أسئلة وأجوبة
Buyer default: Can the developer deduct 40% and cancel the SPA?
Dear Sir/Madam,
I am a developer in Dubai. The buyer of an off-plan property defaulted on payment, paying only 55% of the amount due, while the project is currently 70% completed.
As per the default clause under the SPA, I can deduct 40%, retain the property, and cancel the SPA.
Is it worth approaching and possible to obtain a court verdict to get the full 70% of the purchase value, considering I have completed 70% of the work?
Dear Questioner,
It is possible to approach the court to seek a verdict for the full amount of 70% of the purchase value, as you have completed 70% of the work.
However, the outcome of the case will depend on the specific terms and conditions outlined in the sales and purchase agreement (SPA) between you and the buyer.
If the SPA includes a default clause that allows you to deduct 40% and retain the property in case of default, then you may have a strong case to seek the remaining 30% from the buyer.
However, if the SPA does not clearly outline the consequences of default, the court may consider other factors such as the buyer's financial situation and any efforts made to rectify the default before making a decision.
