Homefront: 'My off-plan property is delayed. How do I seek compensation?'
The UAE resident will have to rent another home while he waits for the property to be delivered
I purchased an off-plan property under a 40/60 payment plan, where 60 per cent of it was paid at handover. I have paid around 91 per cent now and have completed the Oqood registration. The property was supposed to be handed over by June 2018 , according to the sales and purchase agreement (Spa), with 12 months more time if required. It should ideally be handed over by June 30 but the contractor has stated July 31 as the completion date. There has been no communication of 'force majeure' [unforeseeable circumstances that prevent a contract being fulfilled] on the delay from the developer. Based on an internal discussion with them, the delay is mainly due to lack of funding. According to the Dubai Land Department website, the project is 73 per cent complete.
After visiting the site in May 2019, it is clear to me it will take another year to complete the construction, particularly as there are less labour staff at the site. In addition to that, I estimate it will be a further one to two months to complete the handover. Effectively, I think I will receive the property in the second quarter of 2020.
I do not plan to the cancel the SPA, however, I plan to move from another emirate to Dubai by July this year. With the children's school in the vicinity of the new apartment, I'll be forced to rent an apartment in Dubai with rental contract of at least one year.
Is there a legal recourse to seek compensation for the rent that I will have to pay in Dubai and the rental contract time, which will overlap the handover date in 2020. Do I start with a written notice to the developer? Do I have to wait until June 2019 and only then initiate any arbitration. Can I go into arbitration on my own as an expatriate or do I have to hire a lawyer and an Emirati to represent me. WS, UAE
As in all these difficult situations, it is better to discuss your position in face-to-face meetings, Therefore, initially, seek to get some answers from a person of high position within the developer's office before doing anything else. Depending on how this meeting goes, this will determine your next move(s).
To answer your questions, I would advise the following: with reference to any legal recourse for compensation in terms of having to rent due to the property being delayed will depend on what your Spa says regarding delay penalties. Often the penalty amount is capped so depending on what the cap is will determine if you will be recompensed the full amount of rent paid should you have to move into another property in the meantime.
Any formal complaint or notice always has to be in writing; this will also act as a record and you have the opportunity of being able to chronologically quote all the facts. Filing a case against the developer can potentially be done at any time however, it is probably wise to wait until handover so you can claim for the full extent of damages that were caused by the delay. In addition, if after handover it is found that there are variations in size and specification to the unit, these too can be added into the potential future claim.
Of course you can attend any hearing of arbitration however, it is uncommon for an individual to represent themselves without the use of professional legal counsel. It is therefore advised to have a lawyer present and preferably an Arabic speaker.
Mario Volpi is the sales and leasing manager at Engel & Volkers. He has worked in the property sector for 35 years in London and Dubai
The opinions expressed do not constitute legal advice and are provided for information only. Please send any questions to firstname.lastname@example.org
Updated: May 29, 2019 11:26 AM