Real estate
Recovering your investment from a cancelled Dubai real estate project
What happens when an off-plan project is cancelled in Dubai, and the steps investors should take to protect their claim.
Off-plan investment carries the risk that a project is delayed or cancelled. Dubai has a regulatory framework designed to protect investors when that happens.
The framework
The Real Estate Regulatory Agency, part of the Dubai Land Department, oversees off-plan projects. Dubai Law No. 13 of 2008 on the interim real estate register, as amended, and Dubai Law No. 8 of 2007 on escrow accounts, together with their implementing resolutions, govern registration, escrow and the treatment of cancelled projects.
How recovery usually works
- Cancellation: where a developer fails to meet its obligations, the regulator may investigate and cancel the project.
- Liquidation: a committee may be formed to manage the project's liquidation and the funds held in escrow.
- Claims: investors submit their claims with the sale and purchase agreement, receipts and supporting documents.
- Verification and distribution: verified claims are settled from the available funds in accordance with the applicable rules.
Practical points
- Act promptly once a cancellation is announced. Late claims can complicate recovery.
- Keep every receipt, statement and piece of correspondence with the developer.
- Where many investors are affected, a coordinated approach may help.
- Consider whether a claim against the developer before the courts is also available.
The procedure depends on the project, the stage of cancellation and the regulator's decisions. Seek advice on your particular documents. General information only, not legal advice.
