Real Estate Sale Contract in Dubai: Key Clauses That Could Cost You Thousands of Dirhams If Ignored

Real Estate Sale Contract in Dubai: Key Clauses That Could Cost You Thousands of Dirhams if Ignored

Dubai’s property market is booming, supported by investment incentives and attractive residency policies. Finalising a real estate purchase isn’t just about paying the unit price; it requires a clear understanding of the sale contract’s terms. Contracts often contain provisions that significantly affect your financial and legal obligations, and ignoring them can cost thousands of dirhams. This article explains the most important clauses to focus on when buying property in Dubai, outlines mandatory fees and provides practical tips for property seekers in Dubai.

What Is a Real Estate Sale Contract?

The real estate sale contract, also known as the Sale and Purchase Agreement (SPA), is a legally binding contract between the seller and buyer. It sets out all transaction details—from property description, price and payment schedule to delivery conditions and penalties.
In Dubai, the contract must be registered with the Dubai Land Department (DLD) within 60 days to be valid. Failing to register it can result in a fine of AED 10,000 and leaves the buyer’s rights much weaker.

Dubai Real Estate Laws Guide 2026: Everything Investors Must Know Before Buying (Comprehensive Reference)

Key Clauses of a Real Estate Sale Contract in Dubai

1. Identification of the Parties
   The contract should accurately specify each party’s identity, including full name, passport or ID number, nationality and contact information. When buying from a developer, make sure the signer is officially authorised and request a power of attorney if necessary.
2. Property Description
   The contract must contain an accurate description of the property—such as plot number, location, interior area, floor number, unit view and parking space. For off‑plan projects, architectural plans and finishing specifications should be attached. This clause protects the buyer from discrepancies between agreed terms and actual delivery.
3. Price and Payment Schedule
   The contract states the total property price and payment schedule, including the deposit (usually 10 % or 20 % of the property’s value). The schedule may depend on construction progress or specific dates. Buyers must watch for additional fees like the DLD registration fee (4 % of the property value), commissions and maintenance expenses.
4. Completion and Handover Dates
   Contracts specify the expected completion date and handover date. Most agreements give the developer a grace period for delays due to unforeseen circumstances. If the developer exceeds this period, the buyer may be entitled to a refund or compensation.
5. Preconditions and the No Objection Certificate (NOC)
   The contract becomes effective only after certain preconditions are met—such as obtaining an NOC from the developer, securing bank approval for the mortgage and registering the transaction with the DLD. Ignoring these conditions delays ownership transfer and incurs penalties.
6. Breach and Termination Clauses
   These clauses cover what happens if either party fails to meet their obligations. If the buyer defaults on payments, the developer may keep part of the amounts paid as specified in the contract. If the developer doesn’t fulfil its commitments (such as delivering on time), the buyer may cancel the contract and recover payments. Modern contracts often provide for arbitration or Dubai courts to resolve disputes.
7. Registration and the Oqood System
   After signing, the contract must be registered with the DLD. For off‑plan properties, registration happens through the Oqood system, in which the buyer gets a temporary Oqood certificate that secures their rights until the title deed is issued. Registration requires submitting a copy of the contract, passport copy, payment receipts, the NOC and paying the registration fees.
8. Standard RERA Forms
   The Real Estate Regulatory Agency (RERA) mandates certain forms for each stage of the transaction. Key forms include:

Using the wrong form or neglecting these documents can lead to legal troubles or extra fees.

Fees and Costs That Could Cost You Thousands of Dirhams

Many buyers focus on the property price and ignore associated fees, causing budget overruns. Below are the main mandatory fees when buying property in Dubai:

Note: Failing to account for these fees can create cash‑flow problems and may prevent you from completing the transaction. Always check the latest fees with the DLD or use a licensed real estate broker.

Risks and Penalties When Clauses Are Ignored

• Fines for non‑registration: According to Law No. 7 of 2006 on property registration, sale contracts must be registered with the DLD within 60 days. Non‑registration results in a AED 10,000 fine and makes the contract a personal agreement rather than an ownership transfer.
• Loss of deposit: If a buyer fails to pay or withdraws without a legal reason, the developer or seller can keep part or all of the deposit depending on the project stage. In secondary market deals, a 10 % deposit is usually held by the broker and may be forfeited if the buyer breaches the agreement.
• Penalties on the developer: If the developer delays the project or violates specifications, the buyer may cancel the contract and get a refund or claim compensation. In off‑plan projects, Law No. 19 of 2017 lets the developer retain a percentage of the contract value based on completion: up to 100 % if completion exceeds 80 %, or 25 % if it is below 60 %.
• Absence of an escrow account: The escrow law requires all buyer payments to be deposited in an independent escrow account, which the developer may only access according to construction progress. Not confirming that such an account exists puts your money at risk of mismanagement.

Tips to Avoid Losses and Common Mistakes

1. Check the developer and project record: Confirm that the project and developer are registered with the DLD and RERA. You can verify project status via the Dubai REST app.
2. Use an approved escrow account: Don’t transfer funds to personal accounts; all payments should go through the project’s escrow account to protect your investment.
3. Consult a legal expert: A specialised lawyer can identify ambiguous or unfair clauses and ensure compliance with RERA regulations.
4. Budget accurately: Include all the above fees in your financing plan, including insurance, government fees, deposits and commissions.
5. Obtain the NOC early: Clear any mortgages or outstanding service fees and get the NOC from the developer or community manager before registering the transaction.
6. Register the contract promptly: Register your contract with the DLD within the required timeframe to avoid fines and protect your rights.

Conclusion 

Understanding the terms of a real estate sale contract in Dubai is essential to protecting your investment and avoiding unexpected costs. Before signing, read the contract carefully and consult a licensed lawyer or real estate specialist to ensure the clauses and fees are clear. If you plan to buy property or seek a safe investment in Dubai, the BLOOM LUXURY SIGNATURE team is ready to guide you through every stage—from selecting the right property and reviewing contracts to completing registration and handover—providing transparency and professionalism throughout. We offer a secure investment experience based on deep knowledge of Dubai’s real estate laws and regulations, with tailored advice to maximise returns while minimising risk. Contact us today and let our expertise be your gateway to a successful, stable investment in Dubai’s property market.