Real estate arbitration and delayed handover issues

When a developer misses the handover date by two, three or five years, buyers and landowners often assume their only option is a long civil suit. In most real estate contracts in Bangladesh, that is not true. Real estate arbitration is usually the first legal route, and often the faster and more private one. I am Matin Sarkaer Mishuk, Advocate, Supreme Court of Bangladesh.

I have worked as arbitral secretary in real estate arbitration, I served as Head of Legal at a Dhaka real estate company, and I now represent buyers, landowners and owners’ associations in delayed handover and developer disputes. This page explains how arbitration works, what you can claim for delay and how I run a case from notice to award.

The short answer: if your allotment letter or JVA has an arbitration clause, or if your dispute falls under the Real Estate Development and Management Act, 2010, arbitration is likely your main route. Start with a proper notice.

Why real estate disputes go to arbitration

Two sources usually send a real estate dispute to arbitration:

• The contract: most allotment letters, sale agreements and JVAs in Dhaka contain an arbitration clause.
• The statute: section 36 of the Real Estate Development and Management Act, 2010 requires disputes between buyers, developers and landowners to be negotiated first, and then referred to arbitration under the Arbitration Act, 2001. The other side must join in forming the tribunal within 30 days of notice. If the tribunal is not formed in that time, a party may go to court under the Act.

The Arbitration Act, 2001 then governs the procedure. Under section 7, where there is a valid arbitration agreement, a court will generally not decide the dispute itself and the parties are sent to arbitration.

Arbitration versus court for delayed handover

What you can claim for delayed handover

Section 15 of the Real Estate Development and Management Act, 2010 is the core provision. If the developer fails to deliver within the contracted time, the buyer is entitled to the refund of all money paid plus compensation, at the rate fixed in the contract or, if the contract is silent, at the statutory fallback rate. The refund and compensation are payable within 6 months, in up to three instalments. Depending on the facts, a buyer may also claim:

• Handover of the flat with compensation for the delay, instead of a refund
• Rent paid for alternative housing during the delay
• Adjustment for any shortfall in flat size under section 9(2)
• Registration of the deed within 3 months of full payment under section 9(1)
• Completion of utilities and handover of documents under sections 13 and 18
• Costs of the arbitration

Landowners under a JVA can claim unpaid monthly rent, penalty for delay under the JVA, handover of their units and, where the developer has abandoned the project, termination with appropriate compensation.

A worked example of a contract delay claim

The figures above are illustrative. Each claim depends on the contract wording, payment history and the facts of the delay.

How I run a real estate arbitration

Step 1: Contract and claim review

I read the allotment letter, agreement or JVA, the arbitration clause and the payment record, and calculate the claim. I also check limitation, because arbitration claims are subject to time limits too.

Step 2: Notice of dispute and invocation

I send a formal notice setting out the breach, the claim and the demand to negotiate, followed by a notice invoking arbitration and nominating our arbitrator where the clause requires it. For disputes under the Act, the 30 day period under section 36 runs from this notice.

Step 3: Constituting the tribunal

If the developer appoints its arbitrator, the tribunal is formed as the clause provides. If it does not cooperate, an application can be made under section 12 of the Arbitration Act, 2001 for appointment, or the court route under section 36 of the 2010 Act opens.

Step 4: Interim protection

Where the developer is selling units, transferring assets or about to hand your flat to someone else, interim measures can be sought from the tribunal or, in suitable cases, from the court.

Step 5: Statement of claim and evidence

I file a clear statement of claim with documents: contract, payment proof, correspondence, photographs and, where needed, an engineer’s report on construction status.

Step 6: Hearings and award

Hearings are usually held in a set number of sittings. After hearing both sides, the tribunal issues a written award.

Step 7: Enforcement or challenge

An award can be enforced like a decree of a civil court under section 44. A party may apply to set it aside only on limited grounds under section 42, within the time the Act allows. I handle both sides of this stage.

Documents needed for arbitration

• Allotment letter, booking form and sale agreement
• JVA or development agreement, for landowners
• Payment receipts and bank statements
• All letters, emails and messages with the developer
• Brochure and project schedule
• Approved building plan, if available
• Photographs and videos of the site with dates
• Rent receipts for alternative housing, if claimed
• Owners’ association resolution, for group claims

Common developer defences and how I answer them

Developers facing a delay claim usually raise the same arguments. Knowing them in advance shapes how I build the case.

• “Force majeure”: the developer blames political unrest, the pandemic or material prices. I test whether the clause actually covers the event, whether the delay period matches the event and whether the developer gave notice at the time.
• “The buyer paid late”: I reconcile the payment schedule with bank records. Minor or accepted delays rarely justify years of project delay.
• “Approval was delayed”: approvals are the developer’s responsibility under most contracts, and selling units before approval is a risk the developer chose.
• “Utilities are not our fault”: section 13 excuses only genuine service provider delay despite proper applications, so I ask for the application records.
• “The landowner is not cooperating”: a dispute between developer and landowner does not reduce the developer’s duty to the buyer.

Costs of real estate arbitration

Arbitration costs include the arbitrators’ fees, venue and administrative costs, and lawyers’ fees. Tribunal fees are often shared between the parties, and the award can order the losing party to bear costs. For group claims, the cost per buyer drops sharply. I give a written estimate at the start, broken down by stage, so you can weigh the cost against the claim.

Before you send a notice

• Collect every payment receipt and match it with your bank statement
• Note the exact handover date in your contract and any extension you signed
• Save all developer messages, including WhatsApp, with dates
• Do not sign any “revised schedule” or waiver without legal advice
• Take dated photographs of the site
• Talk to other buyers in the same project

A buyer who signs a new schedule without a compensation clause may weaken an otherwise strong claim. Get the paper right first.

Group claims by buyers

When a whole project is delayed, buyers acting together have more weight. A group of buyers, or an owners’ association, can share legal costs, present one clear set of facts and negotiate a single settlement covering completion, compensation and handover. I have seen developers move faster when facing a united group than when facing one buyer at a time.

Recent developments: commercial courts

The Commercial Court Ordinance, 2026 sets up specialised commercial courts with jurisdiction over matters that include construction contracts and arbitration under the Arbitration Act, 2001, with mediation and tighter timelines built in. As these courts start operating, court applications connected with real estate arbitration may move faster. I follow these changes closely and advise clients on the right forum for each step.

A typical scenario from practice

A common file: twelve buyers in a Bashundhara project paid between 70 and 90 percent of their flat prices. The handover date passed two years ago. The building is roofed, but finishing work has stopped, and the developer keeps promising “next quarter”.

In such a case, I prepare a combined notice under the allotment letters and section 36, propose negotiation with a fixed completion plan and security, and prepare arbitration if the developer does not respond. In many cases, the developer agrees to a written completion schedule with monthly compensation, backed by restrictions on selling the remaining units. Where it does not, the arbitral award gives the buyers an enforceable right.

Settlement inside arbitration

Arbitration does not mean the parties stop talking. In my experience, many real estate arbitrations end in a recorded settlement once the developer sees a well documented claim and a working tribunal. A settlement can be recorded as an award on agreed terms, which makes it enforceable in the same way as any other award. That gives buyers the speed of a settlement with the security of a legal order.

Why my arbitration experience matters

• Experience as arbitral secretary in real estate arbitration, so I know how tribunals manage these cases
• Former Head of Legal at a real estate company, so I know how developers build their defence
• 8+ years in land and real estate law as Advocate of the Supreme Court of Bangladesh
• Settlement-first, but ready to take the case to award and enforcement

Whether you are a single buyer or a full owners’ association, the aim is the same: your flat, or your money back with fair compensation, without wasting years.

Related services

• Developer-buyer disputes on and after JVA
• Apartment purchase legal check to prevent the next dispute
• Legal vetting, notice and opinion for specific remedies
• NRB property management and dispute resolution for owners abroad

Frequently asked questions

Is arbitration compulsory for flat handover disputes?

If your contract has an arbitration clause, or your dispute falls under section 36 of the Real Estate Development and Management Act, 2010, arbitration is generally the required route after negotiation. Courts usually refer such disputes to arbitration under section 7 of the Arbitration Act, 2001.

How long does real estate arbitration take?

Usually several months, depending on how quickly the tribunal is formed and whether the developer cooperates. It is generally much faster than a civil suit.

Can I get a refund instead of the flat?

Yes. Under section 15 of the Act, if the developer fails to deliver on time, you can claim a refund of all money paid with compensation.

What if the developer does not appoint an arbitrator?

You can apply for appointment under section 12 of the Arbitration Act, 2001, and under section 36 of the 2010 Act, if the tribunal is not formed within 30 days, you may go to court.

Is an arbitral award enforceable?

Yes. Under section 44 of the Arbitration Act, 2001, an award is enforced like a civil court decree. It can be set aside only on limited grounds under section 42.

Can several buyers file together?

Yes. Buyers in the same project often act together or through an owners’ association, sharing costs and negotiating one settlement.