In the thriving secondary real estate market of Dubai, transactions are often formalized through the Unified Contract F, serving as the Memorandum of Understanding (MOU) for property sale and purchase agreements. This article explores the rights and obligations of both Buyers and Sellers within this framework, particularly focusing on scenarios where either party fails to fulfill their contractual commitments.
Market Practices
A distinctive feature of Dubai's secondary sales market is the customary practice of Buyers initiating a deposit cheque equivalent to 10% of the property's selling price. This cheque, made out in the seller's name, is non-cashable and held in the custody of the Seller's broker. Its primary function is to signify the Buyer's commitment and acts as a placeholder until the successful transfer date, at which point it is replaced with a manager cheque, cashable by the Seller for the full selling price.
Protection of Deposit Amount
Crucially, the deposit cheque is held securely by the Seller's broker. The broker is prohibited from disposing of or cashing the cheque without obtaining explicit written orders from both the Buyer and Seller. In cases of dispute, the deposit amount remains safeguarded, and neither party can unilaterally claim it. Only through a judicial order or a signed cancellation letter, indicating an amicable agreement to terminate the contract, can the deposit be released back to the Buyer.
Compensation for Default
When either the Buyer or Seller defaults on their contractual obligations, compensation is invariably set at the deposit amount. If the Seller fails to sell the property, the Buyer has the right to claim compensation equal to the deposit amount unless mutually agreed upon alternative terms. Similarly, if the Buyer fails to complete the purchase before the contract deadline, the Seller can claim compensation equal to the deposit amount for the violation of contractual terms.
Compensation Distribution
Market practices dictate that in cases of default, 80% of the compensation amount goes to the non-defaulting party (Buyer or Seller), while the remaining 20% is designated as professional fees for the broker involved in the transaction. This balanced distribution model recognizes the efforts of the broker while ensuring substantial compensation for their services.
Dispute Resolution through DLD
Dubai's real estate market further facilitates dispute resolution through the Dubai Land Department (DLD) portal. Both Buyers and Sellers have access to the "raise a dispute" feature, allowing them to present concerns related to the contract upon its expiration. The DLD reviews these disputes and attempts to facilitate an amicable resolution through meetings attended by both parties. If a resolution is not done, then the option to proceed to court remains available
Understanding the details of the Unified Contract F and its dispute resolution mechanisms is crucial for both buyers and sellers in Dubai's secondary real estate market. Navigating these processes diligently fosters trust and transparency, ensuring seamless property transactions while safeguarding rights. Importantly, appointing a real estate lawyer to represent you in court adds an extra layer of expertise, assuring a robust approach to protect your interests in this dynamic market.
For further information or to address any inquiries related to our conveyancing services, please reach out to our Sales Progression Officers/Conveyancers team at 00971588229107 or 00971521289592, or email us at [email protected] or [email protected]. You can also explore our comprehensive services on our official website: www.famconveyancing.com. We are committed to keeping you informed and empowered in navigating Dubai's real estate landscape.