Insights · AXD Real Estate Dubai
Reservation Fee Dubai Off-Plan — When Is It Refundable?
Reservation Fee Dubai Off-Plan
The reservation fee for Dubai off-plan is typically AED 5,000–50,000 or 5–10 % of the purchase price. Whether it is refundable depends on the Reservation Agreement — a statutory repayment obligation arises only after RERA registration and SPA. DACH buyers should anchor refund clauses in writing before payment.
Three Phases — Three Legal Consequences
| Phase | Legal Basis | Refund |
|---|---|---|
| Before Reservation Agreement | Civil Code 5/1985 | Full (no binding) |
| After Reservation Agreement, before SPA | Contract clause | Only if refund clause present |
| After SPA, before RERA registration | Civil Code + SPA | According to breach-of-contract logic |
| After RERA registration (Oqood) | Dubai Law 13/2008 § 11 | Staggered by construction progress |
Section 11 Law 13/2008 — the Buyer Protection Track
Dubai Law 13/2008 as amended by Law 19/2017 governs the consequences of buyer non-payment after RERA registration. The construction progress at the time of cancellation is decisive:
- Construction progress < 60 %: After RERA notification and a 30-day cure period, the developer may terminate the contract — the buyer receives the down payment back proportionally, less up to 40 % penalty.
- Construction progress 60–80 %: Return of the down payment less up to 40 % penalty; alternatively, the developer may resell the unit and retain the difference.
- Construction progress > 80 %: The developer may insist on full payment or sell the unit and retain a 40 % penalty.
Developer cancellation (e.g. project abandonment): Full refund of all amounts paid from the RERA escrow.
What DACH Buyers Should Anchor in Writing
- Specific unit, size, floor plate, purchase price and payment plan.
- SPA signing deadline (typically 30–60 days) — expiry triggers refund.
- Refund clause in case of non-agreement on final SPA terms.
- RERA registration date as a condition for the next tranche.
- Applicable law: Dubai Courts or DIFC Courts (determine before signing).
Related Topics
- Cooling-Off Period Dubai Off-Plan
- Escrow Account Dubai Off-Plan
- Payment Default in the Off-Plan Contract
- Construction Delay — Buyer Rights
Sources
- Dubai Law 13/2008 (Interim Real Property Register), Section 11
- Dubai Law 19/2017 (Amendments to Law 13/2008)
- Dubai Law 8/2007 (Escrow Account)
- UAE Federal Law 5/1985 (Civil Code) — general contract law
- Dubai Land Department — Investor Protection
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