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Developer Needs to Compensate if Your Apartment Handover is Delayed

To pursue compensation, first file a complaint against the developer at the DLD, and if unresolved, file a civil case in court

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Pavitra Shetty

Published on May 29, 2024, 11:12:38

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delay in hadover of property, compensation, civil case, sale and purchase agreement, off plan apartment

 

If you purchased an apartment from a private developer in Dubai and experienced a delay in the project's completion, resulting in you receiving your apartment more than a year after the committed date, despite paying your EMIs on time throughout the four-year payment plan, you can seek compensation.

This delay may have forced you to pay rent for an additional year, a cost you may be able to recover from the developer.

Claiming Compensation for Delayed Handover in Dubai

When you purchase an off-plan apartment in Dubai, you and the developer enter into a Sale Purchase Agreement (SPA). The SPA outlines the purchase price, completion date, breach penalties and force majeure clauses.

This agreement must be executed in good faith, in accordance with Article 246(1) of Federal Law No. (5) of 1985 On the Civil Transactions Law of the UAE, which mandates that contracts be implemented according to their terms and in good faith.

Steps to Claim Compensation

1Check the SPA for Compensation Clauses

The SPA should specify the compensation for breaches, including delays. According to Article 295 of the UAE Civil Transactions Law, you can claim damages, which may be a monetary payment or a specific action to rectify the breach.

2Approach the Dubai Land Department (DLD)

If there's a dispute, you can approach the DLD for an amicable resolution. Under Article 14 of Executive Council Resolution No. 6 of 2010, the DLD can mediate between you and the developer. If a settlement is reached, it will be documented and binding upon approval by the DLD.

3. File a Complaint with the DLD

If the DLD finds that the developer breached the SPA, it will report the complaint and refer it to the appropriate authorities for further action, as per Article 13 of Law No. 13 of 2008. 

4Consider Force Majeure Clauses

Be aware that the developer might claim force majeure (unforeseen circumstances beyond their control) as a reason for the delay, as permitted under Article 21 of Executive Council Resolution No. 6 of 2010.

5. Claim Additional Damages

You can also seek damages for the financial loss incurred due to the delay. Article 292 of the UAE Civil Transactions Law allows you to claim compensation for actual losses and lost profits that are a direct consequence of the developer's actions.

6. Approach a Competent Court

If the matter isn't resolved through the DLD, you can file a civil case in a Dubai court. The court will consider the SPA terms and applicable laws to decide on your compensation.

Legal Provisions to Support Your Claim

  • Article 246(1) of Federal Law No. (5) of 1985 On the Civil Transactions Law of the UAE: Contracts must be executed in good faith.
  •  Article 295 of the UAE Civil Transactions Law: Specifies damages for breaches.
  •  Article 14 of Executive Council Resolution No. 6 of 2010: Allows the DLD to mediate disputes.
  •  Article 13 of Law No. 13 of 2008: Details the DLD's role in referring complaints for further action.
  •  Article 21 of Executive Council Resolution No. 6 of 2010: Allows force majeure claims.
  •  Article 292 of the UAE Civil Transactions Law: Covers compensation for actual losses and lost profits.

Next Steps

To pursue compensation, initially approach the DLD and file a complaint against the developer. If necessary, proceed to file a civil case in a Dubai court. For detailed guidance and to strengthen your case, seek independent legal advice from a legal practitioner in Dubai.

By understanding and utilising these legal provisions, you can seek compensation for the delayed handover of your apartment and the additional rent you had to pay due to the delay.

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

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