Cancelling an Off-Plan Purchase in Dubai: What It Costs You

The payment plan no longer works. The project has slipped, the unit is worth less than you agreed to pay and you want out. The first thing you look for is the cancellation clause.

Cancelling an off-plan purchase in Dubai is not a right the law gives a buyer. The legislation deals with the opposite situation, which is what happens to a buyer who stops performing. It is written from the developer's side. Understanding that is the difference between planning an exit and walking into one.

There Is No Right to Cancel at Will

Article 11 of Law No. 13 of 2008 Regulating the Interim Real Property Register in the Emirate of Dubai, as replaced by Law No. 19 of 2020, sets out what happens where a purchaser fails to fulfil his contractual obligations. Every remedy in it belongs to the developer. A buyer who has grounds has a separate route, dealt with further below. It runs through the court rather than through a cancellation notice.

The procedure has more steps than most people expect. Each of them protects the purchaser.

The developer notifies the Land Department of the non-performance. The Department verifies that the purchaser is in breach. It then serves a thirty day notice requiring him to perform and, where possible, attempts to mediate a settlement. Only if that period expires without performance or settlement does the Department issue an official document in the developer's favour, confirming that he has complied with the procedure and stating the percentage of completion calculated under RERA's standards.

The developer's powers arise on receipt of that document rather than on expiry of the thirty days. At that point he may act without recourse to courts or arbitration. The Article still preserves the purchaser's right to go to court or arbitration where the developer abuses those powers.

A buyer who decides to stop paying has therefore not cancelled anything. He has triggered a procedure belonging to the other side. Its outcome is set by how far the project has progressed rather than by his own reasoning.

What Walking Away Actually Costs

The retention figures are percentages of the unit price stated in the sale agreement rather than of what the buyer has paid so far. That is the detail which catches people.

Where completion exceeds eighty percent, the developer has three options. He may keep the agreement alive, retain everything paid and claim the balance of the price. He may ask the Land Department to sell the unit at public auction to collect what is owed, with the purchaser liable for the costs. He may instead terminate and retain up to forty percent of the unit price.

Between sixty and eighty percent, he may terminate and retain up to forty percent. Below sixty percent, with construction commenced, up to twenty-five percent. Where construction never began for reasons outside his control, up to thirty percent of the amounts paid.

Where he terminates and retains, he must refund anything above the retained figure within one year of termination or within sixty days of reselling the unit to another purchaser, whichever comes first.

Read against a typical payment plan, the consequences run in opposite directions. A buyer who has paid twenty percent on a project that is forty percent built is exposed to losing what he has paid. A buyer on a nearly finished project faces worse, because the developer can hold him to the full price rather than keep the deposit.

The Exit That Usually Works

Most buyers who get out of an off-plan purchase never use the law at all. They sell the unit on.

An assignment to a new purchaser requires the developer's no objection certificate and is subject to any threshold in the sale agreement for the percentage of the price that must have been paid before a transfer is allowed. The interim register entry is then updated in the new buyer's name.

What the developer can charge for it is not open. Article 7 of Law No. 13 of 2008 prohibits any fee on the sale, resale or other legal disposition of a unit, other than administrative costs approved by the Land Department. Article 8 of the Implementing Bylaw repeats the point: a developer may not, for any reason whatsoever, charge a purchaser any amount in return for a legal disposition of his unit other than amounts approved by the Department. A transfer fee that does not match an approved figure is worth questioning rather than paying.

The route itself depends on the developer's cooperation rather than on a statutory right to assign. It still produces the best outcome in most cases, because it replaces a dispute about retention percentages with a transaction. It is also the only exit where the buyer influences the price he gets back.

When the Developer Is the One in Breach

Where the buyer has genuine grounds, the question is no longer what the developer may retain.

Article 20 of the Implementing Bylaw, issued by Executive Council Resolution No. 6 of 2010, allows a purchaser to ask the competent court to terminate the relationship. The grounds are the developer refusing without a reason acceptable to the Land Department to deliver the final sale agreement, declining to link payments to the construction milestones proposed by RERA, materially deviating from the agreed specifications, the unit being proven after handover to be unfit for use because of material construction defects, plus any other circumstances requiring termination under the general legal rules.

Delay is not named in that list. It may fall within the final ground, which routes to the Civil Transactions Law, but only where it is serious enough to justify termination when read against the completion date, any contractual extension, the reasons for the delay and whether the developer is still performing. A court is not obliged to terminate because a breach is proven. It may order performance with compensation instead.

Which version of the Civil Transactions Law applies turns on when the sale agreement was signed, since Federal Decree-Law No. 25 of 2025 governs contracts entered into from 1 June 2026, while earlier agreements remain under Federal Law No. 5 of 1985. Both require formal notice before a party can demand performance or termination.

Sequence matters more than grounds. A buyer who stops paying first and looks for grounds afterwards is answering a breach with a breach. The thirty day notice tends to arrive before his claim does.

When RERA Cancels the Project

Article 11 also covers two further situations: where the developer has not commenced work for reasons beyond his control, plus where the project is cancelled by a final and reasoned RERA decision. In both, the developer must refund all amounts received from purchasers, following the procedures in Law No. 8 of 2007 Concerning Escrow Accounts for Real Property Development in the Emirate of Dubai.

These are the only scenarios in the framework where the money comes back in full. Disputes about cancelled projects sit with the Special Tribunal established by Decree No. 33 of 2020.

A File That Turned on the Completion Percentage

A buyer has paid thirty percent of a AED 2.4 million apartment across eighteen months. The handover date has moved twice and he wants out. He stops paying and writes to the developer cancelling the contract because of the delay.

The project is eighty-four percent complete. The developer notifies the Land Department and the thirty day notice is served. The developer then elects to keep the agreement alive and claim the remaining seventy percent of the price. The buyer expected to lose his deposit. He is now being asked for AED 1.68 million.

When a matter like this reaches me as a Legal Consultant, the assessment runs in this order:

1. The completion percentage as RERA calculates it, rather than the developer's own statement
2. Whether any notice has already been served through the Land Department, with the date
3. What the sale agreement says about assignment, including any payment threshold before a transfer is allowed
4. Whether the buyer has grounds under Article 20 or merely a delay he has not formally notified
5. Whether the project is on any RERA cancellation or audit list
6. What has been paid against what the payment plan required, from the escrow receipts

Buyers reach for the word cancellation because it sounds like something they can do. Used on its own it usually describes something done to them. The ones who get out cleanly are almost always those who found a purchaser rather than an argument.

There is more on how these matters are assessed on the page covering property disputes in Dubai.