Before you buy · Off-plan

What can go wrong when you buy off-plan in Dubai

Between the day you sign and the day you get the keys lie years. This page is about what can go wrong in them: a building that is late, a project that stops, a resale your contract does not allow, a bank that will not lend the second half, an advert that was never real. What the law protects, where it is silent, and what to check before you sign.

Oston Real Estate · Last reviewed 4 October 2026

The short version

Your payments go into an escrow account in the project’s name, which the developer’s creditors cannot touch. It protects what the money is for — building that project — not every dirham until handover.
If the regulator cancels a project, the law says you are refunded, from the escrow account first and then by the developer. A project marked “under cancellation” is not yet cancelled, and nobody is obliged to tell you either way. Check the status yourself.
The Dubai laws on off-plan sales set no handover deadline and no compensation for delay. Your sale and purchase agreement (SPA) does, or it does not. Read that clause first.
If you cannot pay an instalment, the law sets the procedure and caps what the developer may keep: up to 25% or 40% of the price, depending on how far the building is.
Whether you may sell before handover, and after how much paid, is decided by your contract and the developer, not by the law.
UAE banks lend at most 50% on a property under construction, and your own money is used first. The banks we checked lend non-residents 50–60% on homes, and we found none that publishes office loans for non-residents.
Every property advert must carry a permit and a QR code you can scan, and every payment goes to the project’s escrow account — never to a broker.

When the building is late

The Dubai laws that govern off-plan sales set no handover deadline and no compensation for a delay. Both come from your contract.

Article 11 of the interim register law deals with a purchaser who fails to meet his contractual obligations — not with a developer who fails to deliver. Neither the escrow law nor the implementing regulation adds a delay rule. If a delay becomes serious, your route is a court: the regulation lets a purchaser “resort to the competent court to seek termination of his contractual relationship with a Developer”. The Dubai Land Department itself “does not have the authority to terminate any contract”.

So the clause that matters is in your SPA. Read, before you sign:

the anticipated completion date, and the events that let the developer move it
the grace period, in months, before any remedy starts
the compensation: how much, capped at what, paid how (in cash, or as a credit against your final payment)
your right to terminate and be refunded, and from which month
what the contract calls force majeure

A right most buyers do not know they have. Instalments tied to construction progress are due when the stage is reached, not when the developer says so. In the DLD’s words, the buyer may require “a letter (from the project consultant approved by Dubai Land Department), otherwise the investor will not be obligated to pay, unless it is confirmed that the project has reached the stage”. A completion report from the regulator’s technical auditor can also be ordered, for AED 15,000.

Watch progress yourself. The DLD’s Project Status Enquiry shows a project’s completion percentage, on the website, in the Dubai REST app and on WhatsApp. The app also shows “the actual pictures of the project, the escrow account number, payments due on the owners”.

The UAE’s general civil law changed on 1 June 2026, when the new Civil Transactions Law (Federal Decree-Law No. 25 of 2025) took effect. If you are already in a dispute, ask a lawyer which rules apply to your contract.

When a project is cancelled, or stops

A project is cancelled by RERA, the regulator within the Dubai Land Department, by a final, reasoned decision. The developer must then refund all payments. In practice, the order, the deadlines and the amount depend on what is left in the project’s escrow account.

RERA may cancel a project “based on a reasoned technical report” — for example when a developer fails, without valid justification, to start construction, in cases of gross negligence, or on bankruptcy. The developer has seven working days to object; if RERA rejects the objection, its decision is final. The law then says: “the Developer must refund all payments made by the purchasers, in accordance with the procedures and rules stipulated in the above-mentioned Law No. (8) of 2007.”

The implementing regulation sets these deadlines:

Step	Deadline
The escrow bank refunds from the project’s account — or the developer, for anything you paid outside it	no later than 14 days from the cancellation
If the escrow account does not cover it, the developer pays the rest	no later than 60 days from the cancellation decision, unless RERA extends it
If the developer does not pay	RERA takes “all necessary actions to preserve the rights of purchasers, including referring the matter to the competent judicial authorities”

In practice it can take longer. The DLD’s own FAQ describes the process differently: a cancelled project’s escrow account goes to a project liquidation department, which asks the developer to repay buyers within 60 days of the cancellation decision, or longer if RERA sees reason; what is recovered is paid out “either in full or in proportion, depending on the amount available in the account”; and there is no fixed duration — “each project takes its turn in the arrangement”. Disputes about it go to the special tribunal described below.

Three things the brochures leave out:

“Under cancellation” is not cancelled. The DLD’s own wording: “If the project is under cancellation: At this stage, the project has not yet been cancelled”. Until it is, the refund process does not start.

Nobody has to tell you. The regulation requires RERA to notify the developer in writing — not the buyers. In October 2024, buyers in one project found out from the DLD’s Dubai REST app that it had been marked “cancelled”, and later “under cancellation”. Check the status before each payment, not only before the first.

A stalled project may be finished instead of refunded, and a liquidation has costs. In “any emergency situation where the Real Estate Development project is not completed”, the escrow bank must, after consulting the DLD, “take the required measures to preserve the rights of depositors, and ensure that the Real Estate Development project is completed, or depositors are refunded their payments” — the law allows either outcome. Claims about unfinished and cancelled projects go to a special tribunal (Decree No. 33 of 2020, continuing a body set up in 2013). No other court may hear them; the decree says the tribunal’s decisions “will be definitive and not subject to ordinary appeal procedures”; and when the tribunal winds up a cancelled project, it settles buyers’ rights “after deduction of liquidation expenses”.

Where your money goes

Into an escrow account opened in the project’s name with a bank the DLD has approved — not to the developer’s own account, and never to a broker.

The escrow law: “the payments made by off-plan purchasers, or by the financers of the project are deposited in an account opened with the Escrow Agent in the name of the Real Estate Development project.” The money is “dedicated exclusively to the construction of that Real Estate Development project. No attachment may be imposed on the payments deposited in this account for the benefit of the creditors of the Developer.”

A broker “must deposit the sale price … into the project Escrow Account. The Real Property Broker may not deposit the price into his own account”.

Before every transfer, compare the account in your SPA with the escrow account number the Dubai REST app shows for the project, and check the bank against the DLD’s list of approved escrow trustees.

How money leaves the account. The law leaves the terms of withdrawals to the escrow agreement, and the DLD describes how that works: the agreement lists the major construction stages, and when the developer reports one complete, the bank’s engineer inspects the site before the bank pays out. “As a general rule, payments made from an escrow account are only for payments to the contractors, consultants and marketing involved in the project”, and marketing may take no more than 5% of sales. Two things work differently: a developer that gives the bank a guarantee can draw up to its value for construction works until 20% completion, and a developer may withdraw surplus “profits” during construction if, among other conditions, the balance still covers the remaining construction costs. After the completion certificate, 5% of each account is held back and released one year after the units are registered in the buyers’ names. Escrow ties your money to the project and pays it out as the building rises. It does not freeze it until you get the keys.

If you cannot pay an instalment

The procedure is set by law, and the law makes it binding. Its rules are “part of public order, and failure to comply therewith will result in nullity of the legal act in question.” The developer applies to the DLD, the DLD gives you 30 days and tries to mediate, and only then may the developer act — within limits set by how far the building is, as determined by RERA:

Completion	What the developer may do
Above 80%	Keep the contract and claim the balance; or have the unit sold at auction; or terminate and keep up to 40% of the price
60% to 80%	Terminate and keep up to 40% of the price
Below 60%, once work has started on site	Terminate and keep up to 25% of the price
Not started for reasons beyond the developer’s control, or cancelled by a final RERA decision	Refund everything

If the developer terminates, it must refund what it may not keep “within one (1) year from the termination of the agreement or within sixty (60) days from the date of resale of the Real Property Unit to another purchaser, whichever occurs earlier”. And none of this closes your own route: the procedure “will not preclude the purchaser from having recourse to courts or arbitration”.

The procedure is also covered in Proving where your money came from.

Selling before handover

You can resell an off-plan unit only if your contract and the developer allow it, and the sale must be registered with the DLD — otherwise it is void.

The law: “any sale or any other legal disposition that transfers or restricts ownership or any ancillary rights will be void unless entered in that Register.”

Everything else is contract. Whether you may assign your unit, after how much of the price paid, and what the developer charges for its no-objection certificate (NOC) are set by the developer and your SPA. We found no DLD or RERA rule that sets a minimum percentage, the large developers we checked do not publish their current resale policy, and the figures that circulate online contradict each other. Ask for the conditions in writing, before you sign.

The new sale is registered like any other: the DLD’s fee schedule charges 4% of the value of a sale contract.

If your plan is to sell before completion, that plan depends on a clause you can read today. Read it.

The second half of the price

If your plan leaves a large share of the price to completion and you mean to borrow it, know the limits before you sign.

The UAE Central Bank caps what banks may lend against a property’s value:

Property	Maximum loan
Under construction (off-plan)	50%, “regardless of purpose, value, or category of purchaser”
Expatriate, first home, less than AED 5 million	80%
Expatriate, first home, more than AED 5 million	70%
Expatriate, second home or investment	60%

These rules cover residential property. For a property under construction, “the mortgage loan provider must first use owner’s equity portion of the construction price to pay the developer/contractor before the mortgage loan provider provides any of the loan monies.” Your money goes in first.

If you do not live in the UAE, banks set their own limits. Mashreq “finances up to 50%” for non-residents, and HSBC lends non-residents “up to 60%” — but on a property under construction, the 50% cap above applies to everyone.

For an office, we found no UAE bank that publishes mortgages for non-residents. Emirates NBD’s office loan, for example, requires a completed, freehold or transferable property and a minimum monthly salary of AED 30,000.

Since February 2025, banks may no longer add the DLD fee and agency fees to the loan, The National reported. Plan to pay them in cash.

Ask a bank for an approval in principle — for this unit — before you sign.

The costs that are not in the price

Cost	Amount	When
DLD registration fee	4% of the price, plus AED 20. The law splits it equally between seller and buyer unless the contract says otherwise — check who pays it in yours	when the developer registers your purchase, within 90 days of signing
Developer’s registration and administration fees	The DLD charges developers AED 1,000 per sale registered through its portal; any further administration fee is the developer’s own	at signing
Title deed at completion	AED 250, plus AED 250 for the map and AED 20 in other fees	at handover
Electricity and water, for a flat	Security deposit AED 2,000, refunded only when you sell; connection AED 125, plus AED 30 in fees	before you move in or let
Service charges	The budget RERA approves for the building, per sqft and year	from completion or handover, as your contract says — and see below

The service charge in the brochure is an estimate. A management company may not collect “any amounts whatsoever” without RERA’s approval, and RERA may not approve a budget unless a certified audit firm has approved it first; a temporary budget may apply in the meantime. The developer pays the charges on units it has not sold. For finished buildings, the approved charges are public in the DLD’s Service Charge Index.

And it can start before you collect the keys. In October 2025, Dubai’s Rental Disputes Center ruled that a buyer named in the interim register owes service charges “starting from the date of project completion or from the moment of default on payment obligations” — “even if final ownership has not yet been transferred”, where the delay in handover is the buyer’s.

Fake brokers, fake adverts, the wrong account

Three checks take five minutes: the broker, the advert, the account.

The broker. The DLD publishes every licensed broker and brokerage. Search its list by name, office, mobile number, area or the office’s registration number (ORN) on the DLD website; the Dubai REST app also shows brokers with their performance levels, and brokerage offices with their classifications. A broker gets a broker card through the regulator’s Trakheesi system: ask to see it, and check the name against the list.

The advert. Every property advert in Dubai needs a Trakheesi permit from the regulator, and the permit number must be shown. Every advert must also carry a QR code: the DLD introduced it in April 2023, calls the service Madmoun, and now requires it “on all real estate advertisements, whether visual or written”. It lets you “verify the advertisement’s authenticity and validity, ensuring that it has been approved by RERA”. Scan it: it opens the official permit card. The DLD fines AED 50,000 per violation and asks the public “not to engage with any property advertisement not approved by DLD”. The QR code is the quickest check there is.

The account. Pay only into the project’s escrow account, and only after checking it as described above. A broker may not take the price into their own account.

If something looks wrong, report fake payment requests or adverts in the DLD’s name to the DLD, and fraud to Dubai Police through its app or on 901.

The market turns

Nobody can tell you where prices will stand at your handover. Here is what the firms paid to watch the market have said, with dates:

Fitch, May 2025 (as reported by The National): a “moderate correction” from the second half of 2025, running through 2026, “not expected to exceed 15 per cent”; the pace of deliveries “will test the absorption rate of the Dubai residential market in 2026–2027”.
Knight Frank, November 2025: “almost 331,000 homes completed between 2026-2030”, and “a very real risk of supply outpacing demand”.
CBRE, April 2026: “Price and rental growth are moderating, coupled with an anticipated influx of new property deliveries later this year”.
ValuStrat, July 2026: its residential index fell 4% in the quarter, and “Only 20,000 homes were completed in H1 2026, representing just 15% of the preliminary full-year target”.

What that means for you: at handover, your unit may compete with many new units like it for tenants and buyers — so price the rent you will achieve then, not today’s. And delivery targets slip, which is why the delay clause in your contract matters more than the completion date in the brochure. These figures are about homes; offices are a separate market.

Four things you will read elsewhere

“The developer can only withdraw escrow money against certified construction progress.” Mostly true, with exceptions. As a general rule, the escrow bank pays contractors and consultants only after its engineer has checked each construction stage. But a developer that gives the bank a guarantee can draw up to its value for construction works until 20% completion, and surplus profits may be withdrawn during construction under conditions.

“If the project is cancelled, you get everything back.” You are owed everything. What you receive depends on the escrow balance and the developer’s ability to pay; a liquidation deducts its costs first; and a stalled project may be completed rather than refunded.

“RERA gives developers a 12-month grace period.” No law we found says so. If your developer has one, it is in your contract.

“You will be told if your project is in trouble.” The regulation obliges RERA to notify the developer, not you.

Before you sign: twelve checks

The broker’s card and the brokerage on the DLD list.
The advert’s QR code.
The project in Project Status Enquiry: registered, its completion percentage, not “under cancellation”.
The escrow account number in Dubai REST matches the one in your SPA.
The bank that holds it is on the DLD’s list of approved escrow trustees.
The SPA’s delay clause: grace period, compensation, your right to terminate.
For construction-linked instalments: the consultant’s letter you may ask for.
The assignment clause and the developer’s NOC conditions, in writing.
Who pays the 4% DLD fee, and every other fee, in writing.
A bank’s approval in principle for the completion payment, for this unit.
The service charge estimate, and what it covers.
Your provisional registration certificate from the DLD, within 90 days of signing.

Questions and answers

Is my money safe in an escrow account in Dubai?

Payments for an off-plan unit go into an escrow account opened in the project’s name with a DLD-approved bank. The money is dedicated to building that project, and the developer’s creditors cannot seize it. It is not frozen until handover: the bank pays contractors and consultants as construction stages are completed and checked by its engineer, and the DLD’s rules allow other withdrawals, such as surplus profits, under conditions that include the remaining construction costs being covered.

What happens if a developer cancels an off-plan project in Dubai?

A project is cancelled by a final, reasoned decision of RERA, the regulator. The developer must then refund all payments. The implementing regulation sets 14 days for the refund from the escrow account and 60 days for the developer to pay any shortfall, unless RERA extends that period; the DLD’s own FAQ gives no fixed duration for liquidating a cancelled project and says buyers are paid in full or in proportion to what is in the account. Claims about unfinished and cancelled projects go to a special tribunal whose decisions are not subject to ordinary appeal.

What does “under cancellation” mean for a Dubai project?

That the project has not yet been cancelled. Until RERA cancels the project, the refund process does not start. Nobody is obliged to notify buyers, so check the project’s status on the DLD website or in the Dubai REST app.

Do I get compensation if my off-plan property in Dubai is delivered late?

Only if your sale and purchase agreement provides it. The Dubai laws on off-plan sales set no handover deadline and no compensation for delay. If the delay is serious, a buyer can ask a court to terminate the contract.

Can I sell an off-plan property in Dubai before handover?

Only if your contract and the developer allow it. Developers may require a share of the price to be paid first and charge for their no-objection certificate; these are contract terms, not law. The resale must be registered with the DLD, or it is void, and the DLD charges 4% of the new sale value.

Can I get a mortgage on an off-plan property in Dubai?

UAE banks may lend at most 50% of the value of a property under construction, and your own money is paid to the developer first. Banks set their own limits for non-residents — the ones we checked lend 50–60% on homes. We found no bank that publishes office mortgages for non-residents.

How do I check that a Dubai broker or property advert is genuine?

Search the broker or brokerage on the DLD’s list of licensed brokers, on the website or in the Dubai REST app. Scan the advert’s QR code: every property advert in Dubai must carry one, and it opens the official permit. Pay only into the project’s escrow account, never to a broker.

Which fees do I pay on an off-plan purchase besides the price?

The DLD’s 4% registration fee (split equally by law unless your contract says otherwise), the developer’s own administration fees, AED 520 in title deed and related fees at completion, a security deposit for electricity and water, and service charges once the building is complete.

Related guides

Sources

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