Questions & Answers
SPA termination & refund case if the developer fulfills obligations during the case
Termination of SPA for a delayed project with a Real Estate Developer.
Assumptions
1. Anticipated Completion Date as per the SPA: Q1 2017 + 12 months
2. The last available project status as per Dubai Rest: 94%, as of February 2019. However, the developer says that the project has been completed
3. The developer has been misleading the investor about imminent completion for about 3 years (evidence is available)
4. Investor fulfilled all his obligations
5. Price paid: 80%
6. Investor registers a claim for contract termination after about 3 years of delay
7. Developer is at fault at the date of starting the litigation
I would appreciate your opinion on how likely are Dubai Courts to support the annulment of the SPA if the developer sends a handover notice to the investor during the litigation?
What does it depend on?
Thank you.
Hello,
Thank you for your question.
Generally, in order to assess whether or not you will be able to obtain a refund for your investment, you will need to review your sale and purchase agreement, as that is what it ultimately depends on.
It seems like they are delaying the handover of your property, which, based on the contract, they may not have the right to do.
Another factor to take into consideration is the reasoning of the developer - for example, was their argument force majeure? Also, was their notice in line with the contract?
We have had several cases where properties have been delayed and the purchasers were able to get all their money back.
Similarly, there have been cases where the purchasers found out they were also entitled to interest for the delayed time.
However, this was identified through a thorough review of the specific terms of their contracts.
Whether or not the Courts will terminate the SPA is at their discretion. Based on Court precedent, there have been cases where purchasers were able to terminate the contract and obtain their money. However, this ultimately depended on the specifics of their matter.
Moving forward, should you require further tailored substantive legal advice, kindly send an email to my firm.
Kind regards,
Ludmila
Dear questioner,
We need to review the mutually signed SPA in order to assist you properly.
As the developer has not sent you a handover notice till date, therefore it will not make much difference if it's sent after registering the case in Dubai Courts.
Kindly contact us directly by phone or email for a detailed discussion on the case.
As per your query, the developer has delayed the project for 3 years and also the matter is in the litigation stage. Also, you have mentioned that the developer has given the handover notice.
In this scenario, it depends upon the court and also to some extent the application made by the lawyer to take your case into consideration.
Please contact us further advice.
Dear Client,
Good day!
Yes, it is possible to terminate, get full refund and compensation thereof because of the delay of completion.
However, we need to review the SPA because many of the contracts might have arbitration as jurisdiction. We will review the contract to advise the course of action on how we can proceed.
For further assistance, please feel free to contact us on the phone or send an email.
Thank you.
