Dubai, UAE– Our Consulting Editor, Advocate Anjana Bhatia D.I is an accomplished Indian Lawyer practicing in India and the UAE. She has over 25 years of experience in Law – Litigation, Corporate, Civil, Criminal, Mediation as well as registered with DIFC Wills and Probate Registry. She provides legal solutions to clients globally with strategic results.
In this interview with EmiratesReporter.com, Advocate Anjana Bhatia D.I. explains the legal rights of off-plan property buyers in Dubai, covering cancellation rules, refund eligibility and developer obligations. She advises buyers to understand the law, verify project details and review agreements carefully before investing.
Here Is What the Expert Says–
E.R- Under Dubai’s Law No. 19 of 2020, what happens when a buyer fails to make payments for an off-plan property, and what steps must the developer follow before cancelling the agreement?
ADV. ANJANA- Under Law No. 19 of 2020, a buyer’s failure to pay instalments may lead to termination of the sale agreement and statutory deductions, depending on the project’s completion status. However, the developer cannot simply cancel the agreement after a missed payment. The developer must notify the Dubai Land Department (DLD), which verifies the breach and serves the buyer with a formal 30-day notice. If the buyer neither fulfils the obligations nor reaches a settlement within that period, the DLD may issue an official document confirming compliance with the procedure and the project’s completion status, enabling the developer to proceed under the applicable legal provisions.
E.R- The law provides for a 30-day notice through the Dubai Land Department (DLD). When does this notice period begin, and what options does a buyer have to resolve the issue within those 30 days?
ADV. ANJANA- The 30-day period begins when the DLD serves its formal notice after verifying the contractual breach, not simply when an instalment is missed. During this period, the buyer should verify the outstanding amount, review payment records, and contact the developer to arrange payment or negotiate a settlement. Where possible, the DLD facilitates an amicable resolution. Any agreed settlement should be documented in writing and signed by both parties. Financial difficulties do not automatically suspend the notice period or oblige the developer to accept revised payment terms.
E.R- How much can a developer legally retain if a buyer defaults on payments? Could you explain how the permitted deductions depend on the project’s construction and completion status?
ADV. ANJANA- Under UAE Law, the permitted retention depends on the project’s officially determined completion status. Where the project is more than 80% complete, the developer may, among other statutory options, terminate the agreement and retain up to 40% of the unit’s contractual value. The same maximum applies where completion is between 60% and 80%. Where construction has commenced in accordance with the approved plans and completion is below 60%, the developer may retain up to 25% of the contractual value upon termination. These percentages are statutory maximums, not automatic deductions, and are calculated on the unit’s contractual value rather than merely the amount paid. Projects where construction has not commenced and projects formally cancelled by RERA are subject to separate provisions.
E.R- If construction on a project has not started, is the buyer always entitled to a full refund? What legal conditions or exceptions should buyers be aware of?
ADV. ANJANA- A full refund is not automatically guaranteed simply because construction has not started. Under UAE Law, all payments must be refunded where work has not commenced for reasons beyond the developer’s control and without the developer’s negligence or omission, or where RERA has cancelled the project through a final, reasoned decision. The applicable escrow-account procedures must also be followed. Buyers should distinguish these circumstances from ordinary project delays and verify the project’s official status with the DLD. If the project has not been formally cancelled and the parties disagree about termination or repayment, legal proceedings may be necessary.
E.R- What happens if a buyer has already paid a substantial amount towards an off-plan property but later faces financial difficulties and can no longer continue with the instalments?
ADV. ANJANA- Financial difficulties do not automatically release a buyer from contractual payment obligations. If the buyer defaults, the developer may initiate the DLD procedure, and the consequences will depend on the project’s completion status and the applicable legal provisions. However, buyers should not assume that all amounts paid will automatically be forfeited. I advise buyers to contact the developer promptly and seek a written arrangement, such as a revised payment schedule or mutually agreed cancellation. The developer is not obliged to accept revised terms, so buyers should review their agreement and obtain legal advice before agreeing to cancellation or deductions.
E.R- Can a developer cancel a sale agreement immediately after a missed payment, or must the developer follow the DLD notification and other prescribed legal procedures? What remedies are available if these procedures are not followed?
ADV. ANJANA- A developer must follow the statutory procedure under Article 11. This includes notifying the DLD, verification of the breach, service of the 30-day notice and issuance of the official document confirming compliance and the project’s completion status. Failure to follow the prescribed procedure may render the relevant legal act null and void. A buyer who believes that the agreement was improperly terminated should preserve the sale agreement, payment receipts, notices and correspondence, and seek legal advice on challenging the termination. The law preserves the right to approach the competent courts or arbitration, as applicable.
E.R- If a developer terminates the agreement, how long does the developer have to refund the amount due to the buyer? What can the buyer do if the refund is delayed or disputed?
ADV. ANJANA- For the statutory termination categories involving projects where construction has commenced, it generally requires the developer to refund the amount due within one year from termination or within 60 days from the resale of the unit to another purchaser, whichever occurs earlier. Different provisions apply to projects that have not commenced construction under the circumstances specified by law or have been formally cancelled by RERA, including applicable escrow procedures. Buyers should identify the specific legal basis for the refund rather than assume one deadline applies to every case. If repayment is delayed or disputed, they should issue a written demand, retain payment records and seek legal advice on recovery through the appropriate court or dispute-resolution mechanism.
E.R- What practical steps should buyers take before signing an off-plan property agreement to protect themselves against cancellation, financial loss and disputes with developers?
ADV. ANJANA- Buyers should verify the developer’s license, the project’s registration and approval, and the required escrow arrangements through official DLD channels. They should carefully review the sale agreement, particularly the payment schedule, handover obligations, default and termination clauses, refund conditions and assignment restrictions. All payments should be made through authorized channels, with receipts and correspondence retained. Buyers should also ensure that they can realistically meet the instalments even if their financial circumstances change. Independent legal review before signing can help identify unfavorable terms and clarify the consequences of default.
E.R- Closing question for the expert: What is the single most important piece of advice you would give someone considering buying an off-plan property in Dubai today?
ADV. ANJANA- My most important advice is to understand the legal and financial consequences before committing your money. Verify the developer and project through official channels, read the agreement carefully and ensure that the payment schedule is realistic for your circumstances. If financial difficulties arise, communicate with the developer promptly and seek a documented solution. Dubai’s legal framework provides protection through prescribed procedures, but refund entitlements and remedies depend on the project’s status and the facts of the case. Proper due diligence before signing is one of the strongest safeguards against avoidable financial loss and disputes.
“The above is a general overview; outcomes differ from case to case and are subject to the discretion of the concerned authorities.”
ADVOCATE ANJANA BHATIA D.I CAN BE CONTACTED AT-
Mobile: +971505944896
Website: www.ajureadvocates.com
Email- anjana@ajureadvocates.com
