Off-Plan Sale and Developer Obligations
The federal sale provisions under Federal Decree-Law No. 25 of 2025, and how they meet the emirate regimes

Off-plan sale in the UAE is governed at two levels that have to be read together. The emirate supplies the registration, escrow and cancellation machinery — Dubai through Law No. 13 of 2008 and Law No. 8 of 2007, Abu Dhabi through Law No. 3 of 2015. The federal civil law supplies the contract: what makes the sale valid, when ownership passes, what the seller warrants, and what the buyer can recover. On 1 June 2026 that federal layer was replaced in its entirety by Federal Decree-Law No. 25 of 2025.

This note works through the sale provisions that bear on off-plan purchases under the new Law, identifies the three that most often decide disputes, and explains how they interact with the emirate regimes rather than displacing them.

1. Two layers, and which one answers which question

The division of labour is stable and worth stating plainly, because arguments are frequently run at the wrong level.

Nothing in the new federal Law disturbs the emirate regimes. The point of the table is the opposite: a buyer who frames every complaint as a RERA matter gives up the contractual remedies, and a buyer who ignores the emirate machinery loses the registration and escrow protections that make those remedies worth having.

2. Validity: the buyer must know what is being sold (Article 446)

Article 445 defines sale as a contract by which the seller undertakes to transfer ownership of a thing, or another financial right, for a price in money. Article 446 then imposes the requirement that does most of the work in off-plan disputes:

In a completed-property sale that requirement is nearly always satisfied by inspection. In an off-plan sale there is nothing to inspect, so the contractual description carries the entire burden. Everything that identifies the unit — floor, orientation, net and gross area, the specification schedule, the site plan, the finishes — is not marketing material. It is what makes the contract satisfy Article 446.

Practical consequences:

• For buyers. A sale agreement that describes the unit only by a plot and a number, with specification left to the developer's discretion, is weaker than it looks. Area tolerance clauses, "or equivalent" specification substitution and unilateral layout variation all erode the description that Article 446 requires, and they should be negotiated rather than accepted as standard.
• For developers. The schedule is a legal document. A generous substitution right bought at the price of an indefinite description is a poor trade, because it exposes the contract itself rather than merely creating a snagging argument.

Article 446 gives annulment, not damages. It is a heavy remedy and buyers will usually prefer to sue on the contract. But its existence conditions the negotiation, and it is the answer to a developer who argues that the specification was never binding.

3. When ownership passes: Article 466 and the registration override

Article 466(1) states the federal default: ownership of the thing sold passes to the purchaser as soon as the sale is concluded, unless the law or an agreement provides otherwise.

For off-plan property both exceptions are engaged at once. The emirate registration statutes are "the law", and they condition the transfer of real rights on registration; the sale agreement is "an agreement", and it ordinarily defers transfer to completion and handover. So the Article 466 default rarely governs an off-plan sale on its own terms.

What it does supply is the framework for the intermediate position. Between contract and registration the buyer holds contractual rights plus whatever the interim register confers. That is why the registration step is not an administrative formality:

• Registration in the interim register is what converts a personal claim against a developer into a position good against third parties.
• Article 466(2) requires each party to take the initiative to perform its obligations except those deferred — which includes the buyer's obligation to do what is needed to register.
• Article 466(3) binds the seller to do everything necessary to transfer the right. A developer who does not progress registration is in breach of the sale, not merely out of step with the regulator.

4. The warranties, and one that cannot be excluded (Article 489)

The sale chapter carries the ordinary warranties of a civil-law sale: against defects, and against dispossession. The second is the one with teeth in off-plan work, because it deals with title rather than quality.

Article 489 provides that the parties may increase the warranty against dispossession, and then:

Article 489(3) adds that the purchaser's knowledge that the thing sold was not the seller's property does not prevent recourse for the price. The combination matters where a developer sells units on land it does not yet own outright, or where the plot is encumbered: the buyer's knowledge of the position does not forfeit the claim, and a contractual acknowledgement to the contrary does not survive Article 489(2).

Article 491 deals with the case where the title claim emerges after the property has perished in the buyer's hands — the buyer guarantees its value at the date of purchase to the claimant and recovers the price from the seller, with an uplift where the value guaranteed exceeds the named price.

Practical reading: a disclosure clause in which the buyer acknowledges the state of title and waives recourse is, as to the price, ineffective. Developers should not rely on it; buyers should not be deterred by it.

4. The new duty: pre-contractual good faith and disclosure (Articles 121–122)

This is the most consequential change in the new Law for off-plan sale, and it has no equivalent in the 1985 Code. The UAE has codified a duty of good faith in negotiation, and a duty to disclose.

Article 121 requires that the proposal of pre-contractual negotiations, their conduct and their termination all accord with the requirements of good faith. Two limits are built in: negotiating creates no obligation to conclude (121(2)), and a party who negotiates or breaks off in bad faith is liable for actual damage only — compensation expressly excludes expected interests from the unconcluded contract and lost opportunities (121(3)).

Article 122 is the disclosure duty:

Both conditions are ordinarily satisfied in an off-plan sale. The buyer's ignorance of the project's internal position is presumed — there is nothing to inspect and no public project file — and the buyer is placing trust in the developer by paying before delivery.

What this reaches

Matters with a direct and necessary connection to the content of an off-plan contract include the status of the land and any encumbrance, whether the project approvals and escrow account are in place, known programme risk at the time of sale, infrastructure that is assumed but not yet committed, and the service-charge model the buyer will inherit. A developer who holds that information and does not disclose it is exposed under Article 122.

And it compounds with misrepresentation

Article 171 provides that deliberate silence about a fact or circumstance is misrepresentation where it is proven the deceived party would not have contracted had they known. Article 172 then allows annulment where misrepresentation is coupled with gross lesion — which Article 173 defines as an imbalance falling outside the range of valuation by experts, as opposed to slight lesion within it.

So non-disclosure now runs on two tracks. Article 122 gives a freestanding duty sounding in damages; Articles 171 to 173 give annulment where the silence was deliberate and the bargain is outside the expert range. The second is harder and the remedy is heavier.

Article 179: exploitation

Separately, where one party exploits another's urgent need, obvious recklessness, unbridled passion, lack of experience, apparent weakness, or a moral influence, and the contract involves an exorbitant disproportion between obligations and benefit at the time of conclusion, the aggrieved party may seek annulment or reduction of their obligations. The reduction remedy is the practically useful one, because it does not require unwinding a registered sale.

Article 221(3): the clause that beats the printed form

Article 221(1) carries the good-faith duty into performance. Article 221(3) is the one to remember when reading a developer's standard contract: in contracts drafted on templates to unify the regulation of contractual relations, terms added to the template prevail over the original terms even if the original terms are not struck out, unless the law provides otherwise. A side letter or a typed-in special condition therefore governs over the inconsistent printed clause, without needing the printed clause deleted.

6. The Salam analogue: Articles 522 and 523

The new Law retains Salam — a sale of a thing for deferred delivery against a price paid in advance (Article 522). It is not the legal form of a modern off-plan sale, which is a sale of a specified immovable governed by the emirate statutes, but it is the Sharia-derived template from which the civil law's treatment of forward sales descends, and Article 523 is instructive about what the tradition regards as the minimum safeguards.

Article 523 requires, among other conditions, that the subject matter be capable of determination by description and quantity, that it be of a kind usually available at the time of delivery, and that the contract state the genus, type, quality and quantity.

The resemblance to Article 446 is not accidental. Both insist that where the buyer pays before there is anything to inspect, specification does the work that inspection would otherwise do. That is the doctrinal reason why loose off-plan descriptions are vulnerable in UAE courts, and why an argument framed around the adequacy of the description tends to travel better than one framed around disappointed expectations.

7. Remedies: damages, agreed compensation and time

Damages

Breach by a developer — delay, non-delivery, specification shortfall, failure to register — sounds in damages under Book One of the Law. The claim must establish breach, loss and causation; a buyer claiming lost rental income has to show the loss was actually suffered and causally connected to the breach, not merely that the market moved.

Agreed compensation: Article 340

Where the contract fixes compensation, Article 340 replaces the old Article 390. The court may reduce the agreed figure where the debtor proves the assessment was exaggerated or the obligation was partly performed — and, under Article 340(3), where the creditor's own fault contributed to the harm.

Off-plan contracts commonly fix the developer's delay compensation and the buyer's default interest in the same document. Article 340 applies to both. A buyer relying on a generous delay formula should expect the developer to run Article 340(2); a developer deducting against a buyer should expect Article 340(3) where its own conduct contributed.

Time

• Article 258 — an action for reparation arising from a harmful act is not heard after three years from the day the victim knew of the harm and of the person responsible, with a fifteen-year long-stop from the harmful act.
• Article 7 — where the new Law sets a shorter period than the old, the new period runs from 1 June 2026 even if the old had started; but a shorter remaining balance of the old period governs instead. Every off-plan claim already running on that date needs both calculations.
• Article 4(1) — non-retroactivity. A 2021 purchase and a 2023 default remain a 1985 Code matter on the substance.

8. Checklists

Buyer, before signing

• Test the description against Article 446: could a stranger identify this unit and its specification from the contract alone?
• Price the area tolerance and specification substitution clauses. They are the clauses that convert a defined thing into an indefinite one.
• Confirm the escrow account and that payments are routed to it, and confirm interim registration is contracted for with a deadline, not left to the developer's convenience.
• Read the delay compensation clause both ways: Article 340 lets a court reduce it, so a headline figure is not a guaranteed recovery.
• Do not be deterred by a title acknowledgement clause; Article 489(2) voids a waiver or limitation of the dispossession warranty.
• Ask, in writing, the questions Article 122 obliges the developer to answer: title and encumbrances, approvals, escrow, known programme risk, committed infrastructure, the service-charge model. A written question makes later silence deliberate.
• Any special condition you negotiate prevails over the inconsistent printed clause under Article 221(3), even if the printed clause is not struck out — but get it in writing.

Developer, reviewing templates

• Update federal citations to FDL 25/2025. A contract citing Federal Law 5/1985 is citing a repealed statute.
• Do not rely on a buyer's waiver of the dispossession warranty; draft the title position so it does not need one.
• Treat the specification schedule as a validity document, and keep substitution rights narrow and objectively defined.
• Make the registration obligation and its timing explicit; Article 466(3) imposes it regardless.
• Build a disclosure step into the sales process and record it. Article 122 is a duty to inform, and the file is the defence.

Live disputes

• Date the facts before choosing the article numbers: pre-1 June 2026 events plead under the 1985 Code.
• Run the Article 7 limitation calculation on both bases and take the earlier date.
• Separate the emirate remedy from the contractual one and pursue both where they are available; cancellation machinery and damages answer different questions.

Primary sources

Every provision quoted above is taken from the instruments below. Links go to the official consolidated text, not to secondary commentary.

• Federal Decree-Law No. 25 of 2025 issuing the Civil Transactions Law — Arts 445–465 validity of sale, 466 passing of ownership, 489 dispossession warranty, 522–523 Salam, 340 agreed compensation
• UAE Ministry of Justice — laws and legislation — consolidated Arabic text, which governs over any English rendering
• Dubai Land Department — Law 13/2008 (interim register), Law 8/2007 (escrow), Decree 6/2010 (cancellation)
• Abu Dhabi Department of Municipalities and Transport — real estate — Abu Dhabi Law No. 3 of 2015 regulating the real estate sector

Questions we are asked

Related guides in the library

• Off-Plan Property Disputes in Dubai
• Construction and Decennial Liability Under the New UAE Civil Code
• ADGM Off-Plan Buyer Guide

Published 2026-10-03. General information only — not legal advice. Contact us for matter-specific advice.