Homefront: 'Can I get my money back on a delayed Dubai project?'
The buyer says handover of his off-plan apartment has been pushed back by 12 months
I purchased an off-plan property in the third quarter of 2017 from a relatively new developer in Dubai, which has delivered a couple of projects of outstanding quality. The handover date for the two-bedroom property was supposed to be the end of the third quarter of this year. In December 2018, I received notice that the project was more than 30 per cent complete, and accordingly a respective instalment was due, which I paid promptly. Over the course of the next six months, no further instalment requests were made, which led me to suspect there might be project delays. In July, I emailed the developer and checked the Dubai Land Department project status website only to find the development had not progressed beyond 33 per cent completion. The report's date was May 19. The developer did not reply to my email. I followed up by phone and received an unapologetic note that the project handover has been pushed to October 2020 as the contractor the developer was using went bankrupt and had to be replaced. This was not communicated in written form until the end of last month. In the letter sent, the developer mentioned that the "project is progressing very well" while in parallel notifying me that the handover date has been pushed by 12 months. To me, the statements sound contradicting. As I understand from my contract, the developer has the right to push delivery by up to 12 months, however, I expect they are also obliged to keep their investors up to date and not keep them in the dark for more than seven months. This seems like an act of bad faith. What are my options with the developer? My preference would be to terminate the contract and get my money back. The developer says this not possible as the contract has already been registered with the DLD. AS, Dubai
Unfortunately, you will not be able to terminate the contract and get your money back. This is because the developer has not broken any laws and, as they say, the project is registered at the DLD. You are also right that any developer is entitled to delay completion by up to 12 months. So, pushing the date from the third quarter of 2019 to October 2020 means they are within their rights. It is very frustrating for you as the buyer. Whether you are an investor or an end user, your purchase will be inconvenienced.
When it comes to getting money back from a developer, the first thing that must happen is the Real Estate Regulatory Agency formally cancelling the project. This is unlikely in your case as this developer has indeed delivered past projects.
I am surprised you have had little to no communication from them as in the past. Their reputation has been very good; they generally appear to look for solutions to help rather than hinder their clients. You may have slipped through the communications net because this is not their style. Get in touch with higher management at the developer's office to organise a face-to-face meeting to iron out the issues.
Mario Volpi is the sales and leasing manager at Engel & Volkers. He has worked in the property sector for 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 firstname.lastname@example.org
Updated: September 11, 2019 08:17 AM