Dubai Court Orders Dh185,000 Refund After Developer Construction Delays

A Dubai real estate court has ruled that a property developer must refund Dh185,000 to an investor, after lengthy construction delays justified a reduction in the retention amount following contract termination. The court also awarded 5 per cent legal interest from the date the lawsuit was filed until full repayment. The developer’s retention entitlement was reduced from 40 per cent to 10 per cent of the off-plan unit’s value.

The dispute stems from 2017, when the investor purchased three units in a residential development, including one valued at Dh463,000, with handover originally scheduled for the end of 2018 and a contractual extension to December 2019. The investor had paid nearly half the unit’s price but halted further installments due to slow progress. By January 2019, construction had reached just 15 per cent, and the project was completed only in February 2023.

The developer sought full retention of 40 per cent after terminating the contract under Dubai’s off-plan property law. The court ruled that the prolonged delay constituted a serious breach and retaining the maximum amount would be unfair. Judges limited the retention to 10 per cent and ordered a refund of the balance, with legal interest, court costs, and lawyer’s fees.

For any enquiries or information, contact ask@tlr.ae or call us on +971 52 644 3004. Follow The Law Reporters on WhatsApp Channels.