Questions & Answers
Buyer's default of the SPA
I signed a Sales Purchase Agreement with a buyer on a cash-buy basis and deposit 10% of the cost of the property. We agreed to meet at RERA in 30 days of to effect the transfer of the title deed. 60 days have passed and the buyer has informed me that he does not have the full amount for the transfer of the title deed.
What should I do with the 10% deposit?
Dear Sir/Madam,
As per the general guidelines related to sale and purchase agreements ("SPA") in the UAE, if the Buyer and the Seller do not effect a transfer of the property within the stipulated time period in the SPA, the Seller is entitled to keep the 10% deposit from the Buyer as a penalty unless otherwise stated in the SPA.
Hence, you may keep the deposit unless you and the buyer and have signed on terms in the SPA indicating a different form of penalty.
Regards,
Ahmed Odeh
