Dubai is a booming real estate market with a large number of investors and developers. With such a vast and complex market, it is inevitable that disputes will arise. These disputes can range from minor disagreements between landlords and tenants to more complex issues involving multiple parties. Fortunately, Dubai has a well-established legal system that provides effective mechanisms for resolving real estate disputes. Here are some steps to follow if you find yourself in the midst of a real estate dispute in Dubai.
Seek legal advice
The first step in resolving any real estate dispute is to seek legal advice. This is especially important if the dispute involves a large sum of money or complex legal issues. A lawyer who specializes in real estate law can provide guidance on your legal rights and obligations and help you understand the legal process.
Negotiation and mediation
The next step is to attempt to negotiate a settlement with the other party. This can often be achieved through informal discussions or mediation. Mediation is a process in which a neutral third party, known as a mediator, helps the parties reach a mutually acceptable solution. Mediation can be less costly and time-consuming than going to court and can often result in a more satisfactory outcome for both parties.
Arbitration
If the dispute is not resolved between the parties who have signed a sale and purchase agreement that contains an arbitration clause, the dispute must be resolved through arbitration with the consent of both parties in writing. However, there are certain exceptions where the real estate matter cannot be referred to the arbitration centre, such as disputes involving public property. In such cases, the court has jurisdiction, regardless of any arbitration agreement between the parties. While arbitration is generally quicker and less expensive than litigation, it is important to note that if the other party does not comply with the arbitration clause, the court can step in to safeguard the interests of investors who have been affected by the dispute.
Enforcing Arbitral Awards in Dubai Real Estate Disputes
In accordance with Article 55 of Federal Law Number 6 of 2018, a party seeking to enforce an arbitral award must submit a request for its ratification to the Chief Justice of the Civil Court, along with the following documents: the original award or a certified copy, a copy of the arbitration agreement, a legally translated and duly attested and notarized arbitral award for foreign awards, and a copy of the minutes of deposit of the award.
Upon receiving the required documents, the competent court will confirm the award and order its enforcement within 60 days of the request, unless there are specific reasons under the law to set aside the award.
Licensed Authorities for Resolving Real Estate Disputes in UAE
The UAE has several prominent authorities licensed to act upon real estate dispute, such as the Dubai Land Department’s Amicable Settlement Centre (DLD-ASC), Legal Affairs Department of DLD, Cancelled Project Committees for liquidation, Judicial Committee for returned cheques, Rental Dispute Settlement Committee, and the Dubai International Arbitration Centre (DIAC). Ultimately, the Dubai property courts have jurisdiction over all property disputes, and decisions can be appealed to higher courts.
Court Jurisdiction and Structure for Real Estate Disputes in Dubai and DIFC
Regarding the court structure for large real estate disputes, Article 32 of the Civil Procedure Law stipulates that if the parties are located within the jurisdiction of multiple courts, the court with jurisdiction will be the one where the property, or a part of the property, is situated. While the Dubai International Financial Centre (DIFC) free zone has specific jurisdiction, other free zones in the Emirates do not. Therefore, any disputes within these zones must be referred to Dubai Courts.
In addition, Dubai has established a Real Estate Court that holds exclusive jurisdiction over real estate matters. This court is an extension of the Court of First Instance, and cases may involve any amount. Court fees must be paid, with a maximum of AED 40,000 (UAE Dirhams forty thousand).
In contrast, the DIFC has its own courts, as outlined in DIFC Law Number 9 of 2004, which sets forth the roles and responsibilities of the DIFC Courts. Dubai Law Number 16 of 2011 has allowed contracting parties to agree to DIFC Court jurisdiction even when there is no connection to DIFC courts.
DIFC courts have exclusive jurisdiction over civil and commercial cases within certain categories, including claims involving DIFC companies, contracts performed wholly or partially in DIFC, transactions performed in DIFC, appeals against DIFC laws, and claims that give DIFC Courts exclusive jurisdiction under DIFC rules.
Limitation period for filing a real estate claim in the UAE
The period within which an aggrieved party can file a civil claim is determined by several clauses in the Federal Law Number 5 of 1985 on the Civil Transactions Law (the Civil Code). While the Civil Code does not specifically mention the limitation period for the real estate sector, Article 473 of the Civil Code provides that any contractual claim must be filed within 15 years from the date of the dispute or claim. The Civil Code also stipulates that an appeal must be filed within 30 days of the Court of First Instance’s judgment and within 60 days of the Appeal Court’s judgment to the Court of Cassation.
In the case of architectural default in building contracts, Article 880 of the Civil Code sets a ten-year time limit from the date of knowledge of the default. However, the Legal Affairs of Dubai Land Department does not specify a time limit for filing a complaint about the termination of a Sale and Purchase Agreement (SPA). If the buyer fails to fulfill their contractual obligations, such as meeting the payment schedule, the complaint can be filed at any time after signing the SPA. Once a complaint is filed, the authority provides a 30-day period for the buyer to remedy the breach. Additionally, the developer can file a complaint about the termination of the agreement if the buyer consistently fails to meet the payment schedule and the construction is 80% complete.
Possible Procedures for Filing an Appeal
Different organizations have specific procedures for filing an appeal or objection against their legal decisions. If a party is unhappy with the decision of the Real Estate Court, they may file an appeal before the Court of Appeal within thirty days of receiving the judgment. For an arbitral award, the law allows a party to challenge it under certain circumstances, including absence of an arbitration agreement, incompetency of either party at the time of concluding arbitration agreement, or the award containing subject matter beyond the scope of the tribunal. Appeals against the decision of the Rental Dispute Committee can be filed before the Appellate Division, except for claims less than the value of AED 100,000. If a buyer is dissatisfied with a decision made by the DLD Legal Affairs Department, they can object before the Civil Court in accordance with Law Number 9 of 2009.
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