Off-Plan Property Risks in Dubai: What Buyers Should Check

Table of contents

• The seven off-plan property risks, and how to reduce each one
• What is an escrow account in Dubai real estate?
• How does RERA protect off-plan buyers?
• Delayed handover: what the SPA says, what the law says, what you can do
• The 10-point due-diligence checklist

There are seven off-plan property risks in Dubai: handover delay, specification changes, market movement, developer default, oversupply, service-charge surprises and exit restrictions. Dubai's escrow, provisional-registration and project-regulation framework reduces some developer and project risks, but it does not remove market, pricing, liquidity, financing or handover risk. Dubai's off-plan regulatory framework has developed materially across successive market cycles, including escrow, provisional registration and project-monitoring requirements. Buyers should still assess the developer, project status, SPA and payment obligations independently. Most of the risks can be checked before you sign anything.

Below are the main risks and how to reduce each one.

The seven off-plan property risks, and how to reduce each one

1. Handover delay

Projects can run late for reasons ranging from contractor issues to approval queues. What reduces it: your SPA specifies a completion date and may allow a grace period, the length of which is set by the contract, so read that clause before you sign. Before buying, look at the developer's delivered track record, not its renders, and check the project's registered completion percentage on the Dubai REST app or in the DLD's open project data, which come from inspections rather than marketing. The section on delayed handover below sets out what the law does and does not say.

2. Specification changes

A brochure may promise Italian marble while a clause of the SPA says materials of equivalent quality may be substituted. What reduces it: the SPA's specification annex. If the brochure promise matters to you, whether that is the appliance brand or ceiling height, confirm it appears in the annex, because the annex is the contractual record of the specification.

3. Market movement between booking and handover

You are buying at today's price for a delivery in the future. Markets move both ways. What reduces it: buying on payment-plan math you can hold, not on an assumption of flipping at a profit. If the resale market at handover disappoints, a buyer who chose the unit for the area and the layout still owns something that works.

4. Developer default

The headline fear, and the one Dubai's regulation targets directly; the next section covers the escrow machinery in full. The short version: your instalments do not sit in the developer's operating account, and if a project is formally cancelled by RERA, refunds flow from the project's escrow. What reduces it further: choosing developers whose projects you can inspect, and verifying, not assuming, escrow registration.

5. Area oversupply

Even a well-built apartment underperforms if thousands of similar units hand over around it in the same year. What reduces it: reading delivery pipelines before buying.

6. Service-charge surprises

The AED per square foot you pay annually after handover is set within a RERA-regulated framework, but estimates given at sales stage can drift by the time an owners' association takes over. What reduces it: asking for the projected service charge in writing and comparing it against what comparable buildings in the area charge.

7. Exit restrictions before handover

Reselling an off-plan unit needs an NOC from the developer, and your SPA may also require a set percentage of the price to be paid first. DLD’s FAQ says resale is possible after obtaining the developer’s NOC and states no minimum percentage. Any threshold comes from your SPA or the developer’s policy, so check the figure in your own SPA. If your plan depends on selling before handover, this clause is your plan's fine print. Our exit strategy guide covers the resale mechanics in detail.

What is an escrow account in Dubai real estate?

An escrow account is a bank account, opened per project by law, that your payments go into and the developer cannot freely take money out of. Under Dubai's Law No. 8 of 2007, every off-plan project must have its own escrow account with a DLD-accredited bank acting as escrow agent. Buyer payments must be deposited into that account, not the developer's general funds, and releases to the developer are tied to certified construction progress, verified through the regulator rather than claimed by the builder.

Practically, the rules are designed to stop a developer collecting your instalments and spending them launching the next project. The money is meant to fund your building as your building rises. They also mean that if RERA formally cancels a project, there is a defined route for refunding purchasers from the escrow account, with unresolved cases escalating to a special tribunal established for cancelled projects.

How do I verify a project's escrow account?

• Ask the developer for the escrow account details and escrow agent bank; a registered project has these on paper.
• Check the project's registration and status on the Dubai REST app or the DLD website's project search, which shows completion percentage from official inspections.
• Make every payment to the escrow account named in your SPA, never to any other account, and keep the receipts. A payment made outside escrow sits outside the protection.

How does RERA protect off-plan buyers?

Beyond escrow, the Real Estate Regulatory Agency registers projects and developers before sales can legally begin, monitors construction progress, and holds the authority to cancel projects that stall, triggering the escrow refund process. Off-plan sales themselves are registered in the interim register under Law No. 13 of 2008, which is what your Oqood certificate represents: your claim on the unit, recorded with the government, before the building exists. The registration fee is set by the DLD, so confirm the current amount before you pay. Our RERA guide and Oqood guide cover both systems in depth.

Delayed handover: what the SPA says, what the law says, what you can do

A late handover is mainly a contract question. The completion date, any grace period and any compensation come from your SPA, and Dubai law does not set a fixed grace period or a fixed rate of compensation for late delivery. The law does govern registration, escrow, project cancellation and refunds, and it gives you official ways to check progress and to complain. Compensation is never automatic.

The legal points below come from the texts on the Dubai Legislation Portal, as of October 2026: Law No. 13 of 2008 (the interim register law) and its amendments Law No. 9 of 2009 and Law No. 19 of 2020, Law No. 8 of 2007 (escrow accounts), Executive Council Resolution No. 6 of 2010 (the implementing bylaw) and Decree No. 33 of 2020 (the Special Tribunal). Law No. 19 of 2020 replaced Article 11 of the 2008 law. That article covers buyer default and project cancellation, not late handover. Al Tamimi & Company summarises the change. Later amendments are possible, and none of this is legal advice.

What your SPA should tell you

Find these clauses before you sign, and again when a delay starts:

• The completion date, and whether it is a fixed date or an estimate.
• Any grace or extension period, how long it is and when it starts. The length is a matter of contract, so do not rely on a "typical" figure from anyone.
• Reasons that extend the date, such as force majeure, and whether the developer must notify you in writing.
• What counts as completion. Is it the completion certificate, or a unit ready for handover?
• The remedies for late delivery: a compensation formula (if any), a right to terminate, and how and when a refund would be paid.
• How your instalments are triggered, by dates or by construction milestones.

How to check construction progress

• DLD open project data. The Project tab of the DLD's real estate data page lists, for registered projects, the project status, the completed percentage, the inspection date, the start, end and completion dates, the developer and an escrow account number field. It is the official place to compare what you were told with what is registered.
• How the percentage is set. Under Article 17 of the 2010 bylaw, a project's completion percentage is confirmed by a technical report from a consultant approved by RERA, based on an on-site inspection.
• Ask the developer for the latest progress update in writing and keep it with your SPA.

Your payments during a delay

Your instalments follow your SPA. If they are tied to construction milestones, they fall due as milestones are reached, so a slow project can also slow the payment calls. If they are tied to dates, check whether the contract pauses them during a delay. Do not assume it does.

Do not stop paying on your own initiative. If a buyer breaches the contract, the developer must notify the DLD, and the DLD serves the buyer a written 30-day notice and, where possible, tries to mediate (Law No. 13 of 2008, Article 11(a), as replaced by Law No. 19 of 2020). If the buyer still does not perform, the developer can act only on a DLD document that records the project’s percentage of completion. Above 80% it can keep the contract and claim the balance, ask the DLD to auction the unit, or terminate and keep up to 40% of the unit value. Between 60% and 80% it can terminate and keep up to 40%. Below 60%, once work has started, it can terminate and keep up to 25%. The rest must be refunded, and the buyer can still go to court or arbitration. Our guide to missed off-plan payments covers this in detail. If you believe the developer is in breach, take legal advice first.

The bylaw does give you one lever on payments. Under Article 20, a buyer may ask the competent court to terminate the contract if the developer declines to link payments to the construction milestones proposed by RERA, if it materially deviates from the agreed specifications, or in other circumstances that justify termination under the general legal rules. Delay on its own is not named in the list, and whether a particular delay qualifies depends on the facts and the contract.

Delay is not the same as cancellation

The bylaw also lists reasons that are treated as beyond the developer's control (Article 21), such as the land being expropriated for the public interest, a government entity suspending the project for re-planning, or structures or utility lines being found on the site, plus any other reason RERA determines. A developer may rely on these to explain a delay.

A stalled project is a separate category. Decree No. 33 of 2020 gives the Special Tribunal jurisdiction over unfinished projects, including those RERA refers to it, and over deciding the rights of buyers in them. It can also issue decisions assigning the completion of an unfinished project to another developer.

Compensation clauses

Compensation for late handover is not automatic. If your SPA contains a compensation clause, note how it is calculated, when it starts, whether you must claim in writing, and whether it is paid in cash or credited against your instalments. If your SPA has no such clause, that does not by itself mean you have no remedy, but what you can claim then depends on the law and the facts. That is the moment to take legal advice, ideally before you send anything that could be read as accepting the delay.

Escalation routes, in order

1. Written notice to the developer. Cite the SPA clause, state the delay, ask for a revised completion date in writing, and keep proof of delivery.
2. The Dubai Land Department. The DLD's Real Estate Complaints page offers a complaint against a real estate company and an inquiry service for contractual disputes. Its support line is +971 8004488. Under Article 14 of the bylaw the DLD may also attempt conciliation between a developer and a purchaser, and a settlement it approves becomes binding on both.
3. The Special Tribunal, where the project is cancelled or is an unfinished project within Decree No. 33 of 2020.
4. Courts or arbitration, according to the dispute-resolution clause in your SPA and the nature of your claim. A lawyer can tell you which forum applies and how long a claim may take.

For the wider picture of how handover works once a project completes, see our booking to handover checklist, and our RERA guide for what the regulator does.

The 10-point due-diligence checklist

• 1. Verify the project is RERA-registered on Dubai REST, and note its official completion percentage.
• 2. Get the escrow account number and agent bank in writing before paying anything.
• 3. Read the delivered track record: what has this developer handed over, and how late.
• 4. Read the SPA's completion date, grace period and delay remedies clauses.
• 5. Read the specification annex against the brochure promises that matter to you.
• 6. Confirm the payment plan against your income if handover slips a year.
• 7. Ask the projected service charge in writing and compare it with comparable buildings in the area.
• 8. Check the resale restriction threshold and NOC terms.
• 9. Check the area's delivery pipeline for the handover year.
• 10. Confirm the sales office quotes an Oqood registration process, not a discount for skipping it.