Can UAE Buyers Get Refunds for Cancelled Real Estate Projects?

So, you’ve invested in a property in the UAE, and the project has been cancelled, and you’re wondering Can I get my money back? It’s a fair question, and the answer is Yes, but it depends. 

In the UAE, especially in Dubai and Abu Dhabi, the real estate market has seen rapid growth. But not all projects are completed. Economic shifts, funding issues, or regulatory challenges can lead to project cancellations. When this happens, buyers worry about getting their money back. 

Fortunately, Federal and Emirate-level laws provide a clear framework for property refund claims. In Dubai Law 13 of 2008 (as amended by Law 19 of 2020) and Law 8 of 2007 govern refund obligations, while Decree No. 33 of 2020 establishes the “Special Tribunal for Liquidation of Cancelled Real Property Projects” and enforces developers’ obligations to repay buyers. Buyers across all emirates have property refund rights UAE, which guarantees recovery of installments—and in some cases, interest or compensation—when off-plan projects are cancelled, ensuring more transparency and accountability in a market built on trust. 

 

1. Why Off‑Plan Projects Get Cancelled—and What ‘Cancellation’ Means

Off‑plan developments promise early‑bird pricing and staged payments, but projects may face cancellation due to: 

• Financial strains—budget overruns or liquidity issues. 

• Regulatory non‑compliance—failure to secure permits or meet RERA standards. 

• Market downturns—sharp drops in demand or prices. 

• Developer insolvency—bankruptcy or fraud. 

In Dubai, once RERA issues a final, grounded decision to terminate a project—often after assessing construction progress and developer solvency—the project is officially marked ‘cancelled’ and handed to the Special Tribunal for liquidation. Projects designated ‘under cancellation’ are those still under RERA review; only after a final RERA ruling do buyers have the right to ask for refunds. 

2. Legal Framework Governing Refunds in Dubai

Several laws and decrees govern the refund process for cancelled real estate projects in Dubai: 

2.1 Decree No. 33 of 2020 

Decree 33/2020 restructured the former liquidation committee into the Special Tribunal for Liquidation of Cancelled Real Property Projects in Dubai and Settlement of Related Rights, granting it sole authority over final cancellation decisions and ensuring that no other court—including DIFC Courts—can hear appeals or disputes on these matters. 

2.2 Dubai Law No. 13 of 2008 (Amended by Law No. 19 of 2020) 

Law 13/2008, as amended, details developers’ refund obligations: 

• Article 11 sets out scenarios based on completion levels (over/under 60% of works) and allowable deductions. 

• When a project is cancelled by RERA, developers must refund all amounts paid by purchasers within specified timelines, subject to limited deductions if partial work is done. 

2.3 Law No. 8 of 2007 

This law mandates the creation of Guarantee Accounts—escrow accounts managed by DLD‑authorised financial institutions—into which developers deposit all payments. If a project is cancelled, refunds are drawn from these protected funds, prioritising buyers’ interests under Article 15. 

2.4 Decree No. 21 of 2013 

Originally set up by the liquidation committee for unfinished and cancelled projects, it was later amended by Decree 33/2020 to form today’s Special Tribunal. 

3. Refund Scenarios Based on Project Completion

Article 11 of Dubai Law No. 13 of 2008, as amended, outlines refund obligations under various circumstances: 

Completion between 60% and 80%: 

• The developer may rescind the off-plan sale contract at their discretion. 

• They can deduct no more than 40% of the unit’s value as specified in the sale contract. 

• The remaining amount must be refunded to the purchaser within one year from the contract rescission date or within 60 days of reselling the unit, whichever occurs first. 

Completion less than 60%: 

• The developer may rescind the contract at their discretion. 

• The deduction is capped at 25% of the unit’s value in the sale contract. 

• The balance must be refunded to the purchaser within one year from the contract rescission date or within 60 days of reselling the unit, whichever occurs first. 

No work commenced or project cancelled: 

• If the developer has not commenced work on the project for reasons beyond their control and without negligence, or if the project is cancelled by a final decision issued by RERA, they must return all amounts received from purchasers. 

• Refunds must be processed in accordance with the procedures and provisions of Law No. 8 of 2007. 

• Article 15 of Dubai Law No. 8 of 2007 prioritizes refunding purchasers using funds in the guarantee account, managed by a DLD-authorized financial institution. 

In all cases, buyers may also claim interest on late payments and, in rare instances, compensation for proven damages—subject to tribunal discretion. 

 4. Step‑by‑Step Guide to Claiming Your Refund

Before filing for a refund, the first thing to do is to check the Dubai Land Department (DLD) website or visit their office to verify if the project is officially cancelled. If cancellation is confirmed, then 

4.1 Gather Essential Documents 

• Sale and Purchase Agreement (SPA) 

• Payment Proofs (bank statements, cheques) 

• RERA Cancellation Notice 

• Correspondence with developer (emails, letters) 

4.2 File Your Claim 

• Dubai: Submit a grievance to the Special Tribunal for Liquidation via Dubai Courts. 

• Other Emirates: Apply through local courts with similar documentation. 

4.3 Tribunal Review Process 

• RERA Report: Tribunal examines a detailed technical report on project status, reasons for cancellation, and financial audits commissioned by RERA. 

• Developer’s Response: Developers can present completion plans or contest findings. 

4. Final Decision and Enforcement 

• If cancellation is upheld, the tribunal issues an enforceable order for the developer (or escrow trustee) to refund buyers. 

• Dubai Courts’ Department of Execution ensures timely payment—usually within 90–180 days post‑decision, (Khaleej Times). 

5. Documents and Evidence You’ll Need

To speed up your claim, prepare: 

• A certified copy of your Ejari or tenancy contract (for rental or sub‑lease cases). 

• Escrow account statements showing credited amounts. 

• Technical or progress reports (if available) proving project delay or stoppage. 

Power of Attorney (if someone else files on your behalf).

6. Beyond Dubai: Other Emirates’ Procedures

While Dubai uses a dedicated tribunal, other emirates follow civil court channels: 

• Abu Dhabi: Claims handled by the Abu Dhabi Judicial Department. 

• Sharjah, Ajman, Ras Al Khaimah: Local courts adjudicate based on similar refund laws. 

Regardless of location, a final RERA cancellation decision remains the trigger to ask for refunds when a project is cancelled. 

7. Practical Tips to Safeguard Your Investment

1. Verify Escrow Compliance: Always confirm your developer uses a RERA‑mandated guarantee account before signing. 

1. Check Project Progress: Visit construction sites or use RERA’s online dashboard for real‑time updates. 

1. Read Your SPA Carefully: Ensure clear clauses on refunds, deductions, and timelines. 

1. Keep Detailed Records: Save every receipt, contract addendum, and email exchange. 

1. Seek Early Advice: If delays exceed contract deadlines, contact RERA or a qualified lawyer before formal cancellation. 

Frequently Asked Questions (FAQs) 

Q1: Can I get a full refund if my off‑plan project is cancelled?
A1: Yes. For projects with no work commenced or fully cancelled by RERA, developers must refund 100% of all payments under Article 11 of Law 13/2008, as amended. 

Q2: How long does the tribunal process take?
A2: Typically 30–60 days to issue a hearing date, and refunds usually clear within 90–180 days after a final order. 

Q3: What if my project is only delayed, not cancelled?
A3: Delays alone do not automatically trigger refunds. You may negotiate compensation or contract termination under separate RERA handover delay provisions. 

Q4: Do buyers outside Dubai have the same rights?
A4: Yes—federal laws cover all emirates—but claims proceed through local courts rather than a specialized tribunal. 

Q5: Can developers deduct penalties from my refund?
A5: Only as permitted by Law 13/2008: up to 40% if over 60% complete, or 25% if under 60% complete. No deductions apply for projects with no work. 

Q6: What if a developer goes bankrupt?
A6: Your refund claim becomes part of the bankruptcy proceedings. You file as a creditor, which may extend the timeline. 

Q7. Can I sue the developer for delays? 

Yes. Under Dubai Law No. 13/2008, you can claim compensation or cancel the contract if delays are unreasonable. 

Q8. Are there penalties for cancelling as a buyer? 

If you cancel the contract without valid reasons, developers may deduct up to 40% of the unit’s value. 

Q9. What if the project is only “under cancellation? 

RERA is still reviewing the case. Stay in touch with the developer and monitor updates from the DLD.