Court Orders Firm To Pay Dh441,000 In Property Management Dispute

The Dubai Commercial Court has ordered an investment company to pay Dh441,000 to a property management firm for outstanding fees relating to property management and leasing services.

 

The court also ordered the company to pay interest at 5% per annum from the date of the claim until full settlement, in addition to legal costs and attorney’s fees. However, it rejected the property management firm’s request to hold a bank jointly liable for the outstanding amount.

 

Dispute Over Property Management Services

 

The dispute arose from a service agreement signed in June 2021 under which the property management firm was appointed to manage and lease a portfolio of properties. Its responsibilities included managing the properties, leasing units and collecting rents in return for agreed fees and commissions.

 

The parties subsequently entered into a tripartite agreement involving a bank that had provided credit facilities to the company owning the properties.

 

The property management firm initially claimed Dhs661,500, arguing that it had fulfilled its contractual obligations while the property-owning company had failed to pay the full amount due.

 

Court Appoints Accounting Expert

 

The court appointed an accounting expert to examine the contractual relationship, invoices and other relevant documents. The expert found that the property management firm had performed the management and leasing services required under the agreement and was entitled to the invoiced amounts.

 

After taking into account an amount previously paid, the expert determined that Dhs441,000 remained outstanding.

 

The court accepted the expert’s findings, holding that they were based on sound accounting principles and supported by the documents in the case file. The property-owning company also failed to provide evidence that the remaining balance had been paid.

 

Contractual Obligations

 

The court held that the service agreement was binding on the parties and that performance of the agreed services entitled the property management firm to receive the contracted fees.

 

The failure of the property-owning company to settle the outstanding amount therefore entitled the service provider to pursue the unpaid dues.

 

The court ultimately ordered the company to pay Dhs441,000, together with 5% annual interest from the date of the claim until full payment, as well as legal expenses and attorney’s fees.

 

Bank Not Held Jointly Liable

 

The court separately rejected the request to make the bank jointly liable for the amount.

 

It found that the tripartite agreement did not contain any express provision requiring the bank to pay the property management firm’s fees. Nor did the agreement create an obligation on the bank in relation to the specific debt claimed in the proceedings.

 

The bank’s role as lender under the credit facilities, therefore, did not by itself make it responsible for the property-owning company’s unpaid contractual obligations to the property management firm.