Termination of purchased properties after defaulting on payments due to COVID-19

Dear Questioner,

Further to your inquiry, it seems that the construction of the other 2 properties has been paused based on your explanation.

But we have to check if the project has already been paused or cancelled.

If the project has been paused, you still have the right to negotiate and continue with the payment.

But if the project is already cancelled, you have to file a case against the developer to recover the funds that have been paid by you.

However, we recommend you to provide us with a copy of the SPA and termination notification in order to review it carefully, and hence, provide you with the relevant legal advice for what you shall do.

Please feel free to email us at our email, and you can give us a call.

Looking forward to hearing from you.

Thank you.

Dear Questioner,

We need to check the status of the projects whose construction has been paused and also review the Sale and Purchase Agreements to advise you properly.

Kindly send us a copy of Sale and Purchase Agreements and termination notices on email so that we can review the same and assist you with the next steps.

Thanks

Dear Sir/Madam,

Thank you for considering Maha Bin Hendi Law Firm to provide you with legal advice and services.

It is very important to respond to the DLD termination letter within 30 days from issuance of the letter. In your response, you may include the following:

(1) any evidence proving financial loss or inability to continue full payment of instalments due to COVID. For example, if one investor lost a certain income or a salaried position from a company due to COVID, you may include a letter from the company stating that loss of salary.

(2) Request from DLD to initiate amicable settlement between the parties.

(3) For the project that has been completed, state so.

(4) For the project that were paused, state so and indicate that the developers were FIRST in default and were not implementing the project pursuant to the timetable outlined in the SPA.

(5) If you have reasons to believe that terminations by the developers were not being done in good faith, state so.

You mentioned that two are completed and ready for handover. For your general information, since the percentage of completion of the property exceeds 80%, then the developer (after termination) has the right to exercise one of three options:

1. To continue with the SPA with the defaulting purchaser and retain all amounts paid and request the outstanding payments from the purchaser;

2. The developer may ask the DLD to sell the property by way of public auction and the proceeds received shall be collected by the developer and offset the outstanding balance purchase price due from the purchaser; or

3. To terminate the SPA unilaterally without the need of obtaining a prior court order and retain 40% of the purchase price and return the excess amounts back to the purchaser within one year of the date of termination or within sixty days of the date of successful resale of the property to a third-party purchaser, whichever is earlier.

Thank you.

Dear Client,

Good day!

What we can do is that we can send a legal notice via the court to all the developers and explain the delays. I am sure there was a delay in handover because they were delaying the project.

Please provide us with a copy of the SPA, documents with details of the property and proof of payments. We will review all of them to advise you of the course of action.

There's a possibility for some of them it may be possible for you to terminate and get a refund or get compensation, whatever is possible.

For further assistance, please feel free to contact us by phone or send an email.

Thank you.