Force majeure in Dubai real estate: can you withdraw from a deal?
No. According to the lawyer interviewed by Oleg Svyatenko, a property deal in Dubai cannot be cancelled on force majeure grounds today, because the UAE has not officially declared a state of war or emergency. The buyer either completes the purchase or loses the 10% deposit, unless the contract itself says otherwise.
Is the current situation in Dubai force majeure?
No. The lawyer's answer is that officially there is no force majeure in Dubai. For political or military events, force majeure means a state of emergency or a state of war formally declared by the government, and no such status has been declared.
The question put to him was blunt: can a buyer cancel a real estate deal because Iran occasionally launches missiles towards Dubai? His reply was that the country is living under its normal legal regime, not under martial law, so the contract stands.
He also stressed the method. A lawyer first asks what exactly force majeure is being applied to. Here it is a property transaction, and for that transaction nothing has legally changed.
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Why does a flood count without a declaration, while military events do not?
Because the two are regulated differently. A natural disaster is force majeure caused by nature and needs no announcement from the state. A political or military event only becomes force majeure once the government officially declares the corresponding status.
The lawyer called this a particular feature of the legal regulation. A flood that makes performance impossible qualifies on its own facts. Military action near the country does not, until an emergency regime is formally introduced.
He added a practical caveat about weather. Dubai did not have a flood in the legal sense recently: it simply rained for a couple of days, and that is not a natural disaster.
Can a tenant ordered to leave the UAE terminate the lease?
Not as force majeure, unless the lease provides for it. A cancelled visa is not a force majeure event. Only a clause saying the contract ends if the tenant loses the right to reside for reasons beyond his control would give that result directly.
The case came from Oleg's own practice. A Canadian citizen born in Iran rented an apartment from his client and paid a deposit for the first three months. He then received a government text message telling him to leave the UAE within 30 days.
The lawyer's view is that such a lease most likely has no residency clause, so a court would not treat the event as force majeure. How it would be interpreted is another matter, and he said he knows of no case law on it yet.
How might a Dubai court look at such a case?
Dubai courts rely on UAE law, the Civil Code and Sharia, and Sharia allows a norm to be interpreted from the point of view of fairness. That leaves room for a judge to side with the tenant even without force majeure.
In the lawyer's opinion, a judge could reason that the man genuinely had no opportunity to live in the country, that he gave notice of the problem, and that the contract should therefore have been terminated.
The outcome would then be termination of the lease without penalties. He presented this as his professional opinion, not as an established rule, and repeated that the event itself is still not force majeure.
Can a buyer who cannot fly in because of the conflict cancel the purchase?
No. The lawyer treated this as exactly the same situation as the tenant's. An Iranian citizen who signed a purchase contract before the hostilities and now cannot travel is not protected by force majeure.
The bottom line agreed in the conversation is narrow. Only natural disasters and statuses officially declared by the government count. Personal inability to reach the closing, however real, is outside that list.
What COVID changed in force majeure clauses
COVID was force majeure for a certain period, once it was officially recognised. Its bigger legacy is that it showed the parties can write down exactly what they agree to treat as force majeure, instead of copying a standard line.
Before the pandemic, the lawyer said, people simply inserted a generic disclaimer into every contract without spelling anything out. He recalled drafting such a clause on 28 February, not expecting hostilities to begin the very next day.
For new deals a buyer can ask a lawyer to define the triggers. Examples he gave: another missile strike, or a ground operation in a neighbouring country. The clause can even say that an event in Iran counts while one in Kuwait does not.
If the contract keeps the standard wording and says nothing specific, the general legal definitions apply. That is the point he asked buyers and sellers to pay attention to before signing.
Do a car accident or illness count as force majeure?
No. Only what the contract provides for, plus the general list, qualifies. A buyer who misses the closing after a car accident has a ground for extending the deadline, but not a force majeure event that ends the deal.
The lawyer noted that every country's civil code describes force majeure and the lists are roughly the same: natural disasters, a state of emergency, war. Missiles that fly and sometimes fall while no war is declared are not on it.
He drew a legal distinction worth remembering. Force majeure is one thing, and the duty to perform the contract is another. An event may justify postponing performance without releasing the party from it.
How do you recover the 10% deposit if the other party does not show up?
By opening a case and winning it. With no force majeure, the 10% due under the sale agreement is not paid automatically. The lawyer described opening a property case as fairly simple, but said it is only the start of the road.
You take the contract whose terms are not being performed and go to the police. Any smart police station will do, in person or by phone, or the case can be filed through the Dubai Police application. Opening it is a paid service.
From there the case is reviewed by the police and the prosecutor and then goes to court, which is the final stage. As a rule, he said, the parties settle before that point.
A bounced deposit cheque is a separate and more serious matter. Writing a cheque with no money behind it is treated as fraud and a criminal case: the person can receive a travel ban and then a fine, deportation or a prison term.
Why settling out of court usually wins
Because litigation in Dubai is expensive and the winner recovers little. In the lawyer's typical example a party spends AED 30,000 to 40,000 (about USD 8,200 to 10,900) and the court reimburses AED 5,000 (about USD 1,360).
Legal costs are reimbursed only up to a certain amount, never in full. That is why, he said, a party is often right on the merits and still decides that going to court is a loss.
Oleg added that the standard contract generated by the system gives the parties seven days for a pre-trial settlement before a case can be opened. The lawyer confirmed that the authorities ask whether you tried to settle first.
The conclusion both reached: a deal that has been dragging on since before the hostilities must still be closed, or the 10% is lost. And it is better to agree amicably than for each side to lose roughly another AED 50,000 (about USD 13,600) in court.
Frequently asked
Does the regional conflict let a buyer walk away from a Dubai property contract?
No. The lawyer in the video says that without an officially declared state of war or emergency in the UAE there is no force majeure, so the buyer completes the deal or forfeits the 10% deposit.
Was COVID recognised as force majeure in Dubai?
Yes, for a certain period and once it had been officially recognised. It also pushed lawyers to start defining force majeure events in contracts instead of using a generic clause.
What should a force majeure clause in a new contract say?
It should name the specific events the parties agree on, for example a missile strike or a ground operation in a named neighbouring country. A standard clause with no detail leaves only the general legal definitions.
Are legal costs reimbursed if you win a property case in Dubai?
Only partly. The lawyer's typical figure is AED 5,000 reimbursed against AED 30,000 to 40,000 actually spent.
What happens if a deposit cheque bounces in the UAE?
It is treated as fraud and a criminal matter. The person who wrote it can face a travel ban, a fine, deportation or a prison term.
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