Dubai Court Orders Developer to Refund Dhs12.4 Million to Investor Over Undelivered Floating Villa
A Dubai appellate court has ruled in favor of an Arab investor, instructing a real estate developer to reimburse Dhs12.4 million, along with a 5 percent interest from Nov. 19, 2024, until the full amount is paid.
The investor had entered into an agreement to purchase a floating villa, but the developer failed to meet its commitment regarding the timely delivery of the property.
Speaking to Al Khaleej newspaper, the investor disclosed that he fell prey to a misleading property advertisement circulating on social media. He stated that the campaign was highly persuasive, making the project seem like a significant development in Dubai.
The developer reportedly presented enticing deals and assured lucrative returns, only for the investor to later realize that these promises were unfulfilled. Moreover, the project had no direct affiliation with the renowned development it was purportedly linked to.
Despite securing a court ruling in his favor, the investor has yet to recover his funds due to the developer’s financial collapse, including the closure of company bank accounts and a declaration of bankruptcy.
He further revealed that several other investors had been similarly misled and are now collaborating to take additional legal steps against the developer.
Calling for stricter regulations, the investor urged authorities to enforce more rigorous controls over real estate advertisements—particularly on social media—and mandate official permits for property promotions.
He emphasized that this case underscores the need for greater investor awareness regarding potential risks in the real estate sector. He advised prospective buyers to conduct thorough due diligence before making large investments.
Some deceptive ads exploit the names of prestigious projects to create a false sense of credibility, highlighting the need for increased transparency and disclosure to safeguard investors’ rights, he added.
The case dates back to August 2, 2016, when the investor signed a purchase agreement with the developer for a floating villa, committing to payments in accordance with the contract schedule.
In 2019, the agreement was revised to introduce new financial conditions and a modified payment plan. The investor accepted the amendments, influenced by the developer’s assurances of timely delivery and an 8 percent annual return on investment.
However, the developer failed to honor the revised terms, neither delivering the property on schedule nor providing the promised returns. Consequently, the investor initiated legal proceedings to annul the contract and reclaim his funds.
In response, the developer attributed the delays to circumstances beyond his control. However, the court dismissed these claims, ruling that the delays stemmed from poor project management rather than external factors. The court further noted that no credible evidence linked the setbacks to the Covid-19 pandemic or regulatory changes.
As a result, the court ordered the developer to refund Dhs12.4 million to the investor, with an additional 5 percent legal interest until full repayment. Additionally, the developer was directed to compensate the investor with Dhs1 million for financial losses caused by the prolonged delay. Legal fees and associated court expenses were also to be borne by the developer.
The court’s decision acknowledged that, prior to taking legal action, the investor had spent two years attempting to reach an amicable resolution with the developer, but all negotiations proved unsuccessful.
