Property Inspection Rights

Tim Elliott
Welcome to Lawgical, the UAE’s first and only regular legal podcast. My name’s Tim Elliott, and I’m here with the managing partner of the Dubai-based legal firm Yamalova & Plewka. Her name is Ludmila Yamalova, and it’s nice to see you.

Ludmila Yamalova
Good to be here with you, Tim.

Tim Elliott
Lawgical today could be Lawgical Lite. I’m not sure how much detail we’ll get into here. This time, it’s about property inspection rights. Now, if you buy a property in the Emirates, Ludmila, you have the legal right to inspect what you buy before you buy it, don’t you?

Ludmila Yamalova
Yes, absolutely. The reason we wanted to talk about this today is that we recently secured a judgment reconfirming this very principle. We thought it would be beneficial to share this, especially now that the real estate market in Dubai is heating up—or boiling, to be more accurate.

We’re seeing a lot of pressure from developers. They’re asking buyers to pay their next installment, and this often applies to investors who have purchased off-plan properties. These properties are still under construction, and here’s how it typically plays out: an investor pays a down payment and regular installments. Eventually, the final installment becomes due, and the developer notifies the investor that the property is ready for handover.

Here’s where the challenges start. Developers often say, “Pay the final installment first, and then we’ll let you inspect the property.” Alternatively, they might only allow a single inspection or say, “No matter what defects you find, you still need to pay the final installment.” This creates a lot of frustration for investors because they might not have had the opportunity to ensure the property meets the agreed standards or confirm that defects have been fixed.

Tim Elliott
So it seems like there’s a lack of leverage for the investor once they’ve paid the final amount.

Ludmila Yamalova
Exactly. Let’s break it down. There are typically two stages:

1. Access to Inspect – Are investors allowed to inspect the property before making the final payment? Can they bring independent inspectors, or are they limited to viewing the property themselves?
2. Defect Resolution – If defects are found, when is the developer obligated to fix them, and when is the investor obligated to make the final payment?

In many cases, developers say, “Pay first, then inspect,” or they impose restrictions like, “You can only bring one inspector,” or, “You get one inspection, and that’s it.” This leaves investors in a difficult position.

Tim Elliott
I can see why developers might want to limit inspections. It can be time-consuming, and they’re trying to finish construction while accommodating investors. But surely, they have an obligation to deliver what they promised?

Ludmila Yamalova
Yes, they do. And let me clarify: most investors are not inspecting properties to decide where to hang paintings or make cosmetic changes. They’re looking for actual defects—broken tiles, crooked walls, malfunctioning AC systems, faulty drainage, or mismatched tiles. These are objective issues, not aesthetic preferences.

Developers are obligated to deliver the property in the condition they promised. If the investor identifies defects, they have a right to have those defects addressed before making the final payment.

Tim Elliott
What legal principles support the investor’s rights in these cases?

Ludmila Yamalova
Several principles support these rights:

1. Contract Law – Under UAE contract law, agreements must be executed in good faith. If a developer promises a property of a certain standard, they’re obligated to deliver it in that condition.
2. RERA Circular – The Real Estate Regulatory Authority (RERA) in Dubai issued Circular No. 4 of 2021, which expressly grants unit owners the right to benefit from their properties. This includes ensuring the property is habitable and free of defects.
3. Court Precedents – Recent court cases in Dubai have reaffirmed these principles. For example, the courts have ruled that developers cannot enforce clauses that limit inspections or compel investors to pay before addressing defects.

Tim Elliott
Can you share an example from your recent cases?

Ludmila Yamalova
Certainly. We represented a client who purchased several units from a developer. The developer initially refused to allow inspections, and when they finally agreed, they imposed restrictions like limiting the number of people allowed to inspect and prohibiting independent inspectors.

After the inspection, the client identified numerous defects, but the developer either didn’t fix them or only addressed a small fraction. The client refused to make the final payment, and the developer threatened to terminate the contract, claiming the client was in default.

The case went to court, and the court ruled in favor of the client. The court confirmed that the developer is obligated to provide access for inspections, allow independent inspectors, and fix all identified defects before the investor is required to make the final payment. The court terminated the contract due to the developer’s breach and ordered the developer to refund the client’s investment in full.

Tim Elliott
That’s a significant ruling. It seems like common sense, but clearly, it’s an issue that needed judicial intervention.

Ludmila Yamalova
Exactly. While it may seem straightforward, these disputes are common. Developers often rely on contractual clauses they draft themselves, but the courts have consistently ruled that these clauses cannot override the investor’s basic rights.

Tim Elliott
What’s your advice for investors who face these challenges?

Ludmila Yamalova
Know your rights. You have the legal right to inspect your property, bring in professional inspectors, and have defects addressed before making the final payment. If you face resistance, don’t hesitate to assert your rights through legal channels.

Tim Elliott
That’s Lawgical. Property inspections—your right to inspect and snag professionally. Thank you, Ludmila.

Ludmila Yamalova
Thank you, Tim.

Tim Elliott
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