Developers hang on to defaulters initial payments

Extract/ Highlights:
Developers in Dubai are no longer moving court against defaulters but are cancelling their sales and purchase agreements (SPAs) instead, retaining whatever monies have been paid till the time of default.

“We find that developers are generally looking to cancel sale and purchase agreements (SPA) using the provisions of Decree No 6 of 2010 with the assistance of the Land Department of Dubai, rather than take investors to court……

With the exception of a few cases, Ludmila Yamalova, Partner, Al Sayyah Advocates, says developers have not been pursuing investors in court for outstanding payments.

She believes one of the main reasons for this is that developers themselves may be in default of contractual obligations.

Particularly where construction has been significantly delayed, escrow funds mismanaged and regulatory registration requirements ignored.

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