Last Updated on September 24, 2026 by Shitiz Srivastava
Buying off-plan in Dubai means paying a developer for a home that does not exist yet. So the most important question is simple: what happens to your money if the project is delayed, cancelled, or you can no longer keep paying? Dubai has some of the strongest buyer protections of any property market, but they have limits. This guide explains what the law actually gives you, and what it does not.
Your first protection: the Escrow Law
Under Dubai Law No. 8 of 2007 (the Escrow Law), every dirham you pay a developer for an off-plan unit must go into a project escrow account opened with a RERA-approved bank. The developer cannot spend it freely. Money is released only as construction milestones are completed and verified by the Dubai Land Department (DLD).
- Your payments are ring-fenced for building your project, not for the developer’s other business.
- Escrow funds are separate from the developer’s general assets, so they stay protected if the developer runs into financial trouble.
- You can check that your payments went into the project’s escrow account through the DLD’s Dubai REST app or by contacting the DLD. Always pay into the escrow account named in your contract, never a developer’s general account.
Read our full guide to Dubai escrow accounts.
If the project is cancelled by the authorities
Project cancellations are rare in Dubai, but they do happen. When RERA formally cancels a project, buyers are refunded from the project’s escrow account. Cancelled projects are handled by a special judicial committee set up to liquidate cancelled real estate projects and return buyers’ money. Keep every receipt and payment record, because you will need to prove what you paid.
If the contract is terminated because the buyer stops paying
This is a different situation, and it is where most refund disputes come from. Law No. 19 of 2017, which amended Article 11 of Dubai Law No. 13 of 2008, sets how much a developer may keep when it terminates an off-plan contract because the buyer has defaulted. The amount depends on how far construction has progressed:
| Construction progress | What the developer may do |
|---|---|
| 80% or more complete | Keep the contract in force and claim the unpaid balance, or terminate and keep a larger share. Refunds at this stage are unlikely. |
| 60% to 80% complete | Terminate and keep up to 40% of the unit price, refunding the rest of what you paid. |
| Under 60% complete | Terminate and keep up to 25% of the unit price, refunding the rest. |
| Work not started | The developer must return the buyer’s money within 60 days of termination. Whether it may make a limited deduction depends on why work has not started, so confirm your position with RERA. |
Where a refund is due after termination, the developer must pay it within one year of termination, or within 60 days of reselling the unit, whichever comes first. These figures are maximums the developer may keep, not amounts it must keep, so the terms in your Sale and Purchase Agreement (SPA) and any settlement you negotiate matter.
Is the 4% DLD fee refundable?
Treat it as money you will not get back. The 4% DLD fee is a government registration fee, not a payment to the developer, so it does not sit in escrow and is generally not refunded when a buyer walks away or defaults. If a project is formally cancelled, ask the DLD directly whether registration fees will be returned, but do not plan around it. On a AED 2 million unit, that is AED 80,000. Some developers pay part or all of the DLD fee as a promotion, so check your SPA. Use our purchase cost calculator to see your full upfront costs.
Force majeure: why it rarely helps buyers
Many buyers assume that a war, pandemic or other crisis lets them walk away from a contract. It usually does not.
- Force majeure needs real impossibility. Under Article 273 of the UAE Civil Transactions Law, an obligation ends only when performing it becomes impossible, not merely harder or more expensive. UAE courts assessed COVID-19 claims case by case and did not treat the pandemic as automatic grounds to cancel.
- Most SPA clauses favour the developer. Developers often rely on force majeure to excuse construction delays. Read the exact wording of your own clause.
- Hardship may be more useful. Article 249 allows a court to reduce an obligation that has become excessively burdensome because of exceptional, unforeseeable events. It is still decided case by case.
- Notice deadlines are strict. Most SPAs require written notice within a set number of days. Miss it and you may lose the right to rely on the clause.
What to do if you are worried about an off-plan purchase
- Read your SPA. Note the termination, force majeure, delay and notice clauses, and the deadlines they set.
- Check the escrow account. Confirm with the DLD or the Dubai REST app that your payments are held in the project’s escrow account.
- Check the project’s progress. Construction progress decides your refund position, and it is published for registered projects.
- Keep every document. Receipts, payment records, emails and progress notices are your evidence.
- Put any notice in writing, quoting the clause and date.
- Get advice from a UAE-licensed property lawyer before stopping payments. Stopping payments can trigger the default rules above.
- Complain to RERA through the DLD if the developer is unresponsive or acting in bad faith. Contract disputes that cannot be settled go to the Dubai Courts.
Completed property is different
Once you hold a title deed, there is no refund mechanism. A fall in value is market risk, not a legal claim. Market sentiment also moves faster than property values: during the 2026 regional conflict, listed developer shares dropped sharply while completed homes kept earning rent and the DLD kept registering sales. If you own a completed home, your decision to hold or sell should be based on your own finances and timeline. See our guide to property transfer in Dubai if you decide to sell.
Protect your heirs as well
Refund rights protect your money during a purchase. A registered will protects it afterwards. Without one, UAE succession rules decide who inherits your Dubai property, which may not match your wishes. Non-Muslim owners can register a will with the DIFC Wills Service Centre or the Dubai Courts. Read about the civil personal status law for non-Muslims.
Related: Oqood certificate explained
Disclaimer: This article is general information, not legal advice. Refund outcomes depend on the wording of your contract and the facts of your case. Consult a UAE-licensed property lawyer before acting.
