What are the Legal Options available to Off-Plan Property Buyers Due to Recent Geopolitical Events according to UAE Law?
The question of whether a buyer can cancel an off-plan property purchase due to recent geopolitical developments is increasingly being asked. While it may be tempting to rely on force majeure as a basis for termination, the legal position is not that straightforward.
Force majeure can only be invoked to the extent that an unforeseen event genuinely prevents a party from performing its contractual obligations. There is no automatic presumption that current geopolitical circumstances qualify as force majeure. In fact, real estate transactions and property transfers in the UAE have, in most instances, continued without interruption. This makes it more difficult to argue that performance has been rendered impossible rather than merely inconvenient or financially challenging.
The position also varies depending on the stage of the transaction:
In some cases, buyers may have only signed an Expression of Interest (EOI). Typically, an EOI is non-binding in nature but often includes a non-refundable deposit. While it does not create strict contractual obligations to complete the purchase, recovering any amount paid under an EOI can be difficult depending on its terms.
A second scenario involves reservation agreements or booking forms, which precede the Sale and Purchase Agreement (SPA). These documents may contain binding elements, particularly in relation to deposits and payment obligations. The ability to cancel at this stage depends entirely on the specific terms agreed upon, and a detailed legal review is required on a case-by-case basis.
The most legally significant stage is the SPA. This is a binding contract, and it generally cannot be terminated unilaterally by the buyer. Termination typically requires either mutual agreement between the parties or a court order. While force majeure arguments may still be raised in disputes arising under the SPA, the burden of proof lies on the party invoking it. They must clearly demonstrate that the event directly prevented or materially delayed performance of their obligations.
There is currently a noticeable trend of buyers seeking to renegotiate their positions. Many are requesting postponements or restructuring of payment plans. Others are exploring termination and refund options. Developers have responded in varying ways, some have shown flexibility and a willingness to accommodate revised terms, while others have taken a stricter approach and are less open to negotiation which prompts the exploration of the judicial root of the dispute
Conclusion
In such situations, obtaining the right legal advice becomes essential so as not to place yourself in breach of your legal obligations.
At Charter Legal, we provide best legal services to clients in reviewing their contractual documents, including force majeure provisions, to assess whether the current circumstances may justify suspension or termination of obligations. we also assist clients negotiating payment arrangements, leveraging the long and extensive experience of our property’s lawyers.
Some of our best lawyer also advise on practical strategies, whether through negotiation with developers, restructuring payment plans, addressing Dubai Land Département or pursuing formal remedies where required. With strong experience in real estate, commercial, and dispute resolution matters in the UAE, we support clients in navigating these uncertainties while ensuring compliance with the applicable legal framework.