Questions & Answers
Canceling my MoU and getting my deposit back due to a low bank valuation and overpriced property
Hi,
I wanted to purchase a 2-bedroom apartment in JVC Dubai. I gave a 10% security deposit cheque to the seller. The price mentioned in the MoU is very high compared to other similar apartments in the same building.
The bank’s valuation also came in very low. Since the valuation is much lower, how can I terminate the MoU and get my cheque back? The MoU ends on 1st October 2024.
One of the articles in the MoU states:
In the event that the Buyer fails to make the payments as agreed or fails to complete the transfer on the agreed date due to his own acts or omissions, the Seller has the right to terminate this agreement and retain the deposit, provided that the termination is due to a violation of the agreed terms, unless both parties agree amicably to different dates.
I need help urgently.
Hello, dear questioner,
You can file an annulment lawsuit if the seller breaches any of his obligations, such as registering and transferring ownership, and this did not occur.
One option is available if it is proven that the seller cheated or deceived you, such as regarding the price, or if there is a hidden defect that he did not inform you about. We can help you with this.
For further discussion, please share your WhatsApp number.
Dear questioner,
If a contract includes a provision stating that termination is allowed if the bank's valuation falls below the actual price, you can terminate the contract without any compensation.
So it will be better to review the contract and take appropriate steps.
If you need our assistance in your matter, kindly share your WhatsApp number.
Dear Questioner,
As such, we recommend reaching a fair and amicable settlement with the seller. If you cannot purchase the unit by the 1st of October, you will lose the 10% deposit.
However, if by the 1st of October you go to the trustee office and the seller does not show up, you will get your deposit back, plus an additional 10% as compensation.
Dear Questioner,
Thanks for your inquiry!
Regarding the above, and according to UAE law, a MoU (Memorandum of Understanding) is a legally binding document and should be treated as a contract.
Therefore, if you wish to terminate the MoU, you will need to follow the terms and conditions stated in the agreement.
In your case, the MoU states that if the buyer fails to pay the agreed payments or complete the transfer on the agreed date, the seller has the right to terminate the agreement and retain the deposit.
It also states that if the termination is due to a violation of the agreed terms, the seller is entitled to retain the deposit.
If you believe that the seller has violated the agreed terms, such as providing a false valuation or charging a higher price than similar apartments in the same building, you may have grounds to terminate the MoU and request the return of your deposit.
To do so, you will need to provide evidence to support your claim and negotiate with the seller to reach an amicable solution.
If you are unable to reach an agreement, you may need to seek legal advice and take the matter to court.
It is important to note that terminating a MoU can be a complicated and lengthy process, and it is best to seek legal advice from us before taking any action.
Additionally, it is always advisable to thoroughly review and negotiate the terms and conditions of any agreement before signing it to avoid any potential issues in the future.
Kindly do not hesitate to contact us via phone or email for further guidance.
Greetings,
Hello,
As per your query, please note whether the availability of the mortgage is a condition written in the MoU. If not, then the seller has the right as per the MoU clause.
If yes, you can file a real estate case to cancel the MoU and return the cheque, since the bank valuation is lower than the purchase price.
Please send the MOU via email or WhatsApp.
Thank you for reaching out to me with your concern regarding the apartment purchase in JVC!
I understand how frustrating it can be when the property valuation comes in lower than expected, especially when you're already committed through an MoU.
In situations like this, the terms of the MoU, especially the clauses regarding deposit and termination, are critical.
Based on the article you’ve shared, it seems that the seller may have the right to retain the deposit if the termination is due to the buyer's failure to pay or transfer on time.
However, if the valuation discrepancy significantly affects the purchase, and there is no fault on your part, there may be grounds to renegotiate or possibly terminate the agreement amicably.
I would recommend reviewing the full MoU carefully to explore possible exit strategies and to negotiate with the seller.
If necessary, we can discuss legal actions to retrieve your deposit if the agreement was not in good faith.
I’m happy to assist you further and discuss how to handle this effectively. Feel free to reach out to me on WhatsApp or call me at [-------].
Alternatively, you can email me at [-------], and we can schedule a detailed consultation.
Best regards,
Suhail Rana
Dear Questioner,
We will help you resolve this issue. Since the bank’s valuation is very low, this can be considered a valid reason for withdrawing from the transaction.
Additionally, there are several other options to avoid this penalty. To verify, we need to review the MoU as well.
Kindly share your WhatsApp number to discuss this further.
Dear Questioner,
You can potentially terminate the MoU due to the inability to secure financing because of the low bank valuation.
Consult a real estate attorney for specific guidance and follow up with written communication requesting the return of your deposit. Please contact us at [------] or via email at [------].
