In the last few years, the Dubai courts have witnessed many cases filed by investors/purchasers of real estate against developers requesting the courts to terminate their contract. This article considers the merits of some of the arguments raised by the purchaser and the developer in a recent judgment where a developer failed to deliver an apartment by the contractual hand-over date (at the time of judgment, the hand-over date was approximately 3 years in delay) and legislation (that has been spurred by the economic crisis) that sets out circumstances when a purchaser or developer can terminate a contractual relationship.

Background

The Developer (the Defendant) and the Claimant entered into a contract in February 2006 for the purchase of an apartment. Contractual delivery was to occur two years later; however, the Developer failed to meet its delivery obligation and the Claimant filed a case against the Developer requesting the court to:

1. cancel the contract;

2. order the Developer to reimburse the money that was paid for the apartment; and

3. pay damages incurred by the Claimant as a result of the delay.