The Debt Panel: 'We gave $68,000 to a friend to buy land but he put it in his name'

The Abu Dhabi resident wants his money back but has learnt that the land is under dispute and cannot be sold until it is legally resolved

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We are a group of friends in Abu Dhabi. We saved Dh5,000 ($1,361) each every month for five years and cumulatively invested Dh250,000 to purchase a plot of land in our home country of Bangladesh in 2019.

This was done at the behest of one of our friends, who claimed to be investment savvy. We trusted him implicitly and verbally agreed for him to manage our finances in this deal.

However, we were recently trying to sell the property and realised that it is a disputed plot of land. The matter is in court now and our money is stuck. We agreed to invest the money after our friend said he had done the due diligence on the investment.

We are all in a quandary now. Discussing finances among my friends is proving to be awkward, but it is our hard-earned money. Is there any way we can make our friend pay us back?

We all believe he owes us money after convincing us to invest in this transaction. However, there is no legal document that proves our ownership in the property since the plot is in our friend’s name. It was all done in good faith.

Moreover, our friend does not seem apologetic and believes he is not solely responsible for the loss incurred. Please advise us on what our next course of action should be. RA, Abu Dhabi

Debt panellist 1: Hazeem Balbaa, litigation associate at BSA Ahmad Bin Hezeem & Associates

Ideally, the investors should have registered the property jointly as this would have allowed them to prove their ownership interest without any dispute. Nevertheless, the law allows the investors to recover the amount paid to their friend and they can sue him under the legal principle of tort.

Tort is an alternative source of obligation under the Civil Law. Under the Civil Law, there are five sources of obligations: contract, law, unjust enrichment, harmful act(s) and tort.

In essence, tort under the Civil Law requires three elements in order for a litigant to be successful. Firstly, a wrongful act and/or omission. Secondly, damage(s) must have been sustained. Thirdly, there must be a causal link (connection) between the tort feasor, in this case the friend who made the investment, and the harmed persons.

Do make an effort to discuss the situation calmly and openly with your friends. Now is a good time to put a legal agreement in place, so that you have a claim when the property is sold
Steve Cronin, founder of

Based on the facts given, the elements of tort could be satisfied and proven before a relevant court. The wrongful act carried out by the friend is the mere fact that he posed as an expert in investing, yet failed to carry out the necessary due diligence.

Additionally, due to the friend’s failure in carrying out the due diligence required, the investors have lost their money that was invested in the property.

Moreover, there is a direct link between the friend’s act and the investors’ loss. Essentially, the investors would be seeking to recover the amounts paid to their friend and they possibly could file a claim for loss of profits.

Alternatively, the investors could bring a criminal action before their friend for deceit. The facts provided do not indicate that there are acts of deceit given that the property was, in fact, purchased. However, if there is any evidence that shows otherwise, the group of investors can simultaneously bring a criminal action against their friend.

Debt Panellist 2: Steve Cronin, founder of

The most value you will probably receive in this situation is a Dh250,000 education in how not to invest your hard-earned money.

From a legal perspective, the most you are expected to receive is a fifth of the value of the land plot and property. You have verbal agreements witnessed by all your fellow investors, and possibly emails and messages.

However, your investing friend is not a professional agent or investor and you willingly invested without conducting due diligence yourself, so caveat emptor, or let the buyer beware.

There are a number of investing mistakes you made that you should never repeat again.

First, you invested with friends and took the investment advice of a friend. Friends and money do not mix well, as you are discovering, as any problem could lead to the loss of money and friendship.

Second, you invested in an illiquid, indivisible asset. What if one of your friends needed to sell early or you disagreed on when to sell?

Third, you did not do your own due diligence and trusted your friend. Fourth, you allowed him to register the property in his own name, with no documents to show you owned any of it. You were completely at the mercy of his abilities and his honour.

Your friend is clearly in the wrong (I think through incompetence rather than malice) but he does not owe you any money until the property can be sold. It could take many years for the court to make a decision.

Do make an effort to discuss the situation calmly and openly with your friends. Now is a good time to put a legal agreement in place, so that you have a claim when the property is sold.

There is a silver lining here. If this investment had been successful, you might have been tempted to invest Dh500,000 in the next plot of land. If that was stuck in the courts, you would lose even more money. At least now you will, I hope, invest more sensibly. A globally diversified stock index fund is a good place to start.

Debt panellist 3: Carol Glynn, founder of Conscious Finance Coaching

This is a difficult situation as not only is your money at risk, but long-term friendships are also under strain. It is no doubt a stressful situation for everyone involved.

This is a Bangladeshi land dispute, so it would be advisable to consult a lawyer who specialises in Bangladeshi law. Regarding efforts to convince your friend to pay you back what you invested, without documents to show proof of your agreement, this is probably at his discretion, unfortunately.

Your best hope to obtain your money and save your friendship is for the sale to go through. Focus on assisting as much as you can to obtain a favourable outcome from the court case.

As there seems to be no legal documentation protecting your investment, it is important to communicate with your friend to reach a mutual agreement to recover your money. However, he seems to have no legal obligation to pay you any part of the investment and you may need to prepare yourself for this possibility.

Let this be an expensive lesson. Never enter financial agreements with people without completing your own due diligence and always have legal documents in place to protect yourself.

This is very important with friends, as you are experiencing, because it is usually much more difficult to resolve problems as there will inevitably be many emotions and feelings involved. Stay calm, communicate and try to find a mutually agreeable solution.

The Debt Panel is a weekly column to help readers tackle their debts more effectively. If you have a question for the panel, write to

Updated: January 26, 2022, 5:00 AM