10 Common Legal Mistakes Made by Property Buyers in Dubai

Since the issuance of Real Estate Registration Regulation Law No. 13 of 2008 by the Dubai Land Department, the process of purchasing real estate in Dubai, particularly off-plan properties, has become significantly more regulated and structured.

Despite this advanced legal framework, many property buyers continue to make serious legal mistakes that can ultimately result in the loss of a substantial portion, or even the entirety, of their investment.

Following the post-2008 real estate boom, numerous projects were launched across Dubai, accompanied by the entry of many new developers into the market. In practice, most developers draft sale and purchase agreements primarily to protect their own interests, often incorporating complex or ambiguous clauses that buyers do not fully understand at the time of signing.

Based on more than a decade of practical experience representing buyers in real estate disputes before the Dubai Courts, a pattern of recurring mistakes is evident. The most common of these mistakes can be summarised as follows:

1. Signing the Agreement Without Legal Advice

Every sale and purchase agreement contains provisions that may appear harmless but can carry serious legal consequences if the project is delayed or fails altogether. Proceeding without obtaining specialised legal advice is one of the most frequent and costly mistakes made by buyers.

2. Assuming the Contract Is Non-Negotiable

Contrary to popular belief, sale and purchase agreements are not immutable. Buyers have the right to negotiate and request amendments to any clause that may prejudice their rights or disrupt the contractual balance.

3. Failure to Scrutinise the Completion Date

Some developers include multiple completion dates in the same agreement—an “anticipated” date, an “actual” completion date, and an additional extension period. In practice, this structure may allow project delivery to be delayed for years without providing the buyer with effective remedies.

4. Paying an Excessive Amount at an Early Stage

While standard practice involves a down payment of 10% to 20%, some buyers pay more than 70% of the purchase price in the early stages. This is one of the gravest mistakes, as any project suspension or cancellation may leave the buyer facing prolonged and complex recovery proceedings.

5. Accepting an Arbitration Clause Without Understanding Its Impact

Many buyers agree to arbitration clauses without appreciating their implications. Arbitration proceedings are often significantly more expensive than court litigation and may take longer to conclude, imposing additional financial and procedural burdens on the buyer.

6. Neglecting Initial Property Registration

The registration of the buyer’s name in the initial real estate register at the Dubai Land Department is a fundamental legal requirement. Failure to complete this registration may result in the invalidation of the sale and purchase agreement.

7. Suspending Payments Without Court Approval

Some buyers stop making instalment payments when the developer delays handover, believing they are legally entitled to do so. Developers frequently exploit this misconception to terminate the agreement and forfeit the amounts already paid.

8. Overlooking Detailed Technical Specifications

Sale agreements must clearly and precisely specify the unit’s technical and construction standards. Vague or general descriptions may result in the delivery of a property that falls materially short of what was promised.

9. Paying Instalments Without Verifying Project Status

Upon receiving a payment notice, many buyers transfer funds directly to the developer without verifying the project’s actual progress with the Dubai Land Department. This oversight can expose buyers to unnecessary financial risk.

10. Changes to the Property’s Designation

In some cases, buyers purchase hotel apartments only to be later informed that the unit’s designation has been changed to a residential apartment. Contracts should expressly grant the buyer the immediate right to terminate the agreement if the unit’s classification is altered at any stage.

Conclusion

Real estate investment in Dubai remains one of the most attractive opportunities in the region. However, it requires careful legal awareness and due diligence. The developer’s reputation, track record, and the contractual framework governing the transaction are all decisive factors that should never be overlooked.

Dubai Court of Cassation judgments have consistently confirmed the buyer’s right to terminate the contract in cases of unjustified delay in handover, obliging developers to refund all amounts received, together with legal interest and court costs.

A Critical Legal Warning

Special attention should be directed towards the designation of the developer as explicitly outlined in the agreement. Developers often establish multiple limited liability companies with similar names, and the contracting entity may not necessarily correspond to the actual project developer. This approach is commonly utilised to safeguard assets against potential legal claims and can significantly impede enforcement proceedings.

Prepared by Abdelaziz Alhanaee, Founder of Abdelaziz Alhanaee Law Firm. This article reflects the author’s professional experience and does not constitute legal advice.