We signed MOU to purchase a house on a mortgage and it got delayed. Can the seller ask for compensation?

Is the seller a developer or a secondary contractor?

The answer to this question should be in form F. If you hired a lawyer to review it before signing he must consider this part in the additional terms.

Did the seller fulfill his obligations?

Did he obtain NOC from the developer?

Did the seller have a mortgage for the same unit?

Should an NOC from his bank be received?

Usually, you should have the right to renew Form F or a reasonable time to cure such breach as per Form F.

We can assist you in finding a legal solution by sharing with us form F for review.

Contact us through WhatsApp or email for assistance.

Yes. You will be protected to an extent. Mortgage approvals can take time due to various factors like credit checks, property valuations, and internal bank procedures.

While frustrating, these delays are often beyond the control of both the buyer and seller. There might be some additional conditions if the delay was beyond the control of the parties.

In order to verify that we have to review the MOU as well. Later we will discuss the possibilities to overcome this situation.

Kindly share your WhatsApp number to discuss this further.

Hello,

If the delay is due to the bank's approval process and not because of any fault on your part, you are generally not liable for any additional fees or penalties unless the Memorandum of Understanding (MOU) specifically includes clauses related to such situations.

Since the delay is caused by the bank and not by your actions, you cannot be held responsible for this delay, and therefore, the seller cannot demand compensation (such as a 10% security deposit) unless explicitly stated in the MOU.

For further assistance, kindly share your Whatsapp number.

Dear Questioner,

Thank you for your inquiry.

Based on the information provided, it seems that the delay in the home loan approval process is beyond your control, as it is related to the bank’s processing time.

As such, the seller's request for an additional 10% security deposit as compensation for the delay may not be justified unless explicitly outlined in the MOU or a separate agreement between the parties.

To address the situation:

MOU Review: We recommend reviewing the MOU carefully to check whether there are any clauses addressing penalties or compensation due to delays caused by circumstances beyond your control, such as the bank's processing time.

Negotiation: If the MOU does not mention any such penalties, you should be in a strong position to negotiate with the seller to explain that the delay is due to factors outside of your control.

Legal Protection under DLD: As the property is under mortgage, you are generally protected under the regulations of the Dubai Land Department (DLD), which governs such transactions.

However, specific protections will depend on the terms of the MOU and any other relevant agreements.

We would be happy to assist you further in reviewing the MOU and negotiating with the seller, or in case any legal steps are needed to address this matter.

Please feel free to reach out if you have any further questions, or if you would like us to assist in drafting a response to the seller.

Kind regards,

Mohammed Salah

Legal Consultant

Under UAE law, if the Memorandum of Understanding (MOU) has expired and the delay was caused by the bank, the seller cannot demand an additional security deposit unless it was specifically agreed upon in the contract.

You may consider reviewing the matter with the Dubai Land Department, especially since the property is mortgaged.

Feel free to send more details for a more precise legal opinion. Our office specializes in such matters.

it appears that you may have grounds to contest the seller’s request for an additional deposit due to delays caused by bank processing times.

It is advisable to gather evidence supporting your position and seek legal counsel if necessary.