Questions & Answers
Delayed property projects and the right to exit the SPA
Delay in property completion and need for cancellation and exit from SPA
Hello All,
I booked for an off-plan property in Downtown Dubai by a leading builder. The completion date was June 2018. However, the property was not completed in June of 2018.
I received a note in April 2018 citing the new completion date would be Dec 2019.
Since the completion date is well over the stipulated grace period in SPA, I had requested the builder for a friendly settlement by cancelling the SPA and refunding the money as per the default by vendor clauses in the SPA.
This has been refuted by the builder and repeatedly says that they cannot cancel the SPA and neither can they refund the money. What are the options available?
Dear Sir,
Many thanks for your enquiry, we appreciate your concerns.
All developers of property in Dubai give themselves a grace period of 12 - 18 months from the estimated completion date in the SPA, to hand over the completed properties to investors.
When the contractual grace period is exceeded, the developer will be bound to pay the contractual penalty as set out in the SPA, on the total monies received from the investor on a daily basis until actual handover.
Unfortunately, once the SPA is signed, it cannot be cancelled, investor monies tied up in escrow cannot be released to investors until project completion and until RERA certifies that the project is cancelled and investors are entitled to a refund.
We recommend you see a lawyer to enforce your rights to the penalty amounts owed to you. Should you require further assistance in that regard, please email us on info@aasolicitors-ae.com.
