Dubai court orders developer to refund Dh1.8m plus compensation in Heart of Europe dispute

A Dubai court has ruled against a real estate developer in a dispute over a property in The Heart of Europe project, ordering the company to refund more than Dh1.8 million to a buyer and pay Dh150,000 in compensation.

The court cancelled the purchase agreement and directed the developer to repay Dh1,805,040, with annual interest of 5 per cent calculated from the date the judicial claim was filed until the full amount is paid. The developer must also cover court fees, expenses and Dh1,000 in legal costs.

Agreement and payments

The case stemmed from a property purchase agreement signed on 17 April 2025 for a unit in the second phase of The Heart of Europe. The agreed purchase price was Dh1,651,377. According to the buyer, they paid Dh100,000 on 16 April 2025, followed by Dh1.7 million on 17 April – covering the final payment, value-added tax and Dubai Land Department fees – plus an additional Dh5,040 in administrative fees. The total sum the buyer sought to recover was Dh1,805,040.

The buyer requested the court to annul the agreement, order a refund with 9 per cent annual interest from 17 April 2025, and award compensation equal 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 contract, the developer had 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 the payment of registration fees. Another clause mandated that the property be reserved in the buyer’s name and barred the developer from marketing it, creating third-party rights over it or disposing of it during the specified period.

Developer’s defence

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

The buyer also 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 establish that the original property had been sold to a third party, but it demonstrated that a replacement had been offered and that no accepted final agreement amending the original arrangement had been proved.

Court findings and ruling

After examining the documents, the court determined 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 unit was no longer an off-plan property at the relevant stage. The judgment relied on provisions of the UAE Civil Transactions Law governing contractual good faith and rescission, as well as Dubai’s property registration legislation requiring transactions to be registered according to applicable rules.

The court ordered the agreement rescinded and directed that both parties be restored, as far as possible, to their pre-contract positions. Consequently, the developer must return all amounts paid by the buyer.

The court rejected the demand for 9 per cent interest from the original payment date, instead awarding interest at 5 per cent annually from the date the judicial claim was filed until full repayment. It also approved Dh150,000 in compensation for the loss of investment benefit caused by the developer’s failure to complete the transaction. However, the court dismissed the additional claim for 10 per cent in expected property appreciation, ruling that the alleged increase had not been proven through expert evidence.

In total, the fixed amounts awarded come to Dh1,956,040, excluding interest and court fees and expenses.