Investors sue real estate firm over unfinished homes and refunds
A real estate firm is facing legal action after failing to deliver homes it had promised to buyers under a buyback arrangement.
Investors who had paid in full for residential units are now seeking to have their contracts cancelled and their money refunded, with BD161,675 at stake.
The cases, brought against the company and its owner, argue that the firm breached its agreements by neither completing the properties nor transferring ownership as required.
The claimants, three in total, had signed preliminary sale and purchase agreements with the company.
The first, along with his partners, bought an off-plan unit for BD72,000, fully paid.
On the same day, they also signed a resale agreement, under which the property was to be sold back to the company for the same amount.
Sale contract
Construction was meant to be completed within a year. It wasn't. No final sale contract was signed either. A similar agreement was reached between the company and the second and third claimants, who together paid BD85,000.
Their unit, too, was never finished. The company also failed to make two months' rent payments totalling BD4,675 under a separate lease agreement. With no progress and no sign of their money being returned, the claimants took the matter to court.
The court examined the sale and purchase agreements, noting that they bore signatures attributed to both sides.
The company had raised no objections to the agreements nor challenged the fact that full payment had been made.
No evidence was presented to show any real steps taken towards completing the units or transferring ownership.
Contractual obligations
The court found the company had broken its contractual obligations by failing to hand over the properties despite having received the full purchase price.
In the first case, the court ordered the company to return BD72,000 to the claimant, with legal interest set at 1 per cent per year from the date of the claim until full repayment.
It was also told to cover legal fees and court costs, including BD1,500 for legal representation.
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