What Happens If an Off-Plan Project Is Delayed or Cancelled

If your off-plan project is late, your rights come mainly from your sales and purchase agreement (SPA). If the project is cancelled by RERA, Dubai law steps in: buyers are entitled to a refund of their payments through the escrow system, and a special tribunal handles disputes and liquidation. This guide explains the difference, where to check progress, and what you can do.

Delay vs cancellation: different situations

A delay means the project is still going ahead but will finish later than the date in your contract. Your contract stays in force, your instalments linked to construction milestones fall due as those milestones are reached, and the developer still owes you a finished unit.

A stalled project is one where work has stopped or is moving very slowly. DLD says RERA monitors construction progress and, where a project is stalled or progress is minimal, contacts the developer and gives it time to correct the position. If the developer does not, and there is no justification, RERA can start cancellation.

A cancellation is a formal decision by RERA, based on a reasoned technical report, that the project will not go ahead with that developer. The implementing bylaw of Dubai Law No. 13 of 2008 on the interim real estate register, as amended in 2020 lists the grounds. They include a developer failing to start work without valid justification, escrow law offences, no genuine intention to build, gross negligence and bankruptcy. A developer can file a grievance against the decision within a short deadline.

Some causes count as beyond the developer’s control under the bylaw, such as the land being expropriated or a government entity suspending the project for re-planning.

What your SPA says about delays

Read these clauses before you book, and again if your project runs late:

• Completion date. Is it a fixed date, an estimated date, or a date tied to an event?
• Grace period. Does the SPA allow the developer extra time beyond the completion date before any remedy applies?
• Delay remedy. Does the SPA set compensation, a right to terminate, or nothing?
• Payment schedule. Are instalments tied to construction milestones or to calendar dates? DLD notes that payment schedules are based on completion rates, and that a buyer receiving a payment request is entitled to know the current completion percentage, through a letter from the project consultant.
• Force majeure. What events excuse the developer, and how is the buyer told?

The Dubai laws cited in this guide do not set a general compensation rate for late handover. Whether you can claim compensation depends on your contract and, if disputed, on a court. Our SPA checklist shows what to look for in each clause.

How to track progress

Use DLD's Project Status Enquiry (Mashrooi) on the DLD website and in the Dubai REST app. Search by project name or number and note:

• the project status
• the completion percentage
• the developer and escrow bank
• inspection details

the Dubai REST app also shows payments due on your unit and lets you follow projects you have invested in.

DLD explains that RERA periodically asks developers to update technical data such as the expected completion date and completion rate, so the figure you see reflects the latest technical report. If you need more detail, DLD says a buyer can ask for a report on completion prepared by RERA’s technical auditor, for a fee set by RERA.

When RERA cancels a project: escrow and refunds under the law

The core rule is in Article 11 of the interim register law, as replaced in 2020. If RERA cancels a project, or works never start for reasons beyond the developer, buyers are entitled to a refund of all payments under the escrow law.

The implementing bylaw sets out how this works:

1. RERA issues a technical report stating the reasons, and notifies the developer.
2. RERA appoints a certified auditor, at the developer’s expense, to check the amounts paid by buyers, the amounts in the escrow account and what has been spent.
3. RERA asks the escrow agent (or the developer, for any payments made outside escrow) to refund the amounts to the people entitled to them, within a short deadline set in the bylaw.
4. If the escrow account does not hold enough, the developer must refund the difference within a further deadline, which RERA can extend for valid reasons.
5. If the developer does not pay, RERA must act to protect buyers, including referring the matter to the courts.

Separately, the escrow law requires an escrow agent, where a project is not completed, to take the measures needed, after consulting DLD, to see that the project is completed or buyers are refunded.

The special tribunal for unfinished and cancelled projects

Decree No. 33 of 2020 set up the Special Tribunal for Unfinished and Cancelled Real Property Projects, based at DLD. It has jurisdiction over claims about unfinished projects (where construction started but was suspended) and cancelled projects. Its powers include:

• deciding claims and applications about unfinished and cancelled projects
• assigning an unfinished project referred by RERA to another developer to complete
• liquidating cancelled projects and settling buyers’ rights
• appointing auditors and ordering the escrow agent or developer to refund amounts
• proposing mediation between the parties

Other Dubai courts may not hear claims that fall within the tribunal’s jurisdiction. The decree does not apply to projects within the Dubai International Financial Centre.

Where complaints and disputes go

DLD’s role is narrower than many buyers expect.

• DLD cannot cancel your contract. DLD states that it does not have the authority to terminate a contract between a developer and a buyer at the buyer’s request. Its role is limited to reconciling the parties.
• Contract disputes go to the courts. Claims about compensation, refunds or the contract itself are decided by the courts, not by a complaint.
• Complaints about a licensed company. You can take a complaint about a licensed real estate company to the relevant Dubai authorities.
• If the developer will not register your sale. DLD says a buyer can apply to its Real Estate Registration Assurance section, with supporting documents, if a developer refuses or delays registering the sale contract.

The bylaw also lets a buyer go to court to seek termination where, for example, the developer materially deviates from the agreed specifications, refuses without valid reason to deliver the final sale agreement, or declines to link payments to the construction milestones proposed by RERA.

Practical steps if your project is late

1. Check the official record. Look up the project in DLD’s Project Status Enquiry and save a copy of what it shows, with the date.
2. Reread your SPA. Note the completion date, grace period, delay remedy and payment terms.
3. Ask the developer in writing for the expected completion date, the reason for the delay and the consultant’s completion report behind any payment request.
4. Keep paying what is properly due. Stopping payments can trigger the default process under the interim register law, where the developer may terminate and keep up to 40% of the unit price if the project is 60% or more complete, or up to 25% if works have started but are below 60%. Take advice before withholding anything.
5. Pay only into the escrow account. Never agree to pay instalments anywhere else, even to “speed things up”.
6. Keep records of every payment, letter and email.
7. Take legal advice if the delay is long, the developer stops responding, or you are considering termination. A lawyer can tell you whether the courts or the special tribunal apply.

Our guide to escrow accounts explains how your payments are held, and the risks of buying off-plan covers delivery risk alongside the others. Before your next purchase, our developer due diligence service can help you check a developer’s record, and our off-plan guide covers the full process.