Dubai court orders developer to refund Dh1.95m over Heart of Europe property dispute

The Dubai Court of First Instance cancelled the purchase agreement and directed the developer to refund Dh1,805,040 to the buyer. In addition, the court awarded annual interest of 5 per cent on that amount, calculated from the date the judicial claim was filed until the debt is fully paid. The developer was also ordered to pay the court fees, expenses, and Dh1,000 in legal costs. The total fixed amount awarded, excluding interest and court expenses, stands at Dh1,956,040.

Agreement and payments

The case revolves around a property purchase agreement signed on 17 April 2025 for a unit in phase two of The Heart of Europe. The agreed purchase price was Dh1,651,377. According to the claim, the buyer paid Dh100,000 on 16 April 2025, followed by Dh1.7 million on 17 April, which covered the final instalment, value-added tax, and Dubai Land Department fees. An additional Dh5,040 was paid in administrative fees. The total amount the buyer sought to recover was Dh1,805,040.

The buyer requested the court to cancel the agreement, order a full refund with 9 per cent annual interest from 17 April 2025, and award compensation equivalent to 20 per cent of the purchase price. The claim also included a 10 per cent annual investment return and a further 10 per cent for expected property appreciation.

Under the terms of the agreement, the developer offered a 10 per cent annual investment return for 10 years, subject to full payment, along with a buyback arrangement after the decade-long period. The agreement required both parties to sign the final sale and purchase contract within seven days of the first instalment and payment of the relevant registration fees. Another clause stated that the property would be reserved in the buyer’s name and prohibited the developer from marketing it, creating third-party rights over it, or disposing of it during the specified period.

Developer’s defence and court findings

The developer contested the claim, arguing that the document was only a reservation form and that the buyer had obstructed the registration process. The company also challenged photocopies of payment receipts and maintained that the project had been completed. To support its position, the developer submitted an account statement dated 29 September 2026, showing payments totalling Dh1,805,041, as well as a Dubai Land Department statement indicating that the relevant project and building were 100 per cent complete.

The buyer told the court that the developer had offered a replacement property on 25 June 2025. The proposed alternative was larger, and written acceptance was required. The court found that the correspondence did not prove that the original property had been sold to a third party. However, it demonstrated that a replacement had been offered and that no accepted final agreement amending the original arrangement had been established.

After reviewing the documents, the court concluded that the buyer had paid the required amounts but the developer had failed to finalise the sale and register the property. The court also noted that the building was already complete, meaning the property was not an off-plan unit at the relevant stage.

Judgment and compensation

The court relied on provisions of the UAE Civil Transactions Law governing contractual good faith and rescission, as well as Dubai’s property registration legislation, which requires real estate transactions to be registered in accordance with applicable rules.

The judgment ordered the agreement rescinded and the parties restored, as far as possible, to their pre-contract positions. Consequently, the developer must return the amount paid by the buyer.

The court rejected the request for 9 per cent interest from the original payment date and instead awarded interest at 5 per cent annually from the date the judicial claim was filed until the debt is paid in full.

It also granted Dh150,000 in compensation for the loss of investment benefit resulting from the developer’s failure to complete the transaction. However, it dismissed the additional claim for 10 per cent in expected property appreciation, finding that the alleged increase had not been established through expert evidence.