A court ruled that a property developer and real estate company must return nearly BD244,000 to an overseas investor, who bought three properties across Bahrain but never ended up receiving them.
Three cases were heard at the High Civil Court, in which the Saudi businessman requested the annulment of the sales contracts, since the real estate giant failed to fulfil its side of the contract.
Between 2019 and 2022, the investor purchased units in Bahrain Bay, Durrat Al Bahrain and Manama seafront and paid for them in full – BD88,900, BD80,000 and BD75,000 respectively.
The investor raised a lawsuit against the company, represented by lawyer Rashid Al Binali, demanding that he be reimbursed what he had paid for the doomed properties, with interest.
In three different verdicts, judges ordered the property developer to hand the plaintiff a cumulative BD234,900, with an additional BD5,139.5 to cover the plaintiff’s court fees.
Though Mr Al Binali asked for an interest payment of 10 per cent in each case, the court ruled that the developer must pay 2pc interest in two cases and 3pc in one case.
Property sales contracts, repurchase agreements and incentive agreements were all declared null and void by the court as the defendant had ‘failed to satisfy’ any of their obligations as outlined in the contracts.
The court ruled that in the eyes of the law, it is now considered as if the contracts were never made and the two parties’ relationship has been returned to its status prior to signing any agreements.
In April 2019, the investor and company had agreed on the sale of a unit in a business tower located in Bahrain Bay.
On the same day, the buyer signed a two-year lease with a tenant, who was to rent the unit for BD630 per month. After two years, the rent would have been raised to BD1,889.
The investor had paid the required BD88,900 in three instalments but the ownership legal work was ultimately not transferred to him.
“The project was not completed on the projected date and the plaintiff did not receive rental fees,” read the verdict. “He sustained severe financial losses from investing with the defendant.”
Judges ordered the real estate company to pay an interest rate of 2pc per year, starting from the signing in 2019 and until the complete re-funding of the amount.
In 2022, the plaintiff bought a unit at a proposed residential luxury project, but construction was never completed on the high-end island development, which was even to include a private water park for residents.
The court similarly granted the plaintiff’s request to annul a property sales agreement, an incentive agreement entitling him to BD8,800 and a repurchase agreement for the same amount he bought it for – BD80,000.
“The defendant neglected to give the incentive fee or the property to the plaintiff, without justification or a written notice as stipulated in the contract,” judges stated in the ruling.
Mr Al Binali submitted original copies of all contracts, as well as receipts of the funds transferred and an image of the defendant’s CR, which were admitted as proof to the legitimacy of the investor’s claim.
The defendant’s lawyer told judges that the suit should be dismissed and claimed it had no basis, according to court documents. They were ordered to pay a 3pc interest rate until full re-payment.
In 2021, the investor bought a unit in a hotel tower on the shore of Manama for BD75,000, which was managed and rented out by the real estate company for BD562.500 per month. The court heard that the company not only failed to register the unit under the plaintiff’s name but also did not hand him any of the revenues collected from the tenants.
Judges declared that the company ‘violated its responsibility’ towards the man and ordered a 2pc interest rate beginning in November 2024.
zainab@gdnmedia.bh
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