Buying real estate in Dubai is indeed very exciting, especially with the deal of off plan properties. These are classified as those under construction or yet to be built; hence, a buyer gets a chance to purchase it at a lower price than that of the completed ones. To successfully invest in such, however, one needs to know what off plan property contracts are all about.
What Are Off Plan Properties?
Off plan properties are developments sold before they have been built. Because of the architectural plans and renderings plus specifications that the developer provides, a buyer buys a property based on them. This is how investors benefit from cheaper prices and potential appreciation when the project is completed.
Why Invest in Off Plan Properties?
There are reasons why you may want to invest in off plan properties:
- Lower Initial Costs: Off plan properties cost less than ready-to-move homes.
- Easy Payment Schemes: Developers offer many attractive payment schemes wherein the buyers can pay in installments.
- Opportunity for Growth: As nearing completion, property values will go up.
Jargon of Off Plan Property Contract

Understanding the language used in off plan property agreements is extremely important in maximizing ROI while going about the real estate market. Below is an in-depth look at some of the most key terms you should know when investing in off plan properties in Dubai.
Reservation Fee
A reservation fee is usually paid in advance by the buyer, either in the form of small money meant to secure the property. The said fee amount varies between 5% and 10% of the amount of the buying price. This was done to show that the buyer is willing to effect the transaction, and the fee amount is not refundable. This fee is often netted out of the entire expense incurred over purchasing the property when selling finally happens.
Key Points:
- Non-Refundable: This deposit may be forfeited if you have a change of heart.
- Amount: This differs with each developer, but it most commonly represents a percentage of the sale price.
- Documentation: You should receive a receipt or acknowledgement once you make the
payment.
Purchase Price
The purchase price is the amount agreed upon to purchase the property. This price is not one “dollar figure”; it may include a number of extras, such as:
- Service Charges: Levies for common areas and services.
- Maintenance Fees: Post-handover servicing cost of the property.
- Other Charges: Transfer fee, registration fee, etc., according to the prevalent tax structure.
Key Points:
- Some Offerings Are Negotiable: some builders may accept negotiations on the price. Price will be clearly stated in the sales contract.
- Payment Structure: Understand how the purchase price is to be divided into the number of payments.
Payment Schedule
The payment schedule is one of those essential parts of the contract when buying an off plan property. This detailed section explains the dates and amounts of the payments. The mode of payment usually comes in the following form:
- Reservations Advance Payment: This may often be paid at the signing time of the reservation agreement.
- Subsequent Payments: Could be tied to the actual construction milestones, such as when the base or structure is finished, etc.
- Final Payment: This is paid upon completion handover or at the very last finish of the property.
Key Points:
- Clarity: This payment schedule needs to be very clear in the contract.
- Avoiding Stress about One’s Finance: This schedule shall be helpful in planning and budgeting.
- Variation: Some conditions may alter or change the payment structure.
Completion Date
Completion date The completion date is when the developer promises to have completed the property’s construction. This deadline is thus important to the buyer since it creates an expectation of when the person can begin taking possession of his new house.
Key Points:
- Delays: This can be caused by a lot of factors; it may be because of regulatory approvals or whatever construction-related delays there are. Knowing what it means in terms of implications is important.
- Contract Clauses: Look for conditions on the contract about delay, wherein compensation or penalties for the developer.
- Completion: This usually entails a final inspection period before handover.
Handover Process
Handover is the formality that transfers ownership from the developer to the buyer. The process incorporates the following:
- Final Inspection: The buyer will inspect the property to check that everything agrees with the specifications and is up to standard.
- Paperwork: The buyer will prepare the documents as needed. The buyer should endorse the title deed.
- Final Payments: All the outstanding payments should be made in full prior to key handing.
- Handing keys over: Upon satisfaction of all conditions, the keys are handed over to buyers. These are allowed into possession.
Key Points:
- Detailed Inspection: Inspection of the place and report the issues on hand.
- Legal Compliance: All legal documents should be in order at the time of handing over.
- Post-Handover Support: What kind of support does the developer offer for defects or issues arising post-move-in?
Being well-informed about the conditions and terms of any off plan property contract in Dubai means knowing some key terms. Examples include a reservation fee, purchase price, payment schedule, completion date, and handover process. This knowledge can only serve to aid you in making wise decisions to protect your investment. Always read contracts carefully, and where possible, get professional legal advice to clear up any confusion. Knowledge is power as you confidently take off on an off plan journey in Dubai.
Terms and Conditions of Off Plan Property Contraction

Off plan property contracts have essential terms and conditions. Key issues that form part of these terms include:
Obligations of the Developer
The contract should communicate the developer’s responsibility as it pertains to quality construction and deliveries following the agreed timeline.
Obligations of the Buyer
Buyers must know what they are responsible for, such as following the payment schedule; buyers also need to ensure that they meet financing that may be required.
Cancellation Policies
It is also significant to know the cancellation terms. If you consider backing out of the deal, then know how much you will pay for it.
Transfer Fees
The transfer of ownership might incur additional costs for the buyer. These should be outlined in detail in the contract.
Warranty and Maintenance
The agreement should state the kind of warranties offered on the property and what should be done by way of maintenance after the handover.
Risks Related to Off Plan Property Contracts
Off plan properties are very advantageous, but not without risk. Understanding the risks will help the buyers make informed decisions.
- Delays in Construction: One of the common problems relating to off plan properties is delayed construction. Being aware of how construction delays work against your investment would be great.
- Market Fluctuations: Land real estate markets do not give up. Current market value may shift due to several dynamics that will emerge before completing your project.
- Developer Credibility: Not all developers are the same. It would be foolish and often unwise to bet your hard-earned cash on anyone. That is why researching a developer’s credentials is essential in reducing risk.
Overview of Dubai Off Plan Property Laws

Any investor should understand the Off Plan Property Laws of Dubai. Off plan sales are controlled by Dubai Land Department, DLD, which gives full understanding and protection in favour of the buyer. Some of the important considerations for the following points are as follows:
Registration with DLD
Registration is necessary with the DLD for all off plan properties. This implies that the property is very well recognized as genuine, and the developer has not only acquired all necessary approvals.
Escrow Accounts
Escrow accounts are arrangements for holding funds for the completion of a project. These accounts are established to ensure that the money paid to the off plan developer doesn’t get misused or embezzled.
The developers must open escrow accounts to manage the amount received from buyers. This way, the buyer’s money will solely be used in construction.
Sales Contracts
DLD sales contract requirements shall also be met. These are the sales contracts that must define the duties on the part of both parties in clear words.
Dispute Resolution
In case of disagreements, customers can resort to litigation processes. This is commonly made available through either the DLD or RERA.
Conclusion
Buying off plan property in Dubai can be very profitable if done correctly. The numerous terms, conditions, and requirements need to be known when investing. Understand the legalities involved here to protect your investment. You have to approach this stage by taking professional advice and doing thorough research before making decisions.
For further information, you may visit our Off Plan Properties Dubai page.
FAQs
How early can he sell the property when a client purchases an off plan?
A client can sell an off plan property only after the end of the cooling-off period, which is usually 30 days, and after obtaining permission from the developer. The sale can occur only upon receipt of the title deed, which occurs after handover.
Is it possible to sell off plan property in Dubai?
In Dubai, you are allowed to sell off plan. However, that will typically require the consent of the developer and would typically only be allowed once a title deed has been issued, once complete and handed over.