Insights · AXD Real Estate Dubai
What Happens If I Do Not Pay Off-Plan Instalments in Dubai?
What happens if I do not pay off-plan instalments in Dubai?
Under UAE Law 19/2017 (Article 11 in Law 13/2008), the developer must send a 30-day notice via the DLD conciliation body, followed by a 60-day cure period. If payment is still not made, the SPA can be cancelled — with staggered retention of 0–40 % of amounts paid depending on construction progress.
The statutory default path in five steps
Trigger. A due instalment under the SPA payment plan is not paid.
30-day notice. The developer submits the case to the DLD conciliation body. This body sends the formal notice to the address recorded in the SPA. The period begins upon delivery.
60-day cure period. After the notice period expires, a 60-day cure period begins. Within this period the buyer can pay outstanding instalments or agree a payment plan with the developer — see Off-Plan Payment Plans Dubai.
SPA cancellation. If default continues, DLD and the developer formally cancel the contract. The unit is removed from the Oqood register and can be reallocated.
Refund. Within 12 months of resale, the developer refunds the remaining amount after deduction of the permissible retention rate (see table).
Retention rates by construction progress
| Construction Progress | Max. Retention | Refund Period |
|---|---|---|
| ≥ 80 % | Full + auction for remaining amount | After resale |
| 60–80 % | 40 % of amounts paid | 12 months after resale |
| 40–60 % | 25 % | 12 months after resale |
| < 40 %, construction started | 25 % | 12 months after resale |
| Construction not yet started | 30 % in case of developer fault, otherwise full retention | 60 days after cancellation |
Economically better alternative — assignment before default
If the liquidity situation foreseeably forces a default, assignment (resale of the off-plan unit before handover) is regularly the economically better option. Prerequisite: 30–40 % payment status, no default, developer NOC. Full mechanics under Off-Plan Assignment Before Handover.
The cooling-off period also offers cancellation protection on initial conclusion — see Cooling-Off Period Dubai Off-Plan.
Sources
UAE Law 19/2017 (amendment to Article 11 in Law 13/2008)
UAE Law 13/2008 (Real Estate Registration), Article 11
Dubai Land Department, Off-Plan Cancellation Procedure
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