Our News

13 July

Dubai Property Owners Find Developer’s Promises Sent Over Whatsapp Do Not Count For Much

Gulf News Exclusive, July 13th, 2021:

Owner ends up shelling out payment penalties even after being promised favourable terms


The legal status on offers and promises delivered over digital/social media platforms is still being set. Developers and property owners should take note.Image Credit: AFP Dubai: A developer delivering a promise via a WhatsApp message? A few property owners in Dubai are finding that this has come to cost them quite a bit.

It was last year that a developer with a soon-to-be-handed over project at JVC (Jumeirah Village circle) informed property owners that any of them hit by a job loss or salary cut due to the pandemic would be offered lenient terms on their pending payments. A senior official with the developer sent messages to owners over WhatsApp saying any concerns they have will be addressed immediately. One owner had lost her job mid last year and was placed in a tight spot when it came to getting a mortgage on the apartment. The owner duly sounded out representatives from the developer, and one of them wrote back: ‘We will not charge you any penalty for late payment in case of delay [of] mortgage as we discussed.’ This was in August last year. All went off well until the mid-rise building was completed in November. By then, the owner had found a new job and was waiting for six months to pass in the new position before she could apply for a mortgage. But in April, she got a note from the developer – and that’s when all of that goodwill finally evaporated.

Going back on promises

Forget about taking a lenient view on delayed/missed mortgages, the owner was hit with a penalty of nearly Dh60,000 for not paying off the owed mortgages. This was based on 1 per cent of the balance mortgage amount that was owed by the owner plus Dh250 a day. “The penalty came into effect 30 days after the project received a letter of completion,” the owner said. “So, the Dh59,113 was based on calculations from December 16 – this despite clear messages from a senior official saying all factors would be taken into consideration for the delay in mortgage payout. “As if that was not enough, they waited until end April to let me know that I owed them this amount, when they could have issued a note in December itself.”

Go to RERA

This was not the only instance of an owner at the project getting hit with penalties where the developer had in the past specifically informed them these would be taken care of. But here’s the catch – the developer did not offer any of this on a document other than the message on WhatsApp or told verbally. “I went to RERA and showed the authorities all the message trail of the developer giving assurances about delayed mortgage payments,” the owner said. “I was told to either take the legal route, which would be expensive, or arrive at some sort of settlement with the developer. And that taking a legal option could be expensive and long drawn out.” In the end, the owner got a 25 per cent discount on the Dh59,113 penalty – “For a Dh700,000 plus apartment that was bought as an investment, having to pay the additional sums is such a cost to bear,” the owner said. “But this teaches you not to take any word from a developer at face value – unless it’s set in a legally binding document.” No contract shall be deemed invalid only on the ground that it was finalized through an electronic communication platform...

Legal status

So, does the law of the land take cognizance of assurances sent on a digital platform such as WhatsApp? Ibrahim Hanifeh, Senior Associate for Litigation, Abdulla Alawadi & Associates, has no doubt that they do matter. “As lawyers practicing in UAE we affirm the acceptance of WhatsApp messages in the courts of UAE,” he said. “Article (8) of Law Number (2) of 2002 concerning the Electronic Transactions and Commerce (the Law) provided that "where the rules of law require any documentary proof, records or any written information, for whatever reasons, that requirement can be satisfied by obtaining such document, record or information in any electronic form, if the following conditions are met:
  • The record is retained in the original format in which it was sent or received or in a format in which can demonstrate the original message recipient or sender;
  • The information is stored in such a manner that it can be used for further reference.
“Article (13) of the same Law mentions that "for the purpose of any contract, it is allowed to have any express offer, acceptance through electronic means either partially or wholly. Further, no contract shall be deemed invalid only on the ground that it was finalized through an electronic communication platform." The legal status on WhatsApp messages is clear enough. Developers may soon come to realise this.