Investing in off-plan properties in Dubai is a highly attractive opportunity, particularly because of the chance to buy at the lowest prices and benefit from favorable payment plans. However, buyers have to follow to specific legal procedures and verify particular criteria before purchasing an off-plan property, as outlined in Dubai Law No. 13/2008 on the Interim Real Estate Register in the Emirate of Dubai

Verify Ownership Eligibility- Foreign buyers purchasing off-plan properties must be located in a freehold area, which is a specific area where non-UAE nationals are legally permitted to hold the property. The Dubai Land Department (DLD) provides a complete list of these areas.

Registration with the Interim Real Estate Register- As per the Dubai Law No. 13/2008 on the Interim Real Estate Register, all off-plan property sales in Dubai must be registered in the interim real estate register which is maintained by the DLD. It is the developer’s responsibility to register the sale within 60 days of the transaction. If the registration is not completed, the sale may be deemed invalid, leading to potential legal disputes.

Legal Due Diligence on the Developer- Buyers should perform due diligence by checking the developer’s credentials with the Real Estate Regulatory Agency (RERA). The following are the responsibilities of all developers under the Dubai law No. 13/2008, on Interim Real Estate Register: 

The developer should obtain all necessary land ownership and approvals from the relevant authorities. As stipulated by Dubai law, the developer is obligated to establish an escrow account for the off-plan project. Additionally, the developer is responsible for obtaining all of the necessary permits in order to proceed with the development of the project.

Property Registration Application- Buyers are required to adhere to specific procedures when registering an off-plan property unit, as outlined by the DLD. It is important to submit every necessary document, including personal details and any applicable financial agreements in order to ensure that the property transaction is officially recorded. 

Furthermore, under Dubai law No. 13/2008, developers are prohibited from imposing additional fees for the sale or resale of off-plan properties unless the DLD has granted its official approval. Additionally, buyers should ensure that any administrative expenses associated with the property transaction are transparent and authorized by DLD.

It is necessary for the buyer to review and verify the validity of the sale and purchase agreement. In order to ensure its validity, the sale contract must satisfy all legal requirements, including authorisation from appropriate authorities. Unregistered or unapproved sale agreements may be deemed invalid, leaving buyers without any legal remedies under the applicable laws.

Upon completion of the project, developers are required to register the completed unit in the property register. However, the buyer’s ownership of the unit will be legally recognized only once all contractual obligations are met and the final registration is complete.

Developer’s Rights in the Event of Contractual Violation

In the event of a buyer’s nonpayment under an off-plan sale agreement, the developer has the right to notify the DLD and request that the legal procedures be followed.  Developers may follow the procedures outlined in Article 11 of the same law, which provides buyers 30 days to raise any issues before initiating legal action. Depending on the project’s percentage of completion, developers can:

The developer may request the relevant authority to conduct the public auctions. Terminate the purchase and sale agreement along with all applicable deductions.

Buyers are also entitled to a complete refund in the event that the project is cancelled or never begins.

Buyers should confirm the unit’s area before finalizing the purchase. If there is an increase in the area upon delivery, developers cannot demand additional payments. However, if the unit is smaller than agreed upon, the buyer may be entitled to compensation.

If a developer or broker violates the law, authorities will investigate and take necessary action. RERA is authorised to prepare a report on violations and escalate the matter to relevant authorities for further investigation and enforcement.

Off-plan property investments in Dubai give many financial advantages, but developers and buyers must adhere to the rules and regulations. To safeguard their investment, buyers need to verify the developer’s credentials, the property’s registration, and the validity of the contract.