Questions & Answers
Terminating an SPA due to a delay in a project for 24 months
Seeking legal advice to terminate SPA due to a delay in the project for 24 months.
I have purchased 2 apartments from a developer.
Details of the project as per the signed SPAs:
- 30% paid on time, 70% to be paid on handover.
- Expected handover: 1-Apr-2019, Longstop: 1-Apr-2020.
The Developer sent an email on 17-Mar-2020 saying that the new completion date will be September 2020 & October 2020 respectively for both apartments due to Covid-19.
I met the developer on 2-Nov-2020 informing them that both apartments have not been delivered in September 2020 / October 2020 and asked for refunds.
They flatly refused to refund saying that it is not possible and Dubai Court will favor their case due to COVID-19 if I decided to approach Dubai Court.
On March 31, 2021, they sent the handover notice for 1 apartment.
Question:
Do I have a winning case if I filed to court to return the paid amount?
I can provide the signed SPA if you need to review the terms and conditions of the signed SPA.
Hi,
The accurate answer will depend on the terms of extension, your acceptance towards any extensions, and also the current status of the project.
If it is delayed, you have a winning case and if they achieved progressed level of construction, the court will likely grant the termination relying on good faith, and in this event, we can advise going for compensation.
As for Covid 19 lockdown, it was for a specific period of time only and not a reason to rely on forever. Please provide more details and documents.
Sayed,
Dear Questioner,
We need to review the terms of the Sale and Purchase Agreement and see the extension which is permitted to the developer.
If the developer has unduly delayed the handover, then you can file a case for termination of the Sale and Purchase Agreement and claim a refund of the money paid along with compensation.
Further, taking Covid as a ground for force majeure is permitted for a limited period of time.
Please send us a copy of the Sale and Purchase Agreement via email so that we can review the same and guide you with the next steps.
Thanks!
