Off-plan buyers are often told, once construction reaches a certain stage, that their property is complete. In practice, that message is usually tied to the issuance of a building completion certificate: a document confirming that a physical structure has passed the relevant construction and safety inspections. Under UAE law, that certificate is not the same thing as a hotel being open and operating.
A building completion certificate is issued by the relevant municipal or civil defence authority. It confirms that the structure meets construction code. It does not confirm that a hotel is staffed, licensed to trade, furnished, or accepting guests. Between a building completion certificate being issued and a hotel actually opening for business, a significant period of time can pass, and in some documented cases has passed.
This distinction was confirmed in UAE case law. In a May 2026 ruling involving a TFG Sigma entity, the Court of Cassation held that a building completion certificate does not constitute hotel completion. The court's reasoning treated the certificate as a construction milestone rather than proof that the contracted service, a functioning hotel, had actually been delivered.
The practical consequence for delay compensation is significant. Rather than calculating delay only up to the date a completion certificate is issued, the ruling supports calculating delay compensation through to the date the hotel actually became operational. In the case decided in May 2026, the court awarded AED 180,000 in delay compensation. It also overrode the standard 6% contractual cap on delay compensation found in SPA Clause 7.3 and permitted under Article 390/2 of the UAE Civil Code, on the basis that the cap did not reflect the buyer's actual loss.
For investors in off-plan hotel units, the relevance is direct. If a developer has calculated delay compensation using the completion certificate date rather than the date the hotel actually opened to guests, that calculation may understate what is owed. Investors reviewing a delay compensation figure should ask which date was used as the endpoint, and whether that date reflects a construction milestone or actual hotel operations.
The full record of this verdict, along with other public court outcomes involving Dubai off-plan disputes, is documented on the Court Outcomes page.
This article is published for informational purposes only and does not constitute legal advice. Readers with active disputes should seek independent legal counsel.
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