Court Orders Developer to Refund Investor Dh1.5 M Over Failed Property Transfer

A Dubai court has directed a developer of a hotel unit in the Heart of Europe project on the World Islands to refund more than Dh1.37 million to an investor and pay an additional Dh150,000 in compensation, after ruling that the property could not be transferred due to multiple legal attachments registered against it.

The Dubai Real Estate Court annulled both the sale and purchase agreement and a related hotel management contract, finding that the developer had failed to meet a key contractual obligation — the transfer of ownership of the unit to the buyer.

In its ruling, the court ordered the developer to repay Dh1,370,749.12, along with annual legal interest of 5 per cent from the date the case was filed until full settlement. It also awarded the investor Dh150,000 in compensation, with 5 per cent annual interest accruing from the date the judgment becomes final.

The dispute centred on a hotel unit purchased within the Heart of Europe development, where the investor had expected returns through its operation as part of a hospitality scheme.

Court documents show the investor paid around Dh1.4 million for the unit. However, despite full payment, the title was never transferred, no ownership deed was issued, and the investor was left without legal control of the property.

According to filings, the investor initiated legal action in 2022 seeking cancellation of the purchase agreement, recovery of all sums paid, and additional compensation and investment returns exceeding Dh2.24 million.

The claim further stated that the unit was affected by undisclosed legal restrictions, attachments and enforcement proceedings.

During proceedings, the developer argued that the project had been completed, was operational, and had received all required approvals, including five-star hotel classification. It also maintained that the unit had been registered in the interim property register and that investment returns had already been paid.

Supporting documents submitted included a Dubai Land Department interim sale certificate, project completion records, tourism approvals allowing guest operations, and hotel classification certificates.

However, the court relied on property records presented during the case, which confirmed 13 attachments registered against the unit. The earliest was dated February 19, 2024, while the most recent was recorded on July 28, 2025. The developer did not dispute these entries.

The court held that these restrictions made it impossible for the developer to complete the transfer of ownership, describing title transfer as a fundamental obligation under the contract. It ruled that failure to perform this duty amounted to a serious breach justifying termination of the agreement.

It further ruled that once the sale agreement was cancelled, the linked hotel management contract also stood terminated, as it depended on the investor’s ownership of the unit.

The court found that the investor had paid the full purchase price along with administrative and handover charges, after deducting Dh55,862.88 paid as a 4 per cent Dubai Land Department registration fee directly to the authority. It ordered a total refund of Dh1,370,749.12, covering purchase payments, handover costs and administrative fees.

Allegations that the investor had already received Dh320,048 in investment returns were dismissed due to lack of evidence.

The court observed that the investor had been deprived of both the property and the invested funds for a prolonged period and awarded Dh150,000 in compensation for damages.

It also dismissed the case against the remaining defendants, finding no contractual relationship or proof of fraud or personal liability.

The developer was additionally ordered to pay court fees, legal costs and Dh1,000 in legal expenses.

 

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