How to Judge a Dubai Developer Before Buying Off-Plan

A developer must be recorded in the DLD's developer register and licensed before it can carry out real estate development. The project must be approved before units are sold. Under Law No. 8 of 2007, a developer applying for an escrow account must provide, among other documents, a title deed for the land to be developed.

Article 10 of Law No. 13 of 2008 bars developers and brokers from selling off-plan units in projects that the competent authorities have not yet approved, and any contract signed before that approval is void. If the project you are offered does not appear on Project Status or Mashrooi, ask why before you sign anything or pay a deposit.

Check the advertising too. Developers need a RERA permit to advertise a real estate project. Since 24 April 2023, permitted adverts have been required to carry a Madmoun QR code issued through the Trakheesi system. Scanning it confirms that RERA approved the advert and shows details including the advertising company. You can check a RERA-issued practitioner card with the Validate E-Card service in the Dubai REST app.

Every off-plan project must have its own escrow account, managed by a bank or financial institution accredited by the DLD, and your payments should go only into that account. Mashrooi shows the project's escrow account details, so compare them with the payment instructions you receive before you transfer money.

Law No. 8 of 2007 and the DLD's guidance set out how the money is protected:

• The account is dedicated exclusively to building that project. No attachment may be imposed on the payments in it, so the developer's creditors cannot seize them.
• Each project must have a separate escrow account.
• Withdrawals pay contractors, consultants and marketing. The DLD caps marketing at 5% of total sales.
• After the completion certificate is issued, 5% of the account is held back. It is released to the developer one year after the units are registered in buyers' names, as a guarantee against defects.

A request to pay into a personal account, a sales company's own account or any account that does not match the DLD record is a serious warning sign. For more detail, see our guide to escrow and RERA protection.

A developer's past delivery is the best guide to how it will handle your project. Search each of its earlier projects in Mashrooi. The app shows each project's status, its completion percentage and its inspection details.

As you go through the record, ask:

• How many projects has the developer finished, and how many are still under way?
• For finished projects, how long did they take from launch to completion? Ask the developer if the records do not show it.
• For projects under way, does the completion percentage match the time since launch, and has it moved between inspections?
• Are any earlier projects stalled or cancelled?

Then visit one or two completed buildings. Look at the build quality and maintenance, and check their approved service charges on the DLD Service Charge Index. A developer whose finished buildings are well run is easier to trust with a new one. You can browse developers' current launches on our hubs for Emaar, Nakheel, DAMAC, Sobha, Ellington, Binghatti, Azizi and Danube, or see all developers.

The Sale and Purchase Agreement (SPA) sets out your rights, so read it in full before you pay anything beyond a refundable reservation, ideally with an independent lawyer. Check the points below.

• Registration. Off-plan sales must be entered in the DLD's Interim Property Register (Oqood). Under Law No. 13 of 2008, a sale that is not registered is void. See our Oqood guide.
• Parties and project details. The developer's name, project name and plot should match the DLD record.
• Payment schedule. Note whether instalments are tied to dates or to construction stages. The DLD says buyers who receive a payment request have the right to know the current completion percentage, and are not obliged to pay otherwise.
• Completion date and delays. Look for the expected completion date, any grace period and what you are entitled to if handover is late.
• Specification and size. Check how the contract handles changes to finishes, layout or floor area.
• Default. Article 11 of Law No. 13 of 2008, as amended, sets what happens if a buyer stops paying. It is explained below.
• Resale. The DLD says an off-plan unit can be resold after the developer issues a No Objection Certificate, so check the conditions and fees. See selling before handover.
• Handover. Check the inspection, snagging and defect terms. See our snagging guide.

If a buyer breaches the contract, the developer must notify the DLD. The DLD then gives the buyer 30 days' notice to put things right. After that, the law ties what the developer may keep to how far construction has progressed. Under Article 11 of Law No. 13 of 2008 as replaced by Law No. 9 of 2009:

Law No. 19 of 2020 amended the article again. If construction has not started for reasons beyond the developer's control, or RERA cancels the project, the developer must refund everything the buyer has paid. Before you sign, have a lawyer confirm how the current law applies to your contract.

Stop and ask questions if you see any of the following:

• The project or developer cannot be found on Project Status or Mashrooi.
• You are asked to pay into an account that does not match the escrow details on the DLD record.
• Pressure to pay a large deposit before you have seen the SPA.
• Adverts with no Madmoun QR code or permit number, or an agent who cannot show a valid RERA card.
• Completion percentages on the developer's earlier projects that have barely moved between inspections.
• An SPA that names a different company, plot or project from the DLD record.
• Payment dates far ahead of the likely construction progress, with no option to check the completion percentage first.
• Guaranteed returns or rental promises that are not written into the contract.

If construction stalls, you can track it in Mashrooi. You can also get a completion report from RERA's technical auditor, which the DLD lists at a fee of AED 15,000.

If a project is cancelled, the DLD says the developer must return buyers' payments within 60 days of the cancellation decision, although RERA may extend this period. The DLD's project liquidation section retrieves money from the escrow account for distribution to the people entitled to it, and the DLD gives no fixed timetable for liquidation.

The DLD cannot end a buyer's contract with a developer at the buyer's request. It can try to settle the dispute amicably, but a buyer who wants to terminate must go to the real estate court. This is another reason to do your checks before you sign. Our off-plan buying guide covers the full process.