Questions & Answers
Termination of an off-plan property SPA and getting a refund
Hello,
My father had purchased an off-plan hotel room (rental-pool) in Dubai. He paid the deposit and all fees and has been paying all installments on schedule towards the developer's escrow account. However, the project's ACD was on June 19, with the six-month extension, Dec '19.
He stopped paying the installments after the extension period (paid around %65) on the grounds that the project is yet not running and not generating him any revenue. According to the DLD, the project reached 100% completion on October 20.
He asked the developer to cancel the SPA after the extension period, but they kept stalling and saying it is not possible. Moreover, they provided us with different dates for the ADC. The SPA says June 19 while the Property Reservation Agreement says Dec 19.
Due to financial constraints, he cannot continue with further payments. What is the possibility to cancel the SPA through the DLD or Real Estate Courts in Dubai?
Hi,
The project is now 100% completed and the court will consider that keeping silent until the completion date an acceptance towards the extension since the buyer had the chance to terminate at the time the project was delayed.
Right now, chances to terminate are very low and I can advise with one of the following options in order to narrow the losses:
1. If the buyer is not able to continue, he should find a replacement buyer who shall pay him the paid amount or the majority of it.
2. Complete the purchase price and claim compensation thereafter for the loss of revenue.
Otherwise, the developer has the right to terminate the SPA through DLD and retain 40% of the purchase price.
Kindly contact us via phone or email for further assistance.
Regards,
