Real estate: UAE case law

A buyer's claim to validate a Sharjah apartment sale cannot be dismissed without examining the foreign-ownership rules

An action for validity and enforcement of a contract is a merits action: the court examines whether the contract was validly formed and enforceable, including the parties' capacity and any nullity of public order, so that its judgment can stand in place of…

Contradictory judgments of the same emirate's courts are not a conflict for the Federal Supreme Court to resolve

The Federal Supreme Court's conflict jurisdiction covers clashes between the federal judiciary and local judicial authorities, or between the judicial authorities of different emirates, where each claims or declines jurisdiction or each issues a judgment…

Claims against a contractor or engineer for building defects are barred three years after the defect is discovered

Under Article 883 of the Civil Transactions Law, a claim under the guarantee owed by the contractor or the engineer for the collapse of a building or defects in it cannot be heard after three years from the collapse or the discovery of the defect.…

A manager whose company took off-plan payments before it was licensed as a developer is jointly liable with it

A company that has been dissolved keeps its legal personality for the needs of its liquidation until the liquidation ends, so claims over its past dealings can still be brought, and its manager can be sued personally for acts before the liquidation. A…

A sale of a business binds the parties once agreed; registration governs only when ownership passes

A business (محل تجاري) is the set of tangible and intangible assets used for a commercial activity, physical or virtual (Article 36 of the 2022 Commercial Transactions Law). Its sale is a consensual contract formed by offer and acceptance, which obliges…

A creditor can set aside an insolvent debtor's transfers within three years of learning why they harm it

All of a debtor's assets secure his debts. A creditor may have a debtor's disposal declared ineffective against it (Articles 391, 396 and 397 of the Civil Transactions Law) if its right arose before the disposal and is due and undisputed; what matters is…

On termination of a completed-unit sale, the contractual late-payment penalty falls away and damages follow general rules

Dubai Law No. 13 of 2008 applies only to units still under construction; once a unit exists or is registered in the Real Property Register under Law No. 7 of 2006, that Law and its Article 11 procedure no longer apply, even if the contract was made…

A developer that sues instead of terminating lets the off-plan buyer avoid termination by paying before final judgment

Once the Land Department has issued its document confirming the procedure under Article 11 of Dubai Law No. 13 of 2008 (as amended by Law No. 19 of 2020), a developer may terminate an off-plan sale on its own without going to court, but it may instead sue.…

A signed off-plan reservation form is a binding sale, and without interim registration the developer must refund

A sale is concluded when offer and acceptance meet on the property and the price; no written form is required, and agreement may be shown by conduct or by exchanged correspondence. An off-plan sale is a complete sale subject to special rules, under which a…

Claims over a property's missing area are price-reduction claims, barred one year after handover

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…

A developer that never registered an off-plan sale in the interim register must refund the price and pay damages

Under Articles 3 and 5 of Dubai Law No. 13 of 2008, every disposition of an off-plan unit (one that does not yet exist, is under construction or is incomplete) must be entered in the interim real property register, whether the unit was sold before or after…

Group companies behind one property project are jointly liable, and VAT charged on an undelivered hotel unit is refundable

In real estate investment several companies with separate legal personality and assets may share a single project and so be jointly liable for its obligations; whether they do is a question of fact. Money paid for a debt whose cause never arose, or later…

A mortgage securing present and future facilities survives repayment of one facility, and a guarantor-mortgagor can be sued first

Under Dubai Law No. 14 of 2008 on mortgages, a mortgage gives the creditor a real right over the property to be paid from its price ahead of ordinary and later creditors. Applying to sell the mortgaged property is only an option: the creditor may instead…

A sale contract e-signed through the Land Department's system binds the buyer and defeats a bare forgery claim

Under Articles 54 to 58 of the Evidence Law (Federal Decree-Law No. 35 of 2022), electronic evidence, including electronic records, signatures and correspondence such as email, has the same effect as written evidence; formal electronic evidence, including…

Late deposit of instalments into escrow does not entitle an off-plan buyer to terminate before completion is due

An off-plan buyer cannot terminate merely because the developer paid his instalments into the project escrow account late. Dubai Law No. 8 of 2007 on real estate development escrow accounts contains no provision allowing a buyer to terminate where the…

A co-owner may force a sale of the whole property only if co-owners living there are not harmed

Under Article 1166 of the Civil Transactions Law (as replaced by Federal Decree-Law No. 30 of 2020), where co-owned real property cannot be divided in kind, or division would cause harm or a serious loss of value, any co-owner may sell his share to another…

A mortgaged property's auction award can be appealed only for defects in the bidding, its form or a missed stay

Under Article 300(1) of the Civil Procedure Code, a judgment awarding a property at auction may be appealed only for a defect in the bidding procedure or in the form of the judgment, or because it was issued without a stay that was legally required.…

A developer in breach of its own obligations cannot use the Land Department procedure to cancel an off-plan sale

Article 11 of Dubai Law No. 13 of 2008 lets a developer terminate an off-plan sale and retain no more than a set percentage of the price, according to the stage of completion, after notifying the Land Department, which gives the buyer 30 days to perform.…

Opening bankruptcy of an LLC does not extend to its partners, and the bankruptcy court cannot rule on managers' personal liability

A creditor of a limited liability company may seek its bankruptcy if it has stopped paying a due commercial debt because its finances are disturbed. Refusal to pay without a legitimate reason is evidence against the debtor, but there is no cessation if the…

A developer's mortgage of a project has no effect if the lender did not pay the loan into escrow

Under Article 13 of Dubai Law No. 8 of 2007 on Real Estate Development Escrow Accounts, a finance institution lending to a developer against a mortgage of the project must deposit the loan amount in the project's escrow account. The General Assembly held…

Funds in a Dubai project escrow account cannot be attached by any creditor of the developer

Article 9 of Dubai Law No. 8 of 2007 on Real Estate Development Escrow Accounts dedicates each project's escrow account exclusively to building the project and bars attachment of its funds for the developer's creditors. The bar is absolute: no…

Seller owes no double deposit when the master developer's refusal of a no-objection certificate blocks the transfer

Payment of a deposit (earnest money) shows that the parties intended the sale to be final; unless the agreement or custom provides otherwise, a recipient who withdraws must return it doubled and a payer who withdraws forfeits it. A suspensive condition…

When a developer's instalment sale is terminated, it refunds the instalments less a fair rent for the buyer's use

Where a transaction is commercial for one party and civil for the other, the Commercial Transactions Law governs both parties' obligations unless the law or the parties provide otherwise. Under its instalment-sale rule, if the buyer fails to pay an…

Bank loans earn compound interest until the account is closed, and suing to sell the mortgaged home does not close it

Loans granted by banks are commercial transactions whatever the borrower's status or purpose, and produce interest automatically during the loan, at the agreed rate or otherwise at the market rate, compounded unless agreed otherwise, even if interest…

Service-charge claims under Dubai's jointly owned property law belong exclusively to the Rental Disputes Centre, including older debts

Article 42 of Dubai Law No. 6 of 2019 on jointly owned real property, in force from 9 November 2019, gives the Rental Disputes Settlement Centre exclusive jurisdiction over all disputes concerning the rights and obligations under that Law, and Article…

A developer may terminate an off-plan sale only through the Land Department procedure, which buyers can contest in court

Under Article 11 of Dubai Law No. 13 of 2008, as replaced by Dubai Law No. 19 of 2020, a developer alleging an off-plan buyer's breach must follow a public-order procedure: notify the Land Department, which verifies the breach, gives the buyer 30 days'…

A good-faith buyer is protected against the true owner when the seller's title is later invalidated

A disposition made by an owner whose own transaction or title is later invalidated, in favour of a third party acting in good faith, is effective against the true right-holder, in actions of unenforceability and in title claims alike, provided the third…

Proceedings against a party who had already died are cured by joining the heirs at the same level

In principle proceedings can be brought only against living persons, and a claim or appeal against someone who died before it was filed is non-existent. But the rule exists to protect the right of defence, and nullity is not declared where the purpose of a…

A claim fee paid late but before the first hearing makes the claim effective from the date of payment

Under Articles 44, 45 and 47 of the Civil Procedure Code a claim is registered and effective from the filing of the statement of claim only if the fee is paid within three working days of the payment notice; otherwise the supervising judge may declare the…

A request to sell the whole co-owned property must be made in the claim, not to the enforcement judge

Article 1166(2) of the Civil Transactions Law, as amended, allows a co-owner who cannot sell his share to ask for the whole property to be sold. Such requests must be made in a substantive action, where they are granted, refused or declared inadmissible.…

An unlicensed real estate broker cannot recover commission, compensation or expenses under a void brokerage agreement

Dubai legislation (Articles 3 and 24 of Local Order No. 32 of 1987 regulating real estate brokerage and Articles 3 and 21 of Regulation No. 85 of 2006 on the Register of Real Estate Brokers) prohibits any natural or legal person from brokering the sale,…

A debtor's only home cannot be sold in execution on the ground that it exceeds his housing needs

Under Article 106(2) of the Civil Procedure Regulation (Cabinet Resolution No. 57 of 2018), the house used as a residence by the debtor and the dependants living with him may not be attached, unless it is mortgaged and the debt arises from its price. The…

Off-plan registration rules do not void a sale where the property was completed before suit or later registered

Article 3 of Dubai Law No. 13 of 2008 voids sales of off-plan units not entered in the interim real property register. The General Assembly held that the Law covers units that are still under construction and exist only on plan. Where a unit not previously…

A contract's clear terms bind the parties; a buyer who accepted unfinished infrastructure cannot rescind because of it

The General Assembly restated that a contract is the law of the parties: neither may revoke, amend or rescind it except by agreement or on grounds the law allows, and clear terms may not be departed from by interpretation, since they express the parties'…

An entry in Dubai's interim real property register is an official record binding on all unless forged

Under Dubai Law No. 13 of 2008 every disposition of an off-plan unit, whether made before or after the Law, must be entered in the interim real property register kept by the Land Department; the developer must apply for it (Articles 2, 5 and 8). Under the…

Dubai's 2020 off-plan termination rules apply to earlier contracts, and courts may set the developer's retention below the maximum

Dubai Law No. 19 of 2020, which replaced Article 11 of Law No. 13 of 2008 on the Interim Real Property Register, applies retroactively to off-plan contracts governed by the 2008 Law, including terminations already made (except those annulled by a final…

Unregistered sales of land granted to UAE nationals in Dubai give the buyer no title and no limitation defence

Under the Ruler of Dubai's instructions of 2 September 1994 (published on 18 November 1994), dispositions of land granted by the government to UAE nationals without the Ruler's permission are void as a matter of public order. Earlier sales are not void, as…

A buyer under an unregistered contract may claim attached property if he shows evidence of ownership or possession

Although ownership of real property passes, between the parties and against others, only on registration (Article 1277 of the Civil Transactions Law), Article 166(1) of the Civil Procedure Regulation (Cabinet Resolution No. 57 of 2018) allows a third party…

The Abu Dhabi real estate register is conclusive proof of ownership and can be challenged only for fraud or forgery

Under Articles 2, 3, 4 and 6 of Abu Dhabi Law No. 3 of 2005 and its implementing regulation, the real estate register kept by the municipal registration department is binding on everyone and its entries may be challenged only for fraud or forgery. Every…

A sale of Abu Dhabi land not concluded before the municipal registration authority is void and yields no damages

Under the directive of the President of the State of 5 May 2010, which has the force of law, no court in Abu Dhabi may recognise a disposition transferring ownership of, or a real right over, any property in the emirate unless it is made before the…

Property investment contracts are commercial and belong to the Commercial Court, not the rental disputes committee

A lease governed by Abu Dhabi Law No. 20 of 2006 presupposes that the tenant uses the premises himself. An investment contract, under which an investor exploits property by way of business, re-letting its units for profit, erecting buildings at his own…

A co-owner leaving joint ownership of indivisible property: valuation, offer to co-owners, then sale of the whole by auction

Where jointly owned real property cannot be divided in kind without serious loss, a co-owner who wants to exit may ask for sale of his share or of the whole property. In either case the trial judge appoints an expert to value the share by reference to the…

A registered mortgage is enforceable for the unpaid balance; part payment and interest disputes do not stop the sale

A notarised instrument, including a duly registered mortgage securing a certain, liquidated and due debt, is an execution title under Article 212 of the Civil Procedure Law, so the creditor can enforce it without first suing. Under Articles 1419, 1430,…

An unregistered Abu Dhabi lease bars a rent claim even after a court has referred the case to the committee

Under Article 6 of Judicial Department Resolution No. 25 of 2018, no rent claim is registered unless the lease is attached and registered with the municipality. This is a mandatory public-order rule, so the rental disputes committee at either level must of…

A buyer's agreed waiver of claims for late completion of an off-plan villa was upheld as a valid exemption from contractual liability

Parties may include terms that increase, reduce or exclude a party's contractual liability, provided they do not conflict with mandatory rules, public order or morals. Article 296 of the Civil Transactions Law voids only clauses excluding liability for a…

When a land sale is void, the buyer recovers the price and unjust-enrichment compensation even if he shared the fault

Unjust enrichment is an independent source of obligation (Articles 318 and 324 of the Civil Transactions Law): a person enriched at another's expense without lawful cause must compensate, up to the lesser of the gain and the loss. A void contract only…

An Abu Dhabi land sale is formed by agreement; registration only passes title, and lifting the sale ban validated it

An action for validity and enforceability of a sale seeks a judgment that, once registered, takes the place of the seller's duty to transfer ownership; the court must examine any dispute over the seller's title and grant the claim only if transfer and…

A court may raise a developer's agreed delay compensation to match the buyer's loss despite a lump-sum clause

Under Article 390 of the Civil Transactions Law parties may fix compensation in advance, but the court may, at either party's request, adjust it to equal the actual loss, and any agreement to the contrary is void. A clause in an off-plan sale stating that…

A buyer may rescind an off-plan plot sale and recover the price when the developer has not built the infrastructure

In bilateral contracts, if one party fails to perform, the other may, after notice, seek performance or rescission, and the judge may rescind and award compensation where justified. Contracts must be performed in good faith and include what follows from…

Under the 2011 registration rules, an unregistered Abu Dhabi lease did not make a rent claim inadmissible

Executive Council Chairman Resolution No. 4 of 2011 requires leases of up to four years under Law No. 20 of 2006 to be registered with the municipality, and provides that unregistered leases are not recognised by 'competent authorities' (government and…

A purchase registered in a nominee's name belongs to the hidden principal, but the principal must prove the arrangement

Contracting through an intermediary is permitted unless the law provides otherwise. A person who lends his name to a purchase is merely an agent of the true buyer under an undisclosed agency, so registration of the sale in his name transfers ownership, as…

An agreed delay penalty is payable without proof of loss unless the debtor proves none occurred or it is excessive

A penalty clause fixes in advance the loss the parties expect from a breach, so the creditor need not prove loss; the debtor must prove that no loss occurred or that the agreed amount is excessive, and the judge may then adjust it (Article 390 of the Civil…

A creditor can have a debtor's sale of property set aside against it where the debts exceed his assets

Where a debtor's due or deferred debts exceed his assets, a creditor whose claim is due may ask that a disposal by the debtor that reduces his assets or increases his liabilities be declared unenforceable against him (Articles 396 to 399 of the Civil…

Under apparent agency a land sale binds the owner, and only the owner can claim under it

A contract may be made through an agent, whose authority under the agency agreement governs his relationship with the principal; a third party must normally check the agent's authority. But where the principal's own conduct creates an outward appearance…

A seller of registered land who never transferred title at the Land Department can be made to refund and compensate

Delivery of a sold property may be actual or constructive, for example where the seller keeps it at the buyer's request, but ownership of registered land passes only by registration at the Land Department. The trial court assesses whether loss occurred and…

A mortgagee bank may, but need not, enforce against the mortgaged property before other assets

A secured creditor may enforce first against the mortgaged real estate, but this is an option, not an obligation: it may pursue the debtor's other assets to recover its debt. Whether a creditor committed a fault in conducting enforcement is a question of…

A sale of RAK property to a buyer not entitled to own it there is void and only the price is returned

A contract is void if the law prohibits dealing in its subject matter (Article 201 of the Civil Transactions Law). In Ras Al Khaimah, freehold ownership by others than UAE and GCC nationals was confined to the investment projects designated by the…