Landmark Decision for Property Investors in Dubai: Cancellation of Booking Form, Refund of 10% Deposit and Payment of Compensation

Background & Facts

On 15 February 2024, the client executed a booking form with a prominent Dubai-based developer for the reservation of a real estate unit. In accordance with the terms, the client paid a total of AED 601,546 as a reservation fee, in addition to AED 121,493 towards the Dubai Land Department (DLD) registration fee.

The client awaited the issuance of the Sale and Purchase Agreement (SPA) from the developer, which was only provided after a delay of four (4) months. Upon review, it became evident that the SPA was heavily one-sided and overwhelmingly favoured the developer. All attempts by the client to request revisions to certain clauses were unsuccessful, ultimately prompting the client to instruct our Lead Counsel (Middle East) to initiate legal proceedings.

Legal Proceedings & Arguments

On 13 December 2024, a Claim was filed on behalf of the client seeking the cancelation of the booking form and recovery of the full amount paid, totalling AED 723,039/-, along with 5% legal interest. Additionally, the Claim included a request for compensation in the amount of AED 100,000/- for damage suffered by the client as a result of the developer’s unlawful conduct.

        Developer’s Arguments

• Both parties agreed in the Booking form that the down payment will not be refunded in the event of cancellation.
• The purchaser (the client) has failed to fulfil his obligations by refraining from making payment for the subsequent instalments according to the booking form and refusing to sign the SPA.

       Our Arguments

• The client fulfilled his obligations by paying the down payment and DLD’s fees and was awaiting to sign the SPA.
• The client is entitled to request amendments to the SPA prior to execution. In the absence of mutual agreement on its terms, he retains the legal right to withdraw from the transaction.
• The Developer’s unreasonable rejection to revise the SPA terms prevented the transaction from being completed, thereby causing material harm to the client. Accordingly, the client is entitled to compensation in the amount of AED 100,000/- for the damage sustained.

Judgment & Enforcement

On 19th February 2025, the Dubai Courts issued their ruling:

1. The booking form is invalid.
2. The refund of the full amount paid of AED 723,039/-, plus legal interest at 5% per annum from the date of the legal Claim until payment.
3. The developer is required to pay compensation to the client in the amount of AED 50,000/- plus legal interest at 5%.
4. The developer is required to pay the court fees and expenses paid by the client.

The judgment was issued based on sound legal reasoning and in full accordance with UAE Real Estate laws. It was considered final and enforceable, leaving no valid grounds for appeal by the developer.

On 12 May 2025, an Enforcement Order was successfully obtained from the Dubai Courts against the developer.

If you are experiencing issues with an investment in the UAE, or would simply like more information on our fixed fee approach a member of our team will be happy to take your call on a confidential basis at 01438 840258 or via email to admin@judicaregroup.com

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Getting in touch will allow us to understand your individual circumstances and discuss with you your concerns and objectives. Working with you we can then decide upon the correct strategy to approach and find the solution which is right for you.