Questions & Answers
Cancellation of an off-plan property contract due to delivery delay
Seeking cancellation for the delaying property delivery, as developers are not being reasonable.
I purchased an off-plan property in Dubai which was due for handover in June 2018 but still incomplete as of May 2020 (approx. 58%).
80% has been paid from a purchase price of 1.97 million, plus 4% DLD fees.
After pleading with developers for assistance, I recently got offered 2 x 999,999 AED, properties from the Developer (not ready till first quarter 2021 apparently), plus DLD fees as they would be classed as new sales.
I wish to cancel the purchase. Do I get additional rights for a 2-year delay and being under 60% completion?
Can I use force majeure (I'm on 75% wage reduction till September due to COVID-19)?
Has a law come into play to have additional compensation whilst renting during the delay? (I was advised on June 2019 by the SLC that there were discussions at DLD but nothing official). Can you claim the 4% DLD fees back?
Thanks in advance
Dear questioner,
As the developer has already delayed the handover of the property beyond the agreed period, therefore, you can cancel the SPA and ask for a refund of your paid amount.
Further, we can help you in this case as we are already dealing with similar cases in Dubai.
If need be, kindly contact us via phone for a detailed discussion or write us an email for further assistance.
Hello,
As per your questions regarding the query for the termination of the contract on the issue of delay, the Law is very specific in this scenario.
As per Art. 20 of Executive Council resolution no. 6 of 2010, the grounds of the termination by the purchaser are specific for the courts to set for termination or rescinding of the contract.
And as per UAE Civil Law, there is also a possibility to terminate the contract because of non- performance. Also, if the construction is below 60%, then the developer can cancel the contract and retain a maximum of 25%.
However, if the purchaser has doubts that the estimated time of delivery of the property is not fixed, then the purchaser can claim compensation accordingly from the court.
Yes, the Force Majeure can be one of the grounds for the cancellation and payment issue. Till now, there is no such notification or bylaw by DLD. As usual, the 4% fees for DLD are not refundable, however, if the court decides, then it is possible.
Please feel free to contact us via phone or email.
With Regards!
