Q: I bought an off-plan property & paid 100 %. The property is cancelled. I am stressed whether I will get the full invested amount after liquidation or just minimal… A: You are entitled to the amount put in the escrow account. You can also file a civil suit for the recovery of the purchase price.…

Dubai, UAE

2360

Cancellation of project and reimbursement from the developer

I bought an off-plan property & paid 100 % amount, also paid 4 % Oqood by June 2011.

Now, I learnt through DLD that the property is cancelled as the builder could complete half construction & now it shall go for liquidation.

I am stressed whether I will get the full invested amount after liquidation or just minimal. What do the laws say?

Hari Wadhwana

Al Nassar Advocates & Legal Consultants

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6 Dec 2018, 14:12

Dear Sir/ Madam,

Thank you for getting in touch with me on this.

Firstly, I would like to state that it's not too late for you to claim your dues.

Under the UAE Law, when a purchaser pays a deposit or full purchase price towards the property, the developer has to deposit a percentage of this amount into an escrow account for the sake of safety.

With the news that the project is cancelled and the developer not being in a position to complete the project, you are entitled to the amount put in the escrow account.

Further, you can also file a civil suit for the recovery of the purchase price paid along with legal interest.

Your dues will rank in priority to others and I suggest you should not wait for long as the developer may create third party rights (i.e. sell his assets or transfer to others name leaving nothing for you).

In summary, you should immediately file a civil case claiming the dues along with the legal interest.

I would be happy to assist you further on this and you can get in touch with me on hari.wadhwana@gmail.com.

Regards,

Hari Wadhwana

14 Dec 2018, 16:12

Thanks, Hari,

The developer has left the country without completing the project; the project is already cancelled but did not go for liquidation.

There has been an attempt by few investors to find a new buyer but seems it will not be possible as they have to bring all investors under one umbrella which is not possible.

My concern is if I already paid 100 % amount & also Oqood amount, does the law allow me to get a 100 % refund amount with the legal interest whatever the final rate?

Can DLD/Govt laws protect such investor who has paid 100 % amount?

14 Dec 2018, 16:29

Dear Sir/ Madam,

Thank you for providing me with further information.

As per law, the developer invests a certain % of amount in escrow account which is totally protected and you are eligible to claim this.

Considering the company has not liquidated, you should file a case against the company in order to get the dues.

The court will sell company assets and freeze its account to satisfy dues in your favour. Along with this, you will be eligible to claim full amount in the escrow account.

Please email me the documentation received by you with respect to your project.

Regards,

Hari Wadhwana

14 Dec 2018, 16:33

Many thanks, Hari,

I will send you the documents on your email tomorrow morning.

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