Missed property deadline? Dubai court imposes Dh1.54 million penalty on buyer.
Dubai: A Dubai court has ruled in favor of a property owner in a real estate dispute, ordering a buyer to pay over Dh1.54 million under a deposit-retention clause after she backed out of the purchase.
The Dubai Court of First Instance (Real Estate Division) upheld the seller’s claim, confirming the termination of the sale agreement and directing the buyer to cover Dh1.54 million, in addition to court fees, legal costs, and lawyers’ fees.
Deal collapsed after missed deadline
Court records indicate that the dispute stemmed from a sale agreement for a residential unit in Al Wasl.
The seller had agreed to transfer ownership of the property in exchange for a Dh2.2 million deposit, with the remaining balance payable upon completion of the title transfer.
The buyer issued a cheque for the deposit, indicating her commitment to the transaction.
However, she missed the agreed deadline to complete the purchase and later requested an extension, citing delays in obtaining her Emirates ID and certain administrative approvals.
The court noted that these conditions were not included in the original agreement.
Seller granted extension, buyer failed to comply
According to the judgment, the seller acted in good faith by granting the buyer extra time to finalise the transaction.
Despite the extension, the buyer neither completed the necessary procedures nor paid the outstanding balance.
She also failed to present any evidence of circumstances beyond her control that would have prevented her from fulfilling her contractual obligations.
Court finds seller met obligations
The court examined documents including the sale contract, title deed, and correspondence between the parties, and concluded that the seller had fulfilled all obligations, including preparing the property for transfer and completing the required procedures.
In contrast, the buyer was found to have defaulted on her obligations and failed to attend court hearings despite being legally notified.
Deposit clause decisive
In its ruling, the court emphasized that the contract contained clear provisions regarding the deposit, stating that if the buyer breaches the agreement, the seller is entitled to terminate the contract and retain the deposit.
The agreement further specified that the deposit would be allocated with 70 per cent going to the seller and 30 per cent to the real estate broker.
Legal basis
The court relied on provisions of the UAE Civil Transactions Law, which recognise a deposit as evidence of a binding contract. When agreed as compensation for withdrawal, a buyer who pulls out of the deal becomes liable to the seller under the deposit retention mechanism.
Separate case rejected
The court also dismissed a request to consolidate this case with another lawsuit, ruling that there was no sufficient legal connection. It clarified that the separate case involved a brokerage agreement and fell outside the scope of the current dispute.
