A Dubai court has ordered a property developer to refund more than AED 1.8 million to the buyer of a unit in The Heart of Europe project and pay AED 150,000 in compensation. The court found that despite receiving the agreed payments, the company failed to complete the transaction or register the property in the buyer’s name.

Under the ruling, the property purchase agreement was rescinded, and the developer was ordered to refund AED 1,805,040 to the buyer. The amount will also accrue annual interest of 5 per cent from the date the lawsuit was filed until full payment.

The company was also ordered to pay court fees, other legal expenses and AED 1,000 in lawyers’ fees.

Contract details and payments made

The case relates to an agreement to purchase a property in the second phase of The Heart of Europe project, signed on April 17, 2025.

According to the lawsuit, the agreed price of the property was AED 1,651,377.

The buyer said he paid AED 100,000 on April 16, 2025, followed by approximately AED 1.7 million the next day to cover the outstanding purchase price, value-added tax and Dubai Land Department fees.

A further AED 5,040 was paid in administrative fees, bringing the total refund sought by the buyer to AED 1,805,040.

The buyer asked the court to rescind the agreement, order the company to refund the amount with annual interest of 9 per cent from April 17, 2025, and award compensation equivalent to 20 per cent of the property’s purchase price.

The compensation claim comprised a 10 per cent annual return on investment and a further 10 per cent for the property’s expected increase in value.

Company Pledged 10% Annual Return

Under the terms of the contract, the buyer was offered an annual return of 10% for 10 years, provided the property’s full purchase price was paid. Arrangements were also made for the property to be repurchased at the end of this period.

The contract required the parties to sign the final sale and purchase agreement within seven days of the first instalment and payment of the property registration fees.

Another clause required the developer to reserve the property in the buyer’s name and, during the specified period, refrain from putting it back on the market, granting rights to third parties or otherwise transferring it.

Developer’s Defence in Court

The developer rejected the buyer’s claims, arguing that the signed document was merely a property reservation form and that the buyer had obstructed the registration process.

The company also questioned the validity of copies of the payment receipts and maintained that the project had been completed.

To support its position, the company submitted a statement dated September 29, 2026, showing total payments of AED 1,805,041.

It also submitted a report from the Dubai Land Department confirming that the project and the building concerned were 100% complete.

Buyer Offered Replacement Property

During the proceedings, the buyer said the developer had offered him a larger property as a replacement on June 25, 2025, subject to written acceptance.

After reviewing correspondence between the parties, the court found that the documents did not prove the original property had been sold to a third party.

However, the correspondence showed that the company had offered a replacement property, although no final agreement accepted by both parties to amend the original contract had been established.

Court Rules on Breach of Contractual Obligations

After reviewing the evidence, the court concluded that the buyer had paid the required amounts, but the developer had failed to fulfil its obligations to finalise the transaction and formally register the property.

The court also found that the building had been completed at the relevant time and that the property therefore could not then be considered an off-plan unit under construction.

In its ruling, the court cited provisions of the UAE Civil Transactions Law concerning good faith in the performance of contractual obligations and contract termination, as well as Dubai’s property registration laws.

Under these provisions, property transactions must be registered in accordance with legal requirements.

The court ordered the contract terminated and directed that, as far as possible, the parties be restored to their positions before the contract was concluded. The developer was therefore ordered to refund the specified amount to the buyer.

Compensation Awarded, Buyer’s Claim Partially Rejected

The court rejected the buyer’s request for annual interest of 9% from the date of the initial payment. Instead, it ruled that the refundable amount would accrue annual interest of 5% from the date the lawsuit was filed until full payment.

The court also ordered the developer to pay Dh150,000 in compensation because the buyer had been deprived of potential investment returns after the transaction was not completed.

However, the court rejected a claim for additional compensation equivalent to 10% for a potential increase in the property’s value, ruling that the alleged increase had not been substantiated by expert evidence.

Total amount awarded exceeds Dh1.95 million

Under the ruling, the refundable principal and compensation awarded to the buyer total Dh1,955,040.

Including Dh1,000 in legal fees, the total fixed amount awarded rises to Dh1,956,040.

This figure excludes annual interest of 5 per cent, court fees and other case-related expenses.