What to Check in an Off-Plan Sales and Purchase Agreement

An off-plan sales and purchase agreement (SPA) is the contract between you and the developer. It decides what you are buying, what you pay and when, how late the developer can be, what may change, and what happens if either side does not keep its promises. Before you sign, check the unit and its area, the payment schedule and escrow details, the completion and delay clauses, the specification, the default and resale terms, service charges, handover and the dispute route. The checklist below takes each in turn.

This guide explains what to look for and where Dubai law sets the rules. It is general information, not legal advice.

Why the SPA matters more than the brochure

A brochure, a show unit and a sales presentation tell you what the developer hopes to deliver. The SPA tells you what the developer has agreed to deliver, and what you have agreed to pay. If the two differ, it is the signed contract that sets out your rights.

The SPA is also the document that DLD registers. Under Dubai Law No. 13 of 2008 on the interim real estate register, as amended in 2020, the developer registers the sale in the interim register, and that registration is what gives your purchase legal effect. When a developer opens a project’s escrow account, it must also give DLD a standard sale contract, so the SPA you are offered will usually follow a standard form.

Read the full document, including schedules and annexes, before you sign. If something you were told is not in it, ask for it to be added in writing, or assume it does not apply.

Checklist: parties, unit and plot details, area and tolerance

• Parties. The developer’s legal name should match the name in DLD’s list of licensed developers and in the project’s record on DLD’s project status service. Your name, and any co-buyer’s, should match your passport exactly.
• Project and unit. The project name and number, building, floor, unit number, unit type and any allocated parking space or storage should all be specified.
• Plans. A floor plan of the unit should be attached and referred to in the contract.
• Area. Check which area is stated. The interim register bylaw uses the net area of the unit, as set out in the sale agreement and plan, as the basis for registration and for any later adjustment.
• Tolerance. Under the bylaw, the developer must compensate you if the actual unit is more than 5% smaller than the net area in the contract, and compensation is calculated from the price agreed in your contract. Unless agreed otherwise, the developer may not charge you for extra area. Check whether the SPA’s own tolerance clause is consistent with this.

Price, payment schedule and escrow account details

• Price. The total price, the currency, and whether any amount, such as a parking space, is priced separately.
• Schedule. Each instalment with its amount and trigger: a date, a construction stage, or handover. If an instalment is tied to a construction stage, check how the stage is defined and who certifies it.
• Fees. Who pays DLD’s registration fees, and any administration charges the developer will add.
• Escrow. Under Dubai Law No. 8 of 2007 on escrow accounts, payments for off-plan units go into the project’s escrow account. The SPA should name the account and the bank. Compare them with the escrow account number shown for the project in the Dubai REST app.
• Late payment. Any penalty for paying late, and whether there is a grace period before it applies.

Our guide to off-plan payment plans explains how to compare schedules and what to ask the developer.

Completion date, grace period and delay provisions

This clause deserves your most careful reading. Look for three things.

1. The planned completion date. Is it a fixed date, or “anticipated”? Is it the date of completion of the building, or of handover of your unit?
2. The extension. How long may the developer extend the date, and on what grounds? Is the list of grounds closed, or open-ended?
3. The remedy. What are you entitled to if the extended date passes: compensation, a right to terminate, a refund, or nothing specific?

The implementing bylaw of the interim register law gives a list of reasons it treats as beyond a developer’s control, which matter when a project has not started. They include the land being expropriated for the public interest, a government entity suspending the project for re-planning, structures or utility lines found on the site, and a master developer changing the project site in a way that affects the sub-developer. If your SPA’s list of excuses goes much wider than events like these, ask why.

A delay is different from a cancellation. A cancelled project falls under specific rules on refunds, explained in our guide to what happens if a project is delayed or cancelled.

Specification, finishes and changes the developer may make

• Specification. Is there a schedule of finishes, fixtures and appliances, or only a general description?
• Substitution. May the developer replace materials or brands with “equivalent” ones, and who decides what is equivalent?
• Design changes. May the developer change the layout, the building or the community plan? Within what limits, and must you be told?
• Your remedies. What can you do if the change is significant?

The implementing bylaw lists material deviation from the agreed specifications as one of the grounds on which a buyer may ask the court to end the contract. A clear specification schedule makes it easier to show what was agreed.

Default, termination and what happens to amounts paid

If you default. The rules are set by law and apply whatever the contract says. The developer must notify DLD, DLD gives you a notice period to pay, and if you still do not pay, 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%, depending on the stage of construction certified for DLD. Near completion, the developer may instead keep the contract and claim the balance, or ask DLD to sell the unit at auction. Any amount above what the developer may keep must be refunded to you. Check that the SPA’s default clause is consistent with this and does not add penalties on top.

If the developer defaults. The bylaw lets a buyer ask the court to end the contract if the developer refuses without valid reason to deliver the final sale agreement, declines to link payments to the construction milestones proposed by RERA, materially departs from the agreed specifications, or hands over a unit that proves unfit for use because of material construction defects. Look for what the SPA adds: a right to terminate after a long delay, compensation, and how and when amounts paid are returned.

If the project is cancelled. 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.

Assignment and resale before handover

The interim register law allows a registered off-plan unit to be sold, mortgaged or otherwise disposed of. DLD’s guidance adds a practical condition. A no objection certificate (NOC) from the developer is needed to resell an off-plan unit, and the developer sets its fee.

Check the SPA for:

• whether you need the developer’s written consent, and what the developer may ask for before giving it, such as a minimum share of the price paid;
• any period during which resale is not allowed;
• the fee or charge for the consent;
• what happens to a post-handover payment plan if you sell.

The law also limits what developers may charge. Under the interim register law, a developer may not charge fees on a sale, resale or other disposition of a unit except administrative costs approved by DLD. If a resale fee in the SPA looks high, ask what it is for. Our guide to selling or assigning off-plan property before handover explains the process.

Service charges, community rules, holiday home restrictions

• Service charges. Owners pay annual service charges pro rata to unit area; charges need RERA approval. The developer pays the charges for unsold units. Check when your liability starts, and look up approved rates for the project in the DLD / RERA Service Charge Index.
• Community rules. In jointly owned property, the building and community are governed by declarations and management regulations under Law No. (6) of 2019. Ask for copies, or at least a summary, of rules that affect how you can use or let the unit.
• Short-term letting. If you may let the unit as a holiday home, check the official requirement first. A DET (formerly DTCM) licence and a holiday home permit are required. Check whether the SPA or the community rules restrict short-term letting.

Handover, defects liability and snagging

• Notice. How will the developer tell you the unit is ready, and how long do you have to pay the balance and take handover?
• Inspection. Can you inspect before accepting, with a professional if you wish, and how are defects recorded and fixed?
• Registration. Under the bylaw, once you have met your obligations the developer may not refuse to hand over the unit or register it in your name, including allocated parking.
• Defects after handover. In jointly owned buildings, Law No. (6) of 2019 keeps the developer liable for a period after handover for repairing or replacing defective installations, such as mechanical, electrical and plumbing works. Check what the SPA adds, and that it does not try to reduce what the law provides.

Our handover and snagging checklist covers the inspection itself.

Governing law and dispute route

Check which law governs the contract, which courts or arbitration body would hear a dispute, and whether you must try negotiation first.

It helps to know what DLD can and cannot do. DLD may try to reconcile a developer and a buyer, and a settlement both sides sign becomes binding once DLD approves it. Contractual disputes and claims, however, go to the courts. Disputes about unfinished and cancelled projects go to a special tribunal set up by Decree No. (33) of 2020.

When to get independent legal advice

You do not need a lawyer to sign an SPA, but independent advice is worth considering when:

• the default, delay or termination clauses differ from what this guide describes;
• you are buying through a company, with a co-buyer, or under a power of attorney;
• the developer offers special terms, such as a fee waiver or a promise to buy the unit back, that are not in the standard contract;
• a large share of the price is due before construction is well advanced;
• you do not fully understand any clause.

We can walk you through how an SPA is usually structured and point out clauses to ask about, but we do not give legal advice. For that, use a lawyer licensed in the UAE.

Our developer due diligence service includes a plain-English read-through of the SPA alongside checks on the developer and project. Go back to our overview of off-plan in Dubai for how the contract fits into the whole purchase.