Buyer Rights in Off-Plan Sales Disputes in Dubai

20 June 2026

When you buy an off-plan unit in Dubai, a buyer harmed by a developer's delay or a stalled project is not left unprotected; the Emirate's real estate system surrounds the buyer with strong safeguards. Your payments are deposited into an independent escrow account that is released only in line with actual construction progress, and the developer may not sell off-plan before registering the project with the Dubai Land Department through the «Oqood» system. If the developer delays or the project stalls, you have clear pathways: a complaint to the Real Estate Regulatory Agency (RERA), recovering your funds from the escrow account upon project cancellation, recourse to the special judicial committee for liquidating stalled projects, and a claim for termination of the contract and compensation under the civil rules. In this article we set out the buyer's rights and the ways to protect them, step by step.

Off-plan sale disputes and real estate developer delays: the buyer's rights in Dubai

What Are the Buyer's Rights in Off-Plan Sale Disputes When the Developer Delays in Dubai?

The Off-Plan Journey: From Registration to Handover

Before understanding your rights, it helps to grasp the regulatory milestones every off-plan project passes through in Dubai; each milestone represents a legal safeguard for the buyer:

Project registered with DLD via «Oqood»

Independent escrow account opened

Buyer's staged payments into the account

Funds released by construction progress

Handover and final title registration

How Does the Real Estate Escrow Account Protect You?

Under the Dubai Real Estate Development Escrow Accounts Law, the developer is obliged to open an independent escrow account for each project, into which all buyers' payments are deposited under the oversight of the Dubai Land Department and the supervision of the Real Estate Regulatory Agency. The developer is permitted to withdraw funds only in stages tied to the actual construction progress achieved on the project. This means your money is linked to the progress of the build, not to the developer's promises, and that it is earmarked for your project alone and may not be transferred to another project.

Three safeguards the escrow account gives the buyer

Independent account

Your funds are isolated in a project-specific account, untouched for anything else.

Staged release

Money reaches the developer only after construction progress is verified.

Official oversight

DLD and RERA supervise the account and the approved bank.

The Buyer's Rights When the Developer Delays or the Project Stalls

The right to a regulatory complaint

Filing a complaint with the Real Estate Regulatory Agency and the Dubai Land Department regarding the delay or breach, to open a regulatory inquiry into the project's status.

The right to a refund

Upon cancellation of the project by a reasoned decision of the Agency, the developer is obliged to refund all amounts received from buyers in line with the escrow account procedures.

The right to terminate the contract

Upon the developer's fundamental breach of handover, the buyer may seek termination of the contract and recover what was paid under the civil rules after a formal notice.

The right to compensation

Claiming compensation for the damages resulting from unjustified delay, based on the rules of contractual liability in the Civil Transactions Law.

Retention Percentages on Termination of the Off-Plan Contract

The law regulated the retention percentages the developer may deduct upon termination of the contract, tying them to the unit's actual construction progress, so as to prevent arbitrary deduction and preserve the balance between the parties. Where the project is cancelled entirely, the funds are refunded in full:

40%

Maximum retention when construction progress reaches 60% or more of the unit

25%

Maximum retention where construction has begun but progress is below 60%

30%

Retention from amounts paid where work did not start for a reason beyond the developer's control

100%

Full refund to the buyer where the project is cancelled by a reasoned decision of the Agency

Any amount exceeding the retention percentage is refunded to the buyer within one year of the termination date, or within sixty days of the unit being resold to another buyer, whichever is earlier. Alternatively, the developer may request the sale of the unit by public auction to recover the remaining amounts due.

The Dispute Resolution Pathway When the Developer Delays

Regulatory complaintNotify RERA and DLD of the delay

›

Escrow accountHalt disbursement and refund on cancellation

›

Judicial committeeLiquidation of stalled and cancelled projects

›

Termination & compensationJudicial claim for termination and compensation

A special judicial committee in Dubai handles the liquidation of cancelled and stalled real estate projects and the adjudication of the related disputes, providing a specialised mechanism to protect buyers and recover their rights. The general rules in the Civil Transactions Law remain a basis for seeking termination of the contract and compensation for damage, where the conditions of contractual liability are met after the developer is served with a formal notice.

The Developer's Liability for Construction Defects After Handover

The buyer's rights do not end at handover; the Jointly Owned Property Law imposes on the developer a time-bound warranty against defects that appear after receipt:

years' warranty against structural defects in the building's structure

year's warranty against defects in mechanical, electrical and sanitary installations

Specialised legal consultationHas your project's developer delayed or stalled?

AWADH ALMHEIRI LAW FIRM AND LEGAL CONSULTATIONS

✓ Reviewing the off-plan sale contract and the project's status with DLD and RERA.

✓ Preparing complaints and recovering funds from the escrow account upon cancellation.

✓ Representing you before the judicial committee and the courts for termination and compensation.

Our real estate team is ready to protect your investment step by step.Contact us

Practical Tips for the Buyer Before and During a Dispute

Verify the project's registration

Before buying, confirm the project is registered via «Oqood» and that an approved escrow account exists for it.

Document every payment

Keep payment receipts, escrow account statements, the contract, the payment schedule and the agreed handover date.

Monitor the construction progress

Track the project's progress through the Department's official channels, as it is key to determining your rights on termination.

Serve a formal notice early

When delay appears, consult a lawyer early to serve the developer with a formal notice and choose the most suitable route before the damage worsens.

Legal References

• Law No. 13 of 2008 concerning the Regulation of the Interim Real Estate Register in the Emirate of Dubai, as amended (Law No. 9 of 2009, Law No. 19 of 2017, and Law No. 19 of 2020).

• Executive Council Resolution No. 6 of 2010 (Implementing Regulation of Law No. 13 of 2008).

• Law No. 8 of 2007 concerning Real Estate Development Escrow Accounts in the Emirate of Dubai, as amended.

• Law No. 7 of 2006 concerning Real Estate Registration in the Emirate of Dubai.

• Law No. 6 of 2019 concerning the Ownership of Jointly Owned Real Property in the Emirate of Dubai.

• Decree No. 33 of 2020 concerning the Special Judicial Committee for the Liquidation of Cancelled and Stalled Real Estate Projects in the Emirate of Dubai.

• The Federal Civil Transactions Law concerning contractual liability, formal notice, termination of contract and compensation.

Do Not Leave Your Real Estate Investment Unprotected

The team at AWADH ALMHEIRI LAW FIRM AND LEGAL CONSULTATIONS reviews the off-plan sale contract, follows up the project's status, prepares complaints and recovers funds, and represents you before the judicial committee and the competent courts until your right is recovered in full.

Specialised legal consultation in off-plan real estate disputes in Dubai

Frequently Asked Questions

What do I do if the developer delays handing over the unit on time?+

Begin by serving the developer with a written formal notice, then file a complaint with the Real Estate Regulatory Agency and the Dubai Land Department to clarify the project's status. Depending on the situation, it may lead to recovering your funds from the escrow account upon cancellation, or seeking termination of the contract and compensation before the competent body.

Will I recover all my money if the project is cancelled?+

Upon cancellation of the project by a reasoned decision of the Real Estate Regulatory Agency, the developer is obliged to refund all amounts received from buyers in line with the procedures and provisions of the real estate development escrow account, and the special judicial committee handles the liquidation of cancelled and stalled projects.

What does the real estate escrow account guarantee me as a buyer?+

The escrow account ensures your payments are deposited into an independent, project-specific account under the oversight of the Department and RERA, and funds are released to the developer only in stages tied to actual construction progress, so they may not be transferred to another project or disbursed without verification of the build's progress.

What percentage may the developer retain on termination of the contract?+

The retention percentage is tied to the construction progress: up to 40% of the unit value if progress reaches 60% or more, up to 25% if progress is below 60%, and up to 30% of the amounts paid where work did not start for a reason beyond the developer's control. Any amount exceeding that is refunded to the buyer within the prescribed time limits.

May the developer sell off-plan before registering the project?+

No. The developer may not begin executing the project or selling its units off-plan before receiving the land, obtaining the necessary approvals, and registering the project with the Department through the «Oqood» system. Selling before registration and the Department's approval is contrary to the law.

Which body do I turn to in disputes over stalled projects?+

A special judicial committee in Dubai has jurisdiction over the liquidation of cancelled and stalled real estate projects and the adjudication of the related disputes. The general rules in the Civil Transactions Law remain a basis for claiming termination of the contract and compensation for the damages resulting from the delay.

Does the developer warrant construction defects after handover?+

Yes. Under the Jointly Owned Property Law, the developer warrants structural defects in the building's structure for ten years, and defects in mechanical, electrical and sanitary installations for one year from the date of the project's completion, preserving the buyer's right after receipt.

If your project's developer has delayed, stalled, or the project has been cancelled, do not delay in protecting your investment; contact AWADH ALMHEIRI LAW FIRM AND LEGAL CONSULTATIONS to assess your legal position and take the most appropriate route to recover your right.Contact us

Legal Disclaimer

The information contained in this article is general and educational in nature; it does not constitute legal advice and is no substitute for consulting a specialised lawyer to examine the facts of each case individually. The rules differ according to the terms of the sale contract, the construction progress, the project's status, and the legislation in force at the time of the incident. We recommend contacting AWADH ALMHEIRI LAW FIRM AND LEGAL CONSULTATIONS for advice suited to your situation.

Note: This is a translation of the original Arabic article. In the event of any discrepancy between the two versions, the Arabic text is the authoritative reference.

Our services in Dubai

AWADH ALMHEIRI LAW FIRM AND LEGAL CONSULTATIONS provides its services in off-plan sale disputes and developer delays across the Emirate of Dubai, including reviewing contracts, following up projects' status with DLD and RERA, preparing complaints and recovering funds from the escrow account, and advocacy before the special judicial committee and the Dubai courts to protect buyers' rights.

Our services across the other Emirates

Our real estate expertise extends to clients in Abu Dhabi, Sharjah, Ajman, Umm Al Quwain, Ras Al Khaimah and Fujairah, where we provide advice on real estate development contracts and disputes over handover and project stalling before the competent authorities in each Emirate, to ensure the client's rights are protected wherever their investment is in the State.