How to Recover Your Money from an Off-Plan Property Without an SPA in UAE?

Buying off-plan property in the UAE is not common, especially in Dubai and Abu Dhabi. But there are many buyers who make down payments or deposits before executing an SPA. So the big question is: what if the project gets delayed, is cancelled, or the developer stops responding? How to get the money back without an SPA?

Buyers can rest assured that they are protected by UAE laws when purchasing off-plan properties, especially Dubai Law No. 13 of 2008, Law No. 19 of 2020, and the Escrow Law No. 8 of 2007 are relevant to protect them. There are also legal rights even without an SPA.

If you do not know how to get your money back under the UAE property laws, this legal guide will inform you of your rights and your options while laying out how you can recover your money. 

Understanding Off-Plan Purchases Without an SPA

For off-plan properties, the sale must be registered in the Interim Real Property Register (Oqood) with the Dubai Land Department (DLD) as per the DLD regulations and Law No. 13 of 2008 (as amended by Law No. 19 of 2020).

• Unregistered Transactions are Void: According to Article 3 of Law No. 13 of 2008, any off-plan sales or disposals not registered in the DLD/Oqood system are legally void.
• Pre-SPA Documentation: In the event that you have made an upfront booking fee or down payment, you are probably in one of those situations where your transaction is governed by an Expression of Interest (EOI) or Reservation Agreement, not a binding SPA.
• Unjust Enrichment Principles: The UAE Civil Code (Federal Law No. 5 of 1985 and subsequent amendments) allows for restitution in some cases where a developer has taken payment for a property but has not registered the rights or has failed to enter into a proper contract.

This will reinforce, not undermine, your request for a refund.

Common Reasons for an Off-Plan Refund Claim

Some common reasons why buyers ask for a refund before the signing of the SPA are as follows:

1. SPA Not Issued and Oqood Not Registered: The developer has collected the booking amount, but has not issued the SPA or registered the unit within the Oqood system. 
2. Unilaterally Changing the Terms: The draft of the SPA contains certain new terms that were never mentioned in the initial booking document.
3. Project’s Non-Start/ Cancellation: The project is stopped by the Real Estate Regulatory Agency (RERA) because the developer violates the regulations. 
4. Lack of an Authorized Escrow Account: According to Law No. 8 of 2007, the off-plan money should be deposited in an authorized escrow account. Payment through other channels is not acceptable.

Step-by-Step Guide to Recover Your Money

• Gather all your documents.

Search for your booking agreement, transaction records, bank transfer details, and the developer’s messages. Make sure to note down their respective dates and amounts. All of these will help you reclaim your lost money in an off-plan property without an SPA in the UAE.

• Find out whether the project is registered.

Use the Dubai REST application or website of DLD to find out if the developer and the project are RERA-registered. If it is not, you have more chances to get your refund for the off-plan property.

• Submit your demand letter.

Send a clear demand letter to the developer demanding the return of your total amount within 14 days. Keep evidence that you sent the letter. It should state that there is no SPA and the transaction was not registered. This is your first step for cancellation of an off-plan reservation in Dubai.  

• File a complaint

File your complaint in the Dubai REST application or website using your documents. RERA will force the developer. If the project is cancelled, the Special Tribunal for Unfinished and Cancelled Real Property Projects (Decree No. 33 of 2020) handles the case.

• Negotiate or escalate the case.

Developers usually solve problems after the filing of a complaint. If they don’t, then you need a lawyer. Simple cases are solved in weeks or months. Projects that are unregistered are good for the recovery of your deposit in the UAE.

Common Challenges and Practical Tips

• Developers often say the deposit is non-refundable or that you “changed your mind.” Counter by showing no registered SPA, no escrow protection, or unreasonable delay in issuing the agreement. 
• All communication must be in writing.
• Don’t cut off all contact; this will weaken your position.
• If the money was not deposited in an escrow account, recovery may be more difficult and may require court action for unjust enrichment or breach. Quick action improves outcomes.

How RH & Hale Law Firm Can Help You?

Disputes involving off-plan property purchases are very complicated and require a lot of knowledge of UAE property law, DLD circulars, and court precedents. RH & Hale Law Firm helps property investors with the following assistance:

• Contractual Review: Our property lawyer first reviews booking forms, reservation agreements, and other relevant documents for the developer’s non-compliance with their obligations;
• Pre-Litigation Negotiations: Our team also assists with issuing a legal notice to the developer to execute the refund immediately;
• Representation Before Regulatory Bodies: We represent our clients in disputes before the DLD, RERA, and the Special Tribunal for Cancelled Real Estate Projects and deal with the whole procedure;
• Litigation & Recovery: Representation of buyers in UAE courts for the purpose of obtaining judgments and execution by attaching bank accounts or through escrow.

Contact RH & Hale Law Firm for a clear assessment of your case. Our expert real estate lawyers in Dubai help buyers get back their deposits and payments regarding off-plan properties and cancelled real estate projects based on the latest DLD & RERA guidelines.