Ask Gulf News: Can a Dubai developer forfeit your off-plan property if you miss payments

Question: I bought an off-plan property and lost my job and became unable to pay the monthly instalments. The developer sent me a notice requesting payment; otherwise, it will forfeit the apartment and the money. Does it have the right to do so? What should I do to avoid this?

Answer: Based on Dubai real estate laws (Law No. 13 of 2008 and its amendments under Law No. (19) of 2020), developers have the right to terminate a contract if a buyer defaults on payments, after following a regulated procedure.

The developer must notify the Dubai Land Department (DLD) about the default. The DLD will then send you an official 30-day notice to settle the amount. If you fail to pay within 30 days, the developer can cancel the agreement and retain a portion of your money, based on construction progress:

Less than 60% complete: Developer can keep up to 25% of the property value.
60%–80% complete: Developer can keep up to 40% of the property value.
Over 80% complete: Developer can request the DLD to sell the real property unit, or maintain the off-plan sale agreement, or terminate the off-plan sale agreement and retain up to forty percent (40%).

If the amount the developer keeps exceeds these percentages, they must refund you within one year of termination or 60 days after reselling the unit, whichever occurs earlier.

You must try to settle the matter with the developer and not ignore the notice. You may request a lower payment plan or ask for their acceptance to sell the property. If the developer is not cooperating, file a complaint with the DLD to help settle the matter.