Answers · Off-plan vs ready
What happens if an off-plan project is delayed?
A delay on its own gives you no statutory remedy in Dubai. Law No. 13 of 2008 sets no handover deadline and imposes no penalty for missing one. Your protection sits elsewhere, in the escrow account under Law No. 8 of 2007 and in RERA’s power to cancel a project, which triggers a refund of everything you paid.
Updated September 2026 · By Ahmed Kandil
Most pages on this question quote a sliding scale of 40% and 25% and present it as what you get back when your developer is late. That is a misreading, and acting on it will cost you.
The 40% and 25% figures are about your default, not the developer’s
Article 11 of Law No. 13 of 2008, as amended by Law No. 19 of 2020, opens with the purchaser breaching the contract, and the whole article is written from that direction. When a buyer stops paying, the developer notifies the Land Department, the Department serves a 30-day notice on the buyer to put it right, and if that passes the developer’s remedies depend on how far the project has got.
| Project completion | What the developer may do if the buyer defaults |
|---|---|
| Above 80% | Retain all amounts and claim the balance, or seek a public auction sale, or terminate and retain up to 40% of the unit value |
| 60% to 80% | Terminate unilaterally and retain up to 40% of the unit value |
| Below 60% | Terminate unilaterally and retain up to 25% of the unit value |
Where the developer terminates and retains a percentage, the balance is refunded within one year of termination or within 60 days of the unit being resold, whichever comes first.
Notice who is in breach in every row. There is no mirror-image version of this table for a developer who hands over two years late. I looked for one, and Law No. 13 of 2008 contains no completion deadline, no delay penalty and no compensation formula. Article 8 requires a developer to enter a completed project in the Property Register once it receives the completion certificate, and says nothing about when that certificate has to arrive.
What does protect you
Two things, and neither is a penalty clause.
The escrow account, under Law No. 8 of 2007. Every payment you make goes into an account dedicated exclusively to the construction of that project, and Article 9 protects it from the developer’s other creditors. Article 14 makes the escrow agent hold back 5% of the account’s total value once the developer obtains the completion certificate, released only one year after the units are registered in purchasers’ names. Article 15 is the one that matters when a project stalls, because it requires the escrow agent to take the measures needed to preserve depositors’ rights and either see the project completed or see depositors refunded.
Cancellation by RERA. The amended Article 11 provides that where a project is cancelled by a final reasoned decision of RERA, the developer must refund all payments made by purchasers under the Law No. 8 of 2007 procedure, which is all of it and not a percentage.
Decree No. 33 of 2020 then created the Special Tribunal for Unfinished and Cancelled Real Property Projects in the Emirate of Dubai, which can assign completion to a different developer, liquidate a cancelled project and settle the rights attached to it, and order the escrow agent or the developer to refund what was paid. Its awards are final and not subject to ordinary appeal, which cuts both ways, and it does not cover projects inside the DIFC.
What to do when your project is running late
- Read your own contract first. Any grace period, any liquidated damages, any right to terminate for delay comes from the sale and purchase agreement and not from the law, and almost nobody reads that clause before signing.
- Check the project on Dubai REST. The Land Department’s app gives the percentage of completion, photographs of the project, the escrow account number and payments due. If the percentage hasn’t moved in two quarters, you have evidence rather than a suspicion.
- Keep paying what the contract says, unless a lawyer tells you otherwise. Withholding an instalment because the project is late can put you in that table rather than the developer.
- File with RERA. Cancellation is RERA’s decision to make and the refund obligation follows from it, so a documented complaint is what starts the machinery.
- Only then look at the Tribunal or the courts, with advice. I work in real estate, I don’t practise law, so I’m not going to sit here and tell you how to plead a case.
Now if you ask me, the honest version of this answer is uncomfortable. Dubai’s off-plan framework is strong at protecting your money and close to silent on protecting your time. Escrow means a cancelled project usually returns your capital, and nothing in it returns the three years you spent paying for a home you couldn’t live in or rent out.
Which means the delay risk is real and it is priced into nothing. That is an argument for choosing the developer more carefully than the unit, and for treating a long payment plan on an unproven developer as the expensive option it is, whatever the headline discount looks like. Of course there is a downside to everything, and the downside of only buying from the largest names is that you pay more per square foot for the same address.
So this suits a buyer who can afford for the handover date to be wrong by a year or two. If you need a home by a fixed date, buy something that exists. That’s just an opinion. But this is how the law reads.
Questions I get asked next
- Can I cancel and get a full refund because my project is late?
- Only if your contract gives you that right, or if RERA cancels the project, in which case all payments must be refunded under Law No. 8 of 2007. A delay by itself does not create a statutory right to a refund.
- Is my money safe if the developer goes under?
- The account is dedicated to that project and protected from the developer’s other creditors under Article 9 of Law No. 8 of 2007. What is safe is what is still in it, so a project that has already drawn most of its money down is a different position from one that has barely started.
- Can I claim compensation for the years I lost?
- Not under Law No. 13 of 2008, which contains no delay penalty. Anything you can claim comes from your own contract.
Related
Is off-plan property in Dubai safe? · Which Dubai developers are the most reliable? · How do post-handover payment plans work? · Can you sell off-plan property before handover? · All Dubai property answers
Sources
- Law No. (13) of 2008 Regulating the Interim Real Property Register in the Emirate of Dubai — Articles 3, 4, 7, 8, 11; confirmed to contain no handover deadline and no delay penalty. Dubai Legislation portal
- Law No. (19) of 2020 Amending Law No. (13) of 2008 — amended Article 11: the 80% / 60–80% / below-60% tiers, the 40% and 25% retentions, the one-year / 60-day refund windows, the 30-day notice, and the RERA-cancellation refund of all payments. Issued 24 November 2020
- Law No. (8) of 2007 Concerning Escrow Accounts for Real Estate Development in the Emirate of Dubai — Article 7 (deposits), Article 9 (exclusive dedication and creditor protection), Article 14 (5% retention until one year after registration), Article 15 (incomplete project: preserve rights, complete or refund)
- Decree No. (33) of 2020 Concerning the Special Tribunal for Unfinished and Cancelled Real Property Projects in the Emirate of Dubai — Article 2(b) name, Article 6(a) jurisdiction and the power to assign completion or liquidate, Article 7 refund orders, Article 11 finality. Issued 24 November 2020
- Dubai Land Department, Dubai REST — completion percentage, project photographs, escrow account number, payments due
The delay clause and the escrow number are the first two things I check on any off-plan contract. My off-plan checklist covers the rest, and if you want me to read a specific contract’s delay terms with you, text me on WhatsApp.
Text me on WhatsApp