Dubai Court of Cassation, Real Estate Appeal No. 31 of 2025, judgment of 15 April 2025
A court must give a claim its correct legal characterisation according to what is actually sought and its legal basis, whatever label the claimant uses, and limitation depends on that characterisation. Under Article 524 of the Civil Transactions Law, no claim to rescind a sale or to reduce or supplement the price may be heard after one year from delivery of the property, whether actual or constructive. Claims for compensation and for repayment of the price of a shortfall in the area of a unit sold are, in substance, claims to reduce the price and are barred once a year has passed since handover.
A buyer bought a villa in March 2019 for AED 20 million; the sale agreement stated a built-up area of 11,906 square feet. He took delivery the same month. Later a surveyor he engaged reported a shortfall of about 1,421 square feet, which he valued at about AED 2.39 million. After sending a notice in December 2023 he sued in January 2024 for that amount as the difference in price and for AED 1 million in compensation, with interest. The Court of First Instance held the claim time-barred and the Court of Appeal affirmed.
In cassation the buyer argued that he was not seeking a reduction of the price but repayment of what he had paid for area he never received, that he had acted promptly after discovering the seller's deception in August 2023, and that the one-year period in Article 524 of the Civil Transactions Law did not apply.
The Court of Cassation dismissed the appeal. The court must apply the correct legal description to the claim, based on what is really sought and its legal cause, regardless of how the claimant frames it, and the applicable limitation follows that description. Article 524 bars any claim to rescind or to reduce or supplement the price after one year from delivery, whether actual (the property placed at the buyer's disposal so that he can possess and use it) or constructive (the seller leaving the property free for the buyer with permission to take it and no obstacle to possession). Both of the buyer's claims rested on the shortfall in area and were therefore, properly characterised, claims to reduce the price. The buyer had admitted in his statement of claim, and in a signed certificate of completion of payment and final release, that he took actual delivery on 17 March 2019. More than a year had passed before he sued, and he had not alleged any suspension or interruption of the period.
Shortfalls in area are often discovered only after handover. The judgment shows that describing the claim as compensation or as recovery of an overpayment does not avoid the one-year bar, which runs from delivery rather than from discovery, and that handover acknowledgments and final release certificates can fix the start of the period. It was decided under the 1985 Civil Transactions Law.
| Article 524 of the Civil Transactions Law (Federal Law No. 5 of 1985) — text of article 524 Decided under this law; it has been replaced by Civil Transactions Law 2025. |
“التكييف القانوني السليم لهذين الطلبين على ضوء الواقع في الدعوى أنهما طلبان بإنقاص الثمن للوحدة المبيعة كونهما مؤسسين علي النقص في المساحة”Short quotation from the judgment as published by the court. The full judgment is on the court’s official service.
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