GoldCoast Uae

Understanding Your Legal Rights for Off-Plan Property Delays in the UAE

Purchasing off-plan property in the UAE can be an attractive investment, but risks include potential delays and financial uncertainty. Fortunately, the UAE legal system provides several safeguards to protect buyers’ rights in these scenarios. Here’s what you need to know.

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When buying off-plan property in the UAE, it’s essential to understand the critical clauses within the Sale and Purchase Agreement (SPA). According to Mahmoud Kreidie, a paralegal at BSA, a renowned law firm, these standard clauses are crucial for safeguarding buyers’ interests

  1. Completion and Passing of Risk Clause: This clause specifies the developer’s anticipated completion date and allows an extension, typically ranging from 6 to 12 months, for specific reasons outlined in the agreement. If the property is not completed beyond this extension period, the SPA may be cancelled.
  1. Cancellation Clause: This clause empowers buyers to terminate the agreement if the developer fails to deliver the property by the agreed date. Generally, SPAs permit a 12-month extension beyond the Anticipated Completion Date. If the property remains incomplete after this period, the buyer can cancel the SPA.

Developer's Obligations and Buyer Rights

Developers may request buyers to adhere to the sale terms or retain a portion of the purchase contract’s value. For instance, if a project is more than 80% complete, the developer may retain up to 40% of the purchase price and return the remaining amount within a specified timeframe. In cases where the project is delayed due to reasons beyond the developer’s control, they may deduct up to 30% of the payment and return the rest within 60 days upon resale of the property.


Dubai-Specific Regulations

Dubai has a well-defined legal framework to protect off-plan property buyers, including:- 

Law No. 8 of 2007 (Escrow Accounts): Requires developers to open an escrow account for each project and deposit all buyer payments into this account. Buyers can review the account records to ensure transparency.

Law No. 13 of 2008 (Interim Real Property Register): Mandates the registration of off-plan property sales with the Dubai Land Department (DLD) for added security.

Executive Council Resolution No. 6 of 2010: Obligates developers to hand over properties by the agreed date if buyers have fulfilled their financial obligations. For delays or non-delivery, buyers can seek amicable settlements through the DLD or take legal action.

Legal Recourse for Buyers

If a project is cancelled by a resolution from the Real Estate Regulatory Agency (RERA), the developer must refund all payments made by the buyer. Buyers must perform due diligence before committing to an off-plan property investment. Mahmoud Kreidie advises potential buyers to verify the project’s registration with RERA and confirm the existence and details of the escrow account.

Michael Kortbawi, a partner at BSA, recommends seeking professional legal assistance for drafting, negotiating, and
performing due diligence. Buyers can negotiate compensation clauses in their SPA and may seek contract termination if necessary. If the developer does not agree, buyers can approach the DLD or file a lawsuit under Article 20 for termination. Delays may be considered negligence under Article 22, allowing action under Article 383 of Federal Law No. 5/1985 even without a specified contract period.



When purchasing off-plan property in the UAE, understanding your legal rights and the key clauses in the SPA is crucial. Performing due diligence and seeking professional legal assistance can help protect your investment and ensure your rights are upheld in case of delays or non-delivery.