Buying off-plan property in Dubai: What happens if the developer delays?

A buyer and a developer enter into a Sale Purchase Agreement, which includes clauses regarding the price, completion date, compensation for breaches and force majeure terms

- Ashish Mehta

Question: I am considering purchasing an off-plan property in Dubai. If the developer fails to deliver as promised, what legal recourse do I have?

Answer: In Dubai, a purchaser and a developer (seller) enter into a Sale Purchase Agreement (SPA) about the property which is sold on an off-plan basis.

The SPA will include clauses regarding the purchase price, completion date, compensation for breaches and force majeure terms (beyond the control of the parties to the agreement), among others. Therefore, the relationship between the purchaser and the developer (seller) is governed in accordance with the agreed-upon terms and conditions of the SPA.

The SPA will be implemented in good faith in accordance with the clauses mentioned in it. This is by Article 246 (1) of the Federal Law No. (5) of 1985 On the Civil Transactions Law of the United Arab Emirates, which states, “1. The contract shall be implemented according to the provisions contained therein and in a manner consistent with the requirements of good faith.”