What Is Off-Plan Property and How Does Buying It Work

Off-plan property is a unit you buy from a developer before it is built, or while it is still under construction. You agree the price and a payment schedule in a sales and purchase agreement (SPA), the developer registers the sale with the Dubai Land Department (DLD), and you pay instalments into the project’s escrow account as the building goes up. When the project is complete you pay any balance, inspect the unit, take the keys and receive your title deed.

This guide is part of our overview of buying off-plan in Dubai. It explains what that means in practice, who is involved, how your money is protected, how you pay, and what can go wrong. It is written for first-time buyers, but it is also a useful checklist if you have bought ready property before and are considering off-plan for the first time.

What “off-plan” means

“Off-plan” describes the stage of the property when you buy it, not a type of property. Apartments, townhouses and villas can all be sold off-plan. You decide based on plans, specifications, a brochure, a show unit or a model, because the unit itself does not exist yet.

Dubai law defines an off-plan sale as the sale of property units that are designated off-plan or that are unfinished. That definition sits in Dubai Law No. 13 of 2008 on the interim real estate register, as amended in 2020, which also sets the rules for registering these sales and for what happens if either side does not keep to the contract.

Three features set off-plan apart from buying a finished home:

• You pay over time. The developer sets a payment plan, and part of the price falls due before the building exists.
• You wait for delivery. The completion date in the SPA is a target. The contract usually allows a grace period, and projects can run late.
• Your rights are registered before the title deed. Until completion, your purchase is recorded in an interim register rather than the main property register.

A developer cannot simply announce a project and start selling. The law requires a developer to take possession of the land and obtain the approvals from the competent authorities before it sells units off-plan, and a sale made before the project is approved and registered with DLD is void under the implementing bylaw.

How an off-plan purchase works in Dubai

The journey has the same main stages for almost every project:

1. Choose and verify. You shortlist projects and check each one, and its developer, on DLD’s official services.
2. Reserve. You sign a reservation or booking form and make a first payment.
3. Sign the SPA. The SPA sets out the unit, the price, the payment schedule, the completion date and what happens if either side defaults.
4. Register. The developer registers the sale in the interim register through DLD’s Oqood portal, and DLD’s registration fee is paid.
5. Pay instalments. You pay into the project’s escrow account as the schedule requires.
6. Track construction. You follow progress through DLD’s project status service and the developer’s updates.
7. Complete. You pay the final instalment, either from your own funds or with a mortgage.
8. Take handover. You inspect the unit, report defects, receive the keys, and the unit is registered in your name.

Each step is covered in detail in our step-by-step guide to buying off-plan in Dubai.

Who is involved

• The developer builds the project and sells the units. Under Dubai Law No. 8 of 2007 on escrow accounts, no developer may carry on this business unless it is entered in DLD’s Register of Real Estate Developers and licensed by the competent authorities. You can search the list of licensed developers on the DLD website.
• The Dubai Land Department keeps the property registers, including the interim register for off-plan sales, and issues title deeds.
• RERA, the Real Estate Regulatory Agency, is a public body affiliated to DLD. Under Law No. (4) of 2019 it regulates and monitors escrow accounts, approves development projects, monitors their completion, approves the content of property advertisements and licenses brokers.
• The escrow agent is the bank or financial institution, accredited by DLD, that manages the project’s escrow account.
• A broker may help you find and compare projects. Brokers must be licensed and entered in the DLD Real Estate Brokers Register; registration number must appear in all correspondence. You can check a broker on DLD’s licensed brokers service.
• A lender is involved only if you use a mortgage, usually at or near completion.

What you own before handover

Before completion you do not hold a title deed. What you hold is a registered off-plan purchase. Under Dubai Law No. 13 of 2008 on the interim real estate register, as amended in 2020, every sale of an off-plan unit must be entered in the interim register, and a sale that is not entered is void. DLD’s online system for this is called Oqood, and DLD requires the contract to be registered within 90 days of signing the sale and purchase contract. When it is done, DLD issues a provisional registration e-certificate and emails it to the purchaser.

If a developer refuses or delays registering your contract, DLD’s guidance is that you can apply to its Real Estate Registration Assurance section with your supporting documents. That registration is what gives your purchase legal standing. The law allows a unit entered in the interim register to be sold, mortgaged or otherwise disposed of. When the project is complete, the developer must transfer completed units to the main property register in the names of buyers who have met their contractual obligations, and DLD issues the title deed. Registration also comes with fees, which are explained below.

What happens at completion

Completion is a legal and practical milestone, not just the day the scaffolding comes down. The developer obtains a completion certificate from the competent authorities and then asks buyers to settle what remains under their payment plan. If you are using a mortgage, this is usually when the bank values the finished unit and releases its share.

Once you have met all your contractual obligations, the implementing bylaw says the developer may not refuse to hand over your unit or to register it in your name, including allocated facilities such as a parking space. If a developer refuses without reason, DLD may register the unit in your name on your request or on its own initiative. DLD charges an AED 250 title deed certificate issuance fee when it issues the deed.

Handover is also when your running costs start, including service charges in jointly owned buildings and communities. Owners pay annual service charges pro rata to unit area; charges need RERA approval. You can look up approved rates for a project in the DLD / RERA Service Charge Index before you buy, so that the cost of owning the finished unit is part of your plan from the start.

How your money is protected

The main protection for off-plan buyers in Dubai is the project escrow account. Under Dubai Law No. 8 of 2007 on escrow accounts:

• the developer must open an escrow account for each project, in the project’s name, with an escrow agent accredited by DLD;
• buyers’ payments, and any project financing, are deposited into that account;
• the account may be used only for building that project, and the developer’s creditors cannot attach the money in it;
• after the completion certificate is issued, the escrow agent retains 5% of the escrow account, held back for one year after the units are registered to buyers.

The implementing bylaw adds a rule that matters for you directly. Brokers must pay off-plan buyer money straight into the project escrow account, without deducting commission. Any agreement that says otherwise is void.

If a project fails, the law also sets out what should happen. 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. In practice, how much is recovered and how quickly depends on the funds available, so escrow reduces risk but does not remove it.

Escrow does not protect you against delay, changes to the specification, a fall in value, or the consequences of missing your own payments. Our guide to escrow accounts and buyer protection covers what escrow does and does not do, and how to check that you are paying into the right account.

How you pay: payment plans in brief

The developer sets the payment plan, and it is written into the SPA. The common structures are:

• Construction-linked plans, where instalments fall due as the project reaches set stages of completion.
• Date-based plans, where instalments fall due on fixed dates regardless of progress.
• Post-handover plans, where part of the price is paid in instalments after you receive the keys.

On top of the first instalment, DLD registration fees are paid when the sale is registered. For an off-plan sale, DLD lists these fees: 4% of the sale value (2% from the seller and 2% from the buyer), an AED 10 knowledge fee and an AED 10 innovation fee, and AED 1,000 when the developer registers the sale in Oqood itself. The main fee, 4% of the property value, is listed as split between seller and buyer, but it is paid according to what the parties agree, so check your SPA and booking terms for who pays it.

Before you commit, ask the developer for a written breakdown of everything due at booking and at registration, including any administration charges. DLD’s list of fees for an off-plan registration does not include a separate “Oqood fee” beyond the items above, so if a quote shows one, ask what it covers. It also helps to write your own schedule: each instalment, its due date or trigger, and where the money will come from. If any instalment depends on selling something else, or on a bonus that is not yet certain, treat that as a risk to solve before you sign rather than after.

If you plan to use a mortgage, remember that banks may lend no more than 50% of the property value on an off-plan purchase, and each bank applies its own criteria. The rest comes from your own funds. Our guide to off-plan payment plans explains each structure and how to compare two plans, and the payment plan calculator lets you map a schedule against your own cash flow.

Off-plan compared with buying a ready home

Neither route is better for everyone. Our guide to off-plan vs ready property sets the two side by side in more detail, including costs and visa points.

Who off-plan tends to suit and who it may not suit

Off-plan may suit you if:

• you have a time horizon that comfortably covers construction and a possible delay;
• you prefer to spread payments over the build rather than pay the full price at once;
• you want a new unit in a community that is still being developed;
• you have reliable funds for every instalment, and a plan for the balance at completion that does not depend on a single mortgage offer.

Off-plan may not suit you if:

• you need to live in the property, or earn rent from it, soon;
• your budget only works if everything runs to schedule;
• you are relying on selling before completion to fund later instalments;
• you would not be comfortable if the finished unit differed in detail from the brochure, within what the SPA allows.

A useful test is to write down what you would do in three situations: handover is a year later than the SPA date, the bank lends less than you hoped at completion, and the unit is worth less at handover than you paid. If you have a workable answer to all three, off-plan may fit your plans. If any of them would force you to sell or default, look again at the budget, the payment plan or the type of property.

The main risks in one list

• Delivery risk. Projects can be delayed, and some are cancelled.
• Specification risk. The finished unit may differ from what you saw, within the limits of the SPA.
• Market risk. The value at handover may be lower than the price you paid.
• Financing risk. A bank may lend less than you need, or decline, at completion.
• Liquidity risk. Selling before handover needs the developer’s no objection certificate and a buyer at your price.
• Cash-flow risk. Instalments continue whatever happens to your income or, for overseas buyers, your currency.
• Default risk. If you stop paying, the law allows the developer, after notice through DLD, to 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 how far construction has progressed.
• Counterparty risk. Unlicensed sellers, unregistered projects and payments outside escrow put your money at risk.

Each of these is explained, with ways to manage it, in our guide to the risks of buying off-plan.

Where to check official information

You do not need to rely on a brochure or a sales conversation. These official services let you check the facts yourself:

• Project status. DLD's Project Status Enquiry (Mashrooi) on the DLD website and in the Dubai REST app lets you search a project by name or number and see its status, completion, developer and escrow bank.
• Dubai REST. The Dubai REST app shows off-plan project data such as the percentage of completion, photos, the escrow account number and the payments due on your unit.
• Licensed developers. DLD publishes the list of licensed developers.
• Licensed brokers. DLD’s broker search shows whether a broker is licensed.
• Advertising permits. Every real estate advert needs a Trakheesi permit, and the permit number and QR code must appear on the advert. If an advert has no permit number or code, ask why.
• Transactions. DLD’s Real Estate Data service lets you look up registered sales, including off-plan sales, and project records.

If you would like a second view on a specific project or plan, our off-plan advisory service walks through these checks with you. Every consultation is free, with no obligation.