Residents are required to pay Dh2.5 million to banks

Dubai: Mohammed Yassin
Dubai Real Estate Court has ruled that an Asian resident is obliged to pay Dh2.5 million to the bank and terminate the lease agreement between them.
According to case documents, a bank in the country filed a lawsuit against a large real estate development company and an Asian resident, seeking to annul a rent-to-own agreement signed in 2008 between the bank, the real estate development company and the Asian resident, the lessor of one of the residential units in the “Dubai Avenue” area, and the lease of the Asian resident. Cancellation of its annexes, deletion of the real estate registration reference in the departmental records, obliging the defendant to return the possession of the housing unit to the bank, hand over the uninhabited property and keep it in the condition it was in when the contract was signed, as well as submitting the release of electricity, water and service charges.
The bank also demanded that the defendant be obliged to pay the plaintiff AED2,507,033, which is the total amount of annual rental arrears that he had not paid. The real estate company was required to fulfill its contractual obligation to register the residential unit in the name of the plaintiff bank in the department’s final register.
The bank purchased the apartment from a major real estate development company in Dubai for Dh2.6 million in 2008 and then sold it to a resident who submitted a request to the bank for real estate financing to purchase the apartment. The bank agreed to finance in the form of a lease, and the defendant eventually took possession of the apartment, and the real estate developer entered into a sales agreement with the bank, pursuant to which the bank became the owner of the apartment.
The lawsuit alleges that the bank, the real estate developer and the person who obtained the financing signed a tripartite agreement addendum, pursuant to which the latter agreed to assign to the bank all rights and obligations relating to the residential unit sales agreement, including amounts prepaid to the developer and deposits. The bank agreed to accept the assignment and assume the obligations arising from the sales agreement.
Then, under the agreement, the property developer agreed to transfer the ownership of the unit to the financing bank and register it in the land department’s initial registry as “lease with title”, and the bank paid all instalments and fulfilled all obligations.
The bank’s legal representative, Dr. Alaa Nasr, said: “The real estate developer breached its obligations by not registering the unit in the bank’s name at the department’s final registry and not issuing a certificate of ownership. The purchaser also breached its contractual obligations set out in the finance lease contract by refusing to pay the agreed rent, prompting the bank to register a dispute expert in 2023, who submitted a report.
He added that it appeared from the case files and documents, including the report of the expert appointed to deal with the dispute, that the first defendant had breached his contractual obligations to the plaintiff bank and had refused to pay the agreed rent on time, despite the warnings he had given and the plaintiff’s performance of his obligations. The documents did not contain any evidence or proof that such payments had been made and therefore the court was satisfied that the first defendant had not undertaken to pay the amounts owed to the plaintiff bank on the due date.
He pointed out that the expert report proved that the bank was entitled to claim Dh2,507,033 from the first defendant, which was the value of the rent it had not paid. The court also required the person to restore the state in which he received the apartment.