Dubai’s Laws for Unfinished or Cancelled Real Estate Projects
The off-plan properties are counted among the most lucrative real estate investment opportunities. These types of properties are preferred for investment, as their value increases soon after completion. However, not all the off-plan properties are completed on time and in rare cases, some even get liquefied after certain delays. To cater to this, the Dubai government has drafted a set of rules and regulations related to the unfinished or cancelled off-plan projects in Dubai.
Let’s get through these laws for cancelled real estate projects in Dubai in more detail.
Real Estate Law for Cancelled Projects in Dubai

The Decree No. (21) of 2013 is the law that deals with cancelled off-plan projects in Dubai. A recent amendment Decree No. (33) of 2020 has also been issued by the Dubai government to make this law more effective.
According to the law, a Special Tribunal for the Liquidation of Cancelled Real Property Projects will be held responsible for
- Governing and catering to all the legal aspects related to the cancelled real estate projects.
- In case, if the project is not cancelled and transferred from one investor to another, the Tribunal will decide the rights of each investor.
- If the project is announced cancelled by RERA Dubai, then the Tribunal will be held responsible to settle all the dues and other legalities of buyers.
- The authority will also be responsible to review the annulment or ratification of arbitral award requests.
All of the above-mentioned rights will be practised when the project is either cancelled or delayed due to unpredictable reasons. However, if the project is not initiated even after the date issued by the developer, or the project is cancelled by the RERA due to certain reasons, the developer will have to pay the investors completely. In these circumstances, the developer of the real estate project will be held responsible and will be dealt with as per the rules and regulations of the Emirate.
Cancelled Real Estate Projects in Dubai
Apart from the aforementioned reasons, there are different laws that govern if the property is cancelled by the buyer or the developer. Here are the details regarding the law that will govern each case.
By Buyer’s Default

There are multiple aspects that need to be considered when buying an off-plan property in Dubai. One of which is the finances to pay the whole amount of the project. Many developers allow buyers to sell their properties after a certain percentage of the total amount has been paid. However, if the buyer is unable to pay the amount before that percentage they will be counted as a defaulter.
A defaulter buyer will be governed by Law No. 19 of 2017. The law allows the developer and DLD to cancel the contract with the defaulter party. However, the following steps are required to be catered by the developer.
- The developer will notify the Department of Economic Development (DED).
- The DED is then obligated to notify the buyer about their defaulting condition and the buyer will be provided a time of 30 days to repay the remaining amount.
- In case of non-compliance between both the parties (developer and buyer), DLD will issue a deregistration of the Sales and Purchase Agreement (SPA) on the demand of the developer.
After the notice, the property will be sold to another interested buyer or in a public auction to recover the remaining amount. In case, the buyer has already paid 40% of the total amount, the developer can retain 60 to 80% of the purchase price and return the exceeding amount to the defaulter (buyer).
However, if the paid price is less than 60% then the developer can hold 25% of the total amount and return the exceeding amount to the buyer. Whereas, if the construction of the project is not started, then the developer can hold 30% of the total amount paid by the buyer. This is also considered a breach of contract between buyers and developers, and buyers can consult the court for the settlement of this issue. In both cases, the developer has a time of 12 months to repay the buyer after successfully selling the property to the new owner.
By Developer’s Default
Apart from buyers, developers can also get default in real estate projects due to multiple reasons. The most common reason that leads to the developer defaulting is a delay in the project. Under Law 19 of 2017, the buyer can consult with the court if they believe that the delay in the project is unexplained. The buyer can term it as Force Majeure and can claim compensation accordingly from the court.
Alongside this, a new amendment in the Emirate Interim Real Estate Register was also introduced to safeguard the rights of buyers in off-plan properties in Dubai. In case, the project is delayed by the developer due to unexplained reasons, the developer will have to refund the complete amount to the buyer. This law is also applicable if the project is delayed or cancelled by the RERA due to any reason. The core purpose of this amendment is to ensure the rights of buyers and obligate developers to hand over the project on the pre-approved dates.
These were the complete details regarding laws for cancelled off-plan projects in Dubai. Along with these laws, you can also use the DLD app to continuously monitor the progress of your off-plan projects in Dubai. Off-plan properties are considered a secure way of investing in real estate, but it has multiple aspects that need to be considered. Therefore, if you are new to the industry, it is recommended to purchase a villa for sale in Dubai as a real estate investment. This will aid you in understanding the overall dynamics of the industry and the aspects to consider before investing in any project. Along with this, villas are generally considered a solid investment with a secured return on investment contrary to other types of real estate investments.
You can also read our blog on different ways to minimise risk when investing in a property in Dubai for more information on secure real estate investments.
Stay tuned to UAE’s leading property blog for more information on Dubai’s cancelled projects 2022.