# 9 Biggest Mistakes Property Owners Do When Signing Real-Estate Sales and Purchase Agreements


The most typical contract used in business transactions including those involving the purchase of goods, securities, enterprises, and real estate is known as a sales and purchase agreement (SPA). A well-written SPA is essential for every successful transaction, yet frequently purchasers or sellers neglect to take even the most fundamental precautions to safeguard their own interests. By taking advice from [well-qualified real estate lawyers](https://fotislaw.com/lawyers-in-abu-dhabi.php) the property owners can simply avoid these mistakes. There are many faults that owners make without legal counsel, but we'll focus on the ones that are most evident and easy for regular people to understand. They are as follows:

## The absence of check payments and trustee account information
The trustee's account for the project must be clearly identified as such in the agreement. However, you must confirm the account number with the land department and ensure that payments are made by transfer to the same account and not by check, which could be deposited to the same or a different company account.

## The payment terms are not dependent on how the building is coming forward
The majority of the buyers have the payment deadlines stated in many of the agreements that I have examined and verified through litigation or arbitration, but they are not required to complete the building construction in the same proportion. Even while the law mandates that the developer must create his agreement in accordance with the state of the construction, this does not mean that absent demonstrable negligence, the court will advise the buyer that he has the right to withhold payment if progress does not meet expectations.

## The contract's grace period is more than a year
According to standard procedure in the real estate market in Dubai, the contractor will provide the developer a 12-month grace period if there are any unavoidable delays in the construction process. Developers frequently include this language in their contracts. In certain instances, I've discovered that the developer has configured the grace period to be more than 12 months, and in other instances, I've discovered that the grace period is 36 months. When granting a very long period of time that does not conform to customary procedures, the buyer must always exercise caution.

## The Uncertain Meaning of Delivery and Completion Dates
To understand the actual completion date and delivery date from a legal standpoint and be able to advise the client if the Developer has broken the contract, I have to write and connect the definition of the Completion date, Delivery Date, and other related definitions in many of the agreements that I have seen. A crucial factor in determining the beginning date of the breach of contract and whether or not it constitutes gross negligence is how vaguely the terms "Completion date" and "delivery date" are defined. Even if it is determined to constitute gross negligence after analysis, there is no assurance that the Judicial Expert will reach the same conclusion as me or the Client.

## The Land Department is not the indicator of completion status
The Dubai Land Department tracks the development of any Property, and the report is accessible via their website or mobile application (see https://dubailand.gov.ae/en/#/). but in many instances, we discovered that the developer is granting the project consultant this authority. It is required that all the developers shall set that the building progress shall be limited to the construction progress after the down payment that shall not exceed 30%. This delegation's issue is that the project consultant favours the developer who is paying him and could increase the progress by up to 5% above the Dubai Land Department before another payment (for instance, the consultant may estimate that the progress is 60% while the project manager may estimate that it is 65%, and you must pay the payment due on the progress and you cannot challenge the opinion of the project consultant as it is an estimation that is not too far off from the land department estimation).

## The arguments needed for any postponement of the deadline
The developer tends to add clauses of force majeure, which is acceptable, but some of them add the "Delays because of foreign events," and the developer will name everything there such as machinery accidents, the changing of the contractors, and the accident on the site, all without setting a period limit or time limit or even a scale for this event such as the time from the event to the delivery date. All of these foreign occurrences do not need to be disclosed to the buyer at the time they occur, thus in the event of a dispute, you are unsure of the developer's potential arguments under this clause.

## The price of an arbitration case in relation to the value of the property
When buying a property for between AED 0.4 and AED 0.8 million, small investors frequently make this mistake because the parties agreed that any disputes must be resolved through arbitration before a panel of three arbitrators. In a handful of the cases I handled, the arbitration provision required that it take place in the DIFC and be administered by an arbitral panel made up of three arbitrators. This meant that the cost of the arbitration would be AED 200,000 for arbitration and might reach AED 400,000 in the DIFC. Due to their unwillingness to pay these fees, some of my previous clients—even those who have already received their units—did not pursue their cases. This is because there is always a chance that they will lose the case, and the harm would be insignificant in comparison to the litigation costs, which would not exceed AED 100,000 for a small unit in court.

## The finishing or furniture specification's ambiguous and insufficient specifications
There are numerous disputes that arise when the finishing does not meet expectations or agreements from the perspective of some of the clients, but the judicial expert will always look to the definition of the specifications on the agreement; if it does not, then it is all up to the expert, and typically the absence of terms like "luxury" or "high-end" is the main factor in leaving everything in the developer's hands.

## Limit remuneration to extremely low interest and waive termination rights
In some instances, we discovered that the parties had agreed to a modest amount of compensation for the delays to cure the breach, which at the end of the project would not likely exceed AED 5 to 10 K. However, in order to receive this compensation, you must file a lawsuit, and the costs of attorneys will be greater than this sum. This is not the only issue. The issue with some contracts is that the parties expressly agree that the buyer's only recourse will be this compensation and that he will not be permitted to seek more compensation or terminate the contract. The court will uphold this agreement if the parties have agreed upon a compensation amount.