The off-plan buying process in the UAE

Before you reserve: what a legitimate project has already had to do

The most useful piece of due diligence happens before you look at a floorplan, and it costs nothing: establish that the project is registered and that an escrow account exists. Both emirates put a substantial gate in front of a developer before a unit may be marketed, and a project that cannot evidence passing it is not a project.

In Dubai, the Land Department’s project registration service exists to “enable real estate development companies to register a real estate project and open an escrow account for off-plan sales”. To pass it, the land must be in a freehold or long-term lease area and the developer must hold an ownership deed — DLD states plainly that “preliminary sales certificates are not accepted”. On top sits a 30% test, satisfied by completing 30% of construction, posting a bank guarantee for 30% of construction cost, or depositing the cash equivalent. The registration fee is AED 150,000. Separately, Law No. 13 of 2008 forbids a developer from commencing a project or selling off-plan before taking possession of the land and obtaining the required approvals.

In Abu Dhabi the equivalent chain runs through ADREC: developer registration, land registration, planning approvals and project registration, followed by a Madhmoun licence — ADREC’s own wording is “Receive your Madhmoun license, allowing you to advertise and sell your project off-plan”. Until that licence exists, marketing the project is not permitted, and that includes broker listings and exhibition stands.

What to ask for, in order:

• →The project registration number, and the developer’s standing with the land department.
• →The escrow account name and number — it should be in the project’s name, not the developer’s.
• →In Abu Dhabi, the Madhmoun reference for the project you are being sold.

The reservation form and the booking payment

The first document you sign is almost never the sale and purchase agreement. It is a reservation form — sometimes a booking form, an expression of interest or a unit reservation — and it does three things: names the specific unit, fixes the price and payment schedule, and takes a deposit credited against the price.

It is a contract, and it is where most avoidable problems are created. Before signing, read closely the terms that will be difficult to change afterwards: the exact unit number and floor; the stated area and whether it is measured net or gross; the full payment schedule with the trigger for each instalment; the anticipated completion date and what happens if it slips; the refundability of the deposit and on what conditions; and the deadline by which the SPA must be signed. A form that leaves the payment schedule to be “confirmed in the SPA” is leaving open the term that matters most.

On the size of the booking payment, our own catalogue gives a grounded picture rather than a rumoured one: across the 1,063 under-construction UAE projects with a readable payment plan, the median booking payment is 20% and the average 19%. Plans well below and well above that both exist. Anything far outside the range is not necessarily wrong — it is a question to ask.

Crucially, the deposit should be paid into the project escrow account, not to the developer’s operating account and not to a broker. That is the entire point of the escrow regime, and it applies from the very first payment. If the payment instruction on a reservation form points anywhere else, stop and ask why before transferring anything.

The sale and purchase agreement

The SPA is the operative contract. In Abu Dhabi it is also the registered instrument — ADREC states that “Every off-plan sale is registered with ADREC through a Sale and Purchase Agreement (SPA)” — so its terms and the registered record are the same document. In Dubai the SPA sits behind the interim registration.

Developers issue SPAs on their own templates and negotiating room is usually narrow, which makes reading one a matter of understanding what you are accepting rather than redrafting it. The clauses that carry the most weight in practice:

• →The completion date and the grace period attached to it.
• →The area variance clause — by what percentage the delivered unit may differ from the contracted area before a price adjustment or a right to withdraw arises.
• →The specification and materials schedule, and the developer’s right to substitute equivalents.
• →The handover and notice mechanism — how many days you have to inspect and take possession once notified.
• →The defects liability period, and what it does and does not cover.
• →The default and termination provisions — which in Dubai are overlaid by statute regardless of what the contract says.

Escrow: where your money actually goes

Every instalment on an off-plan purchase should land in a project-specific escrow account supervised by the regulator. Both emirates make this a statutory requirement, not a courtesy.

Dubai’s Law No. 8 of 2007 is the founding instrument. Article 6 requires that “Any Developer who wishes to sell Units off-plan must submit to the Department a request to open an Escrow Account”. Article 7 covers the deposit of payments made by off-plan purchasers and project financiers. Article 9 is the clause that matters if a developer gets into difficulty: “No attachment may be imposed on the payments deposited in this account for the benefit of the creditors of the Developer”. Article 13 requires that where the developer mortgages the project, the lender deposits the loan into the same account.

The money does not simply sit there. DLD describes escrow’s purpose as regulating construction of units sold on the map, “guaranteeing investors’ rights”, with a written agreement between developer and trustee specifying the construction milestones that must be reached before funds are released to contractors and consultants. Escrow banks must be licensed by the Central Bank of the UAE and approved by RERA.

At the end there is a retention. Article 14 requires the escrow agent to retain 5% of the total value of each escrow account once the developer obtains the completion certificate, released to the developer one year from the registration of units in the name of purchasers. In effect, a defects fund with a twelve-month life.

Abu Dhabi runs the same architecture under Law No. 3 of 2015 as amended by Law No. 2 of 2025. ADREC states that “All payments made by buyers of off-plan units or project financiers are deposited into this account” and that “Funds can only be withdrawn in alignment with the project’s construction milestones, as verified by authorized entities”, with the escrow bank releasing funds only on ADREC clearance and 5% of total construction cost withheld in a retention account.

Registration: Oqood in Dubai, DARI in Abu Dhabi, and the 4%

An off-plan sale that is not registered is not, in Dubai, a sale at all. Law No. 13 of 2008 leaves no ambiguity: dispositions of off-plan units are entered in the Interim Property Register, and any sale or other disposition that transfers or restricts ownership is void unless entered there. Registration is the buyer’s protection, not administrative housekeeping.

Dubai. The developer registers the sale through DLD’s Oqood portal, using a service described as allowing “a real estate developer to register units sold off-plan or land plots whose value has not been fully paid at the provisional register”. The published fees are 2% of the sale value from the seller and 2% from the purchaser, plus AED 10 knowledge and AED 10 innovation fees, with an AED 1,000 charge where the developer self-registers. From an individual buyer: a copy of the SPA, a copy of a valid UAE ID, and for non-residents a copy of a valid passport. Stated service time is one business day, and the output is a provisional registration e-certificate.

That 4% is what everyone means by “the DLD fee”. It is legally a 2%/2% split; whether the buyer absorbs the whole amount is commercial practice and a matter of what the SPA says, so establish it in writing before signing rather than at registration. It is also paid once — converting the interim registration into a title deed later attracts no second percentage.

Abu Dhabi. Registration is with ADREC through DARI, at 2% of the unit sale price. DARI’s support documentation puts it plainly: “The amount due will be 2% of the total sale price, and an AED 10,000 will be added in the case of late registration (21 days from the contract’s date).” The developer initiates the filing; the documents are the SPA, a power of attorney where relevant, and a sealed contract where the buyer is a company. That 21-day clock is a reason to chase the registration certificate rather than assume it.

Whichever emirate, the thing to obtain and keep is the registration certificate itself. It is what makes your interest in the unit real, and what you will need in order to assign the unit, mortgage it, or convert it at handover.

Paying the plan — and what the law does if you cannot

After registration the process becomes a schedule: instalments fall due against construction milestones or fixed dates, they are paid into escrow, and the developer draws against verified progress. Two things are worth setting up at this stage — a reliable way to be notified when an instalment falls due, and a monitored address for formal notices, because the consequences of missing one are set by statute rather than by contract.

Dubai’s regime is Article 11 of Law No. 13 of 2008 as superseded by Law No. 19 of 2017. The developer notifies DLD of the non-performance on the prescribed form. DLD must then “serve a thirty (30) days’ notice on the purchaser requiring him to fulfil his contractual obligations towards the Developer” and, where possible, mediate an amicable settlement, which if reached is attached to the SPA as an addendum. If the notice expires with no cure and no settlement, DLD issues an official document confirming the developer’s compliance and the percentage of completion of the unit, calculated in accordance with RERA’s standards.

What the developer may then do depends entirely on that percentage, and it may do it “without recourse to courts or arbitration”:

• →Above 80% complete — keep the agreement alive, retain all amounts paid and claim the balance; or ask DLD to sell the unit by public auction to recover the balance, with the purchaser liable for costs; or terminate and retain up to 40% of the value of the unit stipulated in the agreement.
• →Between 60% and 80% complete — terminate unilaterally and retain up to 40% of the unit value.
• →Below 60% complete, where the developer has taken hold of the site and started construction — terminate unilaterally and retain up to 25% of the unit value.
• →Where the developer has not commenced work for reasons beyond its control — terminate and retain up to 30% of the amounts paid by the purchaser, refunding the excess within 60 days.
• →In the first three cases, any amount above the retention must be refunded “within one (1) year from the termination of the agreement or within sixty (60) days from the date of resale of the unit to another purchaser, whichever occurs earlier”.

Handover, snagging and the title deed

When the building completes, the developer issues a handover notice and you inspect. Snagging is that inspection: a systematic walk-through recording defects and incomplete work against the contracted specification — finishes, joinery, doors and windows, tiling and grouting, sanitaryware and drainage, electrical points and the distribution board, air-conditioning throughput and drainage, water pressure, and the waterproofing of any balcony or terrace. Findings go to the developer as a written snag list, are rectified, and the unit is re-inspected before you sign off.

The reason to do this before signing acceptance is that acceptance is the moment your position changes. Independent snagging inspectors operate in both emirates and are commonly engaged for a few hours’ work; a buyer who cannot attend in person can appoint one. Whether to commission an inspection is a judgement call — the sequence, inspect, list, rectify, then accept, is the part that matters.

After acceptance there is a defects period. ADREC records defects liability starting from 12 months, and Dubai’s escrow retention runs to a similar rhythm from the other direction: 5% of the account held from the completion certificate until a year after units are registered to purchasers. Beyond that sits the UAE’s decennial liability regime, under which a contractor and supervising engineer are liable for ten years from delivery where a building suffers total or partial collapse or a defect threatens its stability or safety, with claims brought within three years of discovery and with clauses purporting to exclude that liability void. The Civil Code was renumbered in 2026, so an older reference to Article 880 and a current one describe the same principle — confirm the operative article with a UAE-qualified lawyer rather than relying on either number. It is a structural-safety regime, not a general warranty, and UAE courts have not treated it as reaching every defect.

The final administrative step in Dubai converts the interim registration into full title. DLD’s service states that it “allows parties who are compliant with their contractual obligations to issue a Certificate of Title / Title deed”, and the fees are small: AED 250 for the title deed, AED 250 for the map of a unit or villa, AED 100 or AED 225 for land plot maps depending on Dubai Municipality jurisdiction, plus AED 10 knowledge and AED 10 innovation fees. Stated service time is 6 business days, through the Oqood portal. There is no second 4%.

The bills that do arrive with the keys are the recurring ones. Service charges begin at handover regardless of where you are in a post-handover payment plan; Dubai’s approved rates can be checked in advance through DLD’s service charge index, which lets an owner inquire about the approved fees for jointly owned property. Utility deposits are set by DEWA in Dubai and ADDC in Abu Dhabi, and district-cooling deposits by the cooling provider — confirm all three directly with the provider, since published amounts change. None of them is large individually. They arrive together.

Questions buyers ask