Missed off-plan payments in Dubai? Here's what your developer can legally do

By the Editorial Team · Monday, October 12, 2026

Dubai property developers must follow a strict legal process involving notification and intervention by the Dubai Land Department before canceling off-plan contracts or withholding payments when buyers miss installments. This framework protects buyers by limiting developers’ rights to terminate agreements or retain funds based on project completion stages, ensuring refunds and dispute resolution options.

Dubai property developers cannot immediately cancel off-plan contracts or retain payments the moment a buyer misses a payment, according to legal experts who emphasize that specific procedures must be followed under Dubai law.

Off-plan property purchases, popular among investors in Dubai for allowing payment over construction milestones, are governed by Article 11 of Law No. 13 of 2008, as amended by Law No. 19 of 2017 on the Interim Real Estate Register. The law outlines clear steps developers must take before terminating contracts or withholding payments due to missed instalments.

Ahmed Al Zarooni, founder of Ahmed Al Zarooni Advocates and Legal Consultants, explained that a buyer’s failure to meet payment obligations does not give developers unlimited rights to cancel agreements or keep funds. Rather, the developer must notify the Dubai Land Department (DLD) with details of the default. The DLD then confirms the breach and issues a notice to the buyer, giving them 30 days to settle the outstanding amounts or negotiate a resolution. Any agreement reached must be formalized via a contract addendum signed by both parties.

If the buyer fails to respond within the 30-day window, the DLD issues a certificate confirming the developer followed due process and states the project's percentage of completion, which determines the developer’s subsequent options.

Developers’ rights and financial deductions vary depending on how much of the unit is completed at the time of default. Where completion exceeds 80%, developers may either pursue outstanding payments while retaining the contract; initiate a public auction to recover costs; or terminate the contract unilaterally, deducting no more than 40% of the unit value. The remainder must be refunded to the buyer within one year of termination or within 60 days of resale, whichever comes first.

For projects completed between 60% and 80%, developers also may terminate and deduct up to 40%, subject to identical refund timelines. When completion is under 60%, the maximum deduction upon unilateral termination falls to 25%. In cases where construction has not started due to factors beyond the developer’s control and without negligence, the developer may terminate and deduct up to 30% of payments received, returning the balance within 60 days.

If a project is officially cancelled by the Real Estate Regulatory Authority (RERA), developers are required to refund all amounts in full, in accordance with Law No. 8 of 2007 on Escrow Accounts for Real Estate Development in Dubai.

Al Zarooni stressed that these legal processes are considered matters of public order, meaning any deviation by developers is legally void. Buyers retain the right to seek judicial or arbitration remedies if developers misuse their powers.

He added that understanding these legal boundaries is essential for buyers to protect their investments, noting that developers do not have unfettered authority to act against payment defaults.

The outlined rules specifically apply to Dubai; regulations in other emirates may differ.

This article was reported by synthesizing coverage from multiple independent news outlets to present a balanced, unbiased account. Read about our editorial standards. Spotted an error? Let us know.