rent hike only 15 days before the lease expires.

Is this legal and what can we do? KA, Dubai

The law is clear on the relationship between tenants and landlords. From the way you describe what is happening in your building, it seems to go against the law.

Increases in rent are allowed only if the Real Estate Regulatory Agency’s rental price calculator confirms it. The landlord is then required to serve a 90-day notice to the tenant before the contract's expiry date.

Another point to note is that a rental contract automatically renews under the same terms and conditions as earlier, unless otherwise agreed by both parties. So if no communication takes place, no changes can be made to the rent contract.

I would advise you to file a case at the Rental Dispute Settlement Committee in Dubai. You will need to pay 3.5 per cent of the rental amount to file a case.

Here, you will be able to state all the instances where the landlord has not followed the law with reference to the arbitrary rental increase or any changes to the contract that are not legal.

Mario Volpi is the sales and leasing manager at Engel & Volkers. He has worked in the property sector for more than 35 years in London and Dubai. The opinions expressed do not constitute legal advice and are provided for information only. Please send any questions to mario.volpi@engelvoelkers.com

Updated: September 30, 2021, 4:00 AM