Buyer to Pay Dh7.52 Million After Backing Out of Real Estate Deal

The Dubai Real Estate Court has ordered a buyer to pay two property sellers Dh7.52 million, representing 80 per cent of a Dhs9.4 million deposit, after he failed to complete a Dh47 million property purchase.

 

The court also ordered the buyer to pay interest at 5 per cent annually from the date the lawsuit was filed until full payment, along with legal expenses and lawyers’ fees.

 

The two sellers filed a lawsuit against the buyer and a real estate brokerage company, seeking payment of the Dh9.4 million deposit after the buyer backed out of the purchase of a unit in a project in Dubai’s Business Bay area.

 

According to the case documents, the sellers entered into a sale agreement with the buyer in May for a total consideration of Dh47 million.

 

Under the agreement, the buyer was required to pay a Dh9.4 million deposit when signing the contract, with the remaining Dh37.6 million payable upon registration and transfer of ownership by June 2026.

 

The buyer issued a cheque for the Dh9.4 million deposit and handed it to the real estate brokerage company. The brokerage told the court that it was holding the cheque as a trustee and was prepared to release it to whichever party the court determined was legally entitled to it.

 

The sellers told the court that they had prepared the documents required to complete the ownership transfer. However, the buyer failed to pay the outstanding balance or complete the purchase within the agreed timeframe.

 

The court also found that there was no evidence of a written agreement extending the deadline. The contract expressly required any amendment to its terms or dates to be made in writing.

 

Contract Allowed Seller to Retain Deposit

 

The court noted that the agreement expressly gave the sellers the right to terminate the contract and retain the deposit if the buyer failed to pay the full purchase price or complete the transaction by the agreed date for reasons attributable to the buyer.

 

The additional contractual terms, however, provided for the deposit to be divided between the sellers and the brokerage company. Under those terms, 80 per cent of the deposit was payable to the sellers, while the remaining 20 per cent was allocated to the brokerage.

 

The court concluded that the buyer had breached his contractual obligations by failing to complete the transaction.

 

As a result, the sellers were entitled to 80 per cent of the Dh9.4 million deposit, amounting to Dh7.52 million, rather than the full value of the cheque.

 

Buyer Ordered to Pay Interest

 

In addition to the Dh7.52 million, the court ordered the buyer to pay legal interest at an annual rate of 5 per cent from the date the lawsuit was filed until the amount is paid in full.

 

The buyer was also ordered to bear the legal expenses and lawyers’ fees incurred by the sellers. The court dismissed the remaining claims.

 

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