Developer registration and project registration are two different gates
Before a scheme can be sold, two separate approvals have to exist. The developing entity must be registered as a developer with the emirate's real estate regulator, and the specific project must be registered in its own right. Developers with an existing licence routinely assume the second follows the first. It does not, and the consequence of getting it wrong is that sales made ahead of project registration are exposed, marketing material is unlawful, and the regulator has grounds to intervene at exactly the moment the launch budget has been spent.
The two emirates run distinct systems. In Dubai, developer registration and project registration sit with the Dubai Land Department and the Real Estate Regulatory Agency, with the escrow regime built on Dubai Law No. 8 of 2007 concerning real estate development trust accounts and the interim register established by Dubai Law No. 13 of 2008. In Abu Dhabi, the framework is that of Abu Dhabi Law No. 3 of 2015, as amended by Law No. 2 of 2025 (in force 2 August 2025), regulating the real estate sector, administered through the emirate's real estate authority under the Department of Municipalities and Transport, with its own developer register, project registration and escrow requirements. The concepts rhyme; the forms, thresholds, documentary requirements and supervisory practice do not. A Dubai-experienced team running an Abu Dhabi scheme on Dubai assumptions loses time it did not budget for.
Registration is also where the regulator first sees the scheme's financial architecture — land ownership, funding sources, contractor appointment, programme and evidence that the developer can complete. Weak answers here tend to produce conditions attached to registration that constrain the project for its whole life.
Abu Dhabi has also widened what requires a licence. Law No. 2 of 2025 broadened the range of regulated real estate activities to include surveying, valuation, registration, brokerage, property management and operations, each of which requires licensing, with enhanced oversight by the Department of Municipalities and Transport. The effect is felt in the developer's own service panel: the valuer supporting the funding case, the brokerage selling the units, the surveyor and the company that will manage the completed building each need to be checked for licensing before appointment, with an obligation to maintain it written into the engagement.
Disclosure has also moved forward in the sale process. Administrative Decision No. 25 of 2025 — issued by the Chairman of the Department of Municipalities and Transport on 24 November 2025 under Law No. 3 of 2015 as amended, and in force from 28 February 2026 — requires mandatory disclosure statements to be given to a purchaser before purchase. That is a controlled document rather than a sales aid: drafted once, verified against the project record and the community instruments, and issued centrally, because a statement improvised by a sales team becomes a representation the developer is held to.
The plot decides the scheme — title, tenure and usage restrictions
Land in the UAE comes to developers in several forms and they are not interchangeable. Freehold title in a designated investment area is one position. A long musataha right — a right to build on and exploit land owned by another for a defined term, recognised under the Civil Code and used extensively by government entities and master developers — is another, and it carries a reversion, term-end consequences for the buildings, and usually restrictions on disposal and mortgage. Usufruct and lease-based structures sit differently again. Land granted by a government entity frequently carries development conditions, timelines and transfer restrictions on the face of the grant.
What can be built is determined outside the sale documents. The affection plan or equivalent site plan, the master plan and the applicable planning controls fix permitted use, plot ratio, built-up area, height, setbacks and parking. Servitudes, utility corridors, cooling routes and access easements sit over the plot and can materially reduce the developable footprint. Inside a master community, the registered declaration adds design controls and reserved developer powers on top.
The diligence question is therefore not whether the seller can pass good title, but whether the title as constrained supports the feasibility on which the price was set. Encumbrances, existing mortgages, unpaid infrastructure or service charges attaching to the plot, and any development obligation carried by a previous owner should be resolved before completion rather than discovered during design.
Master-developer consents and the obligations that flow down
A sub-developer buying a plot inside a master community acquires a constrained right to develop, not a free one. The plot sale agreement and the community instruments together impose a package of obligations that flow down from the master developer, and these are the provisions that determine programme risk.
Four recur and deserve disproportionate attention at negotiation. Design approval — the master developer approves concept, schematic and detailed design against community design guidelines. Where the clause gives unbounded discretion with no response deadline, the sub-developer's programme is hostage to another party's internal process. Approval criteria, fixed response periods, deemed-approval provisions and an escalation route are worth more than a price concession. Infrastructure and connection obligations — who builds the roads, drainage, substations and cooling connections to the plot boundary, by when, and what the sub-developer must build inside it. Capacity commitments, particularly for district cooling, which are frequently committed at community level and passed down in volumes the eventual scheme does not need. Development covenants — commencement and completion deadlines, build-out obligations, security or bonds, and step-in or buy-back rights if the sub-developer fails to deliver.
The corresponding obligation runs the other way. The sub-developer is normally required to impose equivalent covenants on its own purchasers and to procure that the building's owners association assumes the community charge liability. Where that flow-down is drafted loosely, the sub-developer keeps an obligation it can no longer perform because it no longer owns anything.
Joint development — profit share, plot share, and what each really allocates
Landowner-and-developer joint ventures are the most common structure where the land is held by a family, an investor or a government-linked entity that does not wish to sell outright. The commercial negotiation usually reduces to one question: does the landowner take a share of profit, or a share of the built product? The two look similar in a term sheet and behave entirely differently once the scheme is under stress.
A profit share makes the landowner an economic participant in the whole scheme. It requires an agreed definition of development cost, a mechanism for approving budget increases, audit rights, and clarity on whether land is contributed at book value, market value or an agreed notional value. Disputes are almost always about cost definition rather than the percentage. A plot or unit share gives the landowner identified plots or units instead of cash. It insulates the landowner from overruns but transfers absorption and timing risk, and requires the allocation and its specification to be fixed early, because which units the landowner takes is worth as much as the percentage.
Structural questions follow: whether the land is transferred into a special purpose vehicle or stays with the landowner under a development agreement; whether the developer takes a musataha instead of title; how the funder takes security if the borrower does not own the land; and which party is the registered developer. That last point is frequently left unresolved and it determines who carries escrow, registration and purchaser-facing liability.
| Feature | Profit share | Plot or unit share |
|---|---|---|
| Landowner's return | Percentage of net development profit after agreed cost | Identified plots or completed units, allocated at the outset |
| Cost-overrun risk | Shared — the landowner's return absorbs overrun | Developer's alone — the landowner's entitlement is fixed in kind |
| Sales and absorption risk | Shared — the return depends on realised prices | Landowner carries its own units; sells or holds on its own account |
| Main source of dispute | Definition of development cost, budget approvals, audit rights | Which units, what specification, and when they are delivered |
| Funding and security | Simpler for a lender where land sits in the project SPV | Lender must accommodate units carved out of the security pool |
| Typical fit | Landowner willing to take scheme risk for a higher return | Landowner seeking a defined, ring-fenced outcome |
Permits, approvals and the delivery obligations that bite
Permitting runs on a sequence, and the sequence is jurisdictional. Concept and masterplan approval, the building permit, and the authority no-objection certificates for civil defence, utilities, drainage, roads and telecommunications are issued by different bodies with different lead times. In Dubai the relevant municipality or free zone authority issues the building permit; Abu Dhabi runs through its own municipal and authority structure. Where a scheme sits inside a free zone or special development area, the zone authority may be the permitting body instead of the municipality, and its requirements are not identical.
The development agreement is where these approvals become contractual obligations. The clauses that bite tie obligations to dates the developer does not fully control: commencement by a fixed date, completion by a fixed date, minimum specification, achievement of a defined completion certificate, and the consequences if any of these slip. Well-drafted agreements distinguish developer delay from landowner, master-developer and authority-processing delay, and provide an extension mechanism for the latter. Poorly drafted ones make the developer an insurer of the authority's turnaround times.
Also worth close reading is the definition of completion itself. A scheme can be practically complete, certified complete, and legally capable of unit transfer at three different moments. Payment triggers, landowner entitlements, escrow releases and purchaser handover obligations should each be tied to the correct one, and frequently are not.
Escrow, project funding and the conditions on drawdown
Off-plan sale proceeds do not belong to the developer when they are received. They go into a registered project trust account and are released against certified construction progress. That is a funding constraint before it is anything else: a scheme cannot be capitalised out of early sales, and the gap between expenditure and permitted release has to be filled by equity, land value or debt. Developers who model the escrow account as working capital run out of money at exactly the point construction accelerates.
Drawdown is conditional and the conditions stack. The escrow bank requires certification of progress; the regulator requires the project to remain in good standing; a construction lender adds conditions precedent — technical adviser sign-off, insurance evidence, contractor performance security, absence of default. Any one can hold a release. The practical failure is not that a condition is unsatisfiable, but that nobody owned the task of satisfying it, and certification arrives four weeks after the contractor's payment fell due.
Abu Dhabi constrains the account further than Dubai does. Under Law No. 3 of 2015, as amended by Law No. 2 of 2025 (in force 2 August 2025), escrow funds may not be applied to land acquisition or to broker fees, and no drawdown is available until at least 20 per cent of the project is complete. Two of the costs a developer most wants early sales to carry — the land and the sales commission — must be funded from equity, land value or debt, and the first fifth of the build is funded entirely outside the account. A feasibility that assumed release from the first certified milestone understates the Abu Dhabi equity requirement by enough to change whether the scheme is fundable at the assumed gearing. This is the Abu Dhabi position; the Dubai drawdown regime is unchanged by the amendment, and a Dubai funding model should not be assumed to transfer.
Retention is the other structural feature. A portion of escrow funds is held back beyond completion against post-completion obligations and released only on satisfaction of the regulator's requirements. Model it as trapped cash from the outset. For the purchaser-facing mechanics of escrow, the interim register and cancellation, see our off-plan and escrow page — this section addresses the same account from the developer's funding side.
Phasing, the stalled phase, and selling a part-built scheme
Phasing is a funding and risk decision presented as a construction decision. Splitting a scheme into registered phases limits the amount of committed build carried at any one time and allows pricing to follow demand. It also multiplies the compliance load: each phase may need its own registration and its own trust account, and each phase's escrow is ring-fenced from the others. Money cannot be moved from a well-selling phase to rescue a slow one, which is precisely what a developer under pressure will want to do.
A stalled phase is the hardest problem in this practice area. The purchasers in that phase have paid into an account that is depleting; the master developer has build-out covenants that are not being met; the lender has a default; and the regulator has intervention powers including, in the extreme, cancellation and liquidation of the project with distribution to purchasers. Restructuring before that point is almost always better than after it. The workable options — rescheduling with purchaser consent, substituting units in a completed phase, bringing in a replacement developer, or a negotiated variation of the master-developer covenants — all require the developer to still be in a position to negotiate. They are not available once the regulator has moved.
Exiting a part-built scheme is possible but rarely clean. A share sale of the project SPV keeps contracts and registrations intact but transfers every historic liability, including purchaser claims and regulatory non-compliance. An asset sale requires consents from the master developer, the regulator, the escrow bank, the lender and — depending on the documents — the purchasers. Novation of the development agreement, the construction contract and the sale contracts each has its own consent requirement. The realistic timetable is set by whichever consent is slowest, and buyers price that uncertainty.
Handover, common areas and the obligations that survive completion
Completion does not end the developer's exposure; it changes its shape. Three transfers have to happen and they are frequently incomplete. Units transfer to purchasers on the register. Common areas transfer to, or come under the control of, the owners association — and this is where schemes most often leave loose ends, because those areas are shown on the plan but never separately titled, or remain registered in the developer's name years after handover. Anyone accepting handover should audit the register plot by plot against the schedule of common areas. Third, the governance documents, budgets, reserve fund contribution and warranty assignments have to be delivered in a state the association can actually use.
Abu Dhabi now attaches a date to the management appointment. Administrative Decision No. 25 of 2025, in force from 28 February 2026, requires the management company to be accredited by the Department of Municipalities and Transport and to be appointed within 30 days of delivery of the first unit. Both limbs matter, and they compound: accreditation is a precondition, so a developer that begins looking for a manager after the first purchaser has taken keys may find its preferred candidate cannot be appointed at all inside the window. The decision also requires annual budget approval, insurance of the common areas, and detailed financial records subject to audit — obligations that presuppose a manager already in post. The appointment is therefore a delivery obligation to be programmed alongside the certificate and the first handover, not an administrative step taken once the building is occupied. Because the 30-day clock runs from an event the developer itself controls, missing it is difficult to explain.
Who forms the ownership association has also changed in Abu Dhabi. Under Law No. 2 of 2025 the developer is no longer the sole authority for forming the association, and the Owners' Union concept is replaced by an Owners' Committee. A handover plan built on the assumption that the developer constitutes the body, appoints it, and releases control on its own timetable should be re-read against the amended law before it is relied on — particularly where the developer retains unsold units and expected its retained voting weight to work in a structure that no longer exists in that form. Dubai's association regime is separate and unaffected by the Abu Dhabi amendment.
Obligations surviving completion include defects liability owed to purchasers, the structural exposure the Civil Code imposes for ten years from handover on the contractor and supervising designer — which the developer must be able to pass through — outstanding infrastructure covenants owed to the master developer, service charge liability on unsold units, and any condition attached to project registration. Where the developer retains units, it also retains a voice and a liability in the association it created.
The commercially decisive point is warranty alignment. A developer owing purchasers a defects period longer than the one it holds against its contractor has bought that gap. The same applies to caps, insurance and dispute forums. That misalignment is created at contractor award and discovered when the first claim arrives.
Where this goes wrong
These are the recurring patterns behind the matters that reach us late.
- Land priced on an assumed scheme. The feasibility assumed a unit mix the affection plan and community design guidelines will not permit. The land price is already paid.
- Sales launched before project registration. Marketing spend committed, reservations taken, and the registration is still conditional. Every contract signed in that window is exposed.
- Design approval with no deadline. The master developer has unbounded discretion and no response period. The programme slips by months and no contractual remedy exists.
- Cooling capacity committed at community level. The sub-developer is charged for capacity the completed scheme does not use, for the life of the concession.
- Escrow modelled as working capital. Release lags expenditure, the equity gap was never funded, and the contractor stops.
- Profit-share JV with no cost definition. The percentage was negotiated hard; development cost was left to be agreed. Every subsequent dispute is about that omission.
- Registered developer left ambiguous in a JV. Neither party thought it mattered until the regulator asked who carries escrow and purchaser liability.
- Completion defined once and used four times. Payment, landowner entitlement, escrow release and purchaser handover all keyed to a single definition that suits none of them.
- Phase escrow ring-fencing discovered late. A developer expecting to cross-fund phases finds the accounts cannot be moved between them.
- Common areas never titled. Handover is declared complete, the association has no title to what it is meant to manage, and the developer's insolvency later puts the whole estate in question.
- Contractor defects period shorter than the purchaser one. The developer absorbs the difference for every claim in the gap.
- Abu Dhabi escrow modelled on Dubai release assumptions. The model drew from the first certified milestone and funded land and commissions from sales. Neither is available under Law No. 2 of 2025, and the equity gap is discovered after the land is committed.
- Management company left until after the first handover. Administrative Decision No. 25 of 2025 gives 30 days from delivery of the first unit and requires the manager to be accredited. A search begun on the day keys are released does not finish inside the window.
None of these is fixed at the dispute stage. Each is prevented by a diligence and consent-mapping exercise before land completion, and by drafting that reflects the sequence in which approvals are actually obtained rather than the sequence in which the parties would prefer them.
Frequently asked questions
Can we start marketing before the project is registered?
No. Developer registration and project registration are separate gates, and the second is a precondition to sales and marketing activity in both Dubai and Abu Dhabi. Reservations taken and marketing published ahead of registration expose the developer to regulatory action and give purchasers arguments about the enforceability of what they signed. If a launch date is fixed commercially, the registration file has to be built backwards from it, not started when the marketing is ready.
Is the Dubai developer regime the same as Abu Dhabi's?
No, and treating them as interchangeable causes real delay. Dubai regulates developers, projects and escrow through the Land Department and RERA, with the escrow framework in Dubai Law No. 8 of 2007 and the interim register in Dubai Law No. 13 of 2008. Abu Dhabi regulates under Abu Dhabi Law No. 3 of 2015, as amended by Law No. 2 of 2025 (in force 2 August 2025), through its own real estate authority and register. The underlying concepts — developer registration, project registration, trust accounts, milestone-based release — are comparable. The documentary requirements, thresholds, forms and supervisory practice are not.
What did the 2025 Abu Dhabi reforms change for developers?
Two instruments, and they bite at opposite ends of the project. Law No. 2 of 2025 amends Abu Dhabi Law No. 3 of 2015 and came into force on 2 August 2025. On funding: escrow money may not be used for land acquisition or broker fees, and nothing can be drawn until at least 20 per cent of the project is complete, which moves cost onto equity, land value or debt at the point a scheme is most exposed. On purchaser default: a formal escalation procedure must be followed before terminating for non-payment, and a purchaser removed from the developer's records may challenge that in court or in arbitration. On licensing: surveying, valuation, registration, brokerage, property management and operations are now within the regulated activities requiring a licence, with enhanced oversight by the Department of Municipalities and Transport. On governance: the developer is no longer the sole authority forming the ownership association, and the Owners' Union concept is replaced by an Owners' Committee. Administrative Decision No. 25 of 2025, in force from 28 February 2026, then adds delivery-stage obligations — mandatory disclosure statements before purchase, an accredited management company appointed within 30 days of first unit delivery, annual budget approval, insurance of common areas and audited financial records. None of this alters the Dubai position, which rests on separate emirate-level legislation.
We are buying a plot in a master community. What matters most in the plot agreement?
The design-approval mechanics, because unbounded master-developer discretion is a direct threat to programme and cost. Insist on approval criteria, fixed response deadlines, deemed-approval provisions and an escalation route. After that: the exact infrastructure obligations on each side of the plot boundary and their dates; district cooling and utility capacity commitments and how they are calculated; the community charge basis and its escalation; the covenants you are required to impose on your own purchasers; build-out deadlines and any step-in or buy-back right; and what happens if the masterplan changes after you have bought.
Should the landowner take a profit share or units?
It depends on which risk the landowner is willing to hold. A profit share makes the landowner an economic participant in the whole scheme, with exposure to cost overrun and the benefit of upside; the negotiation that matters is the definition of development cost, budget approval and audit rights, not the percentage. A plot or unit share fixes the landowner's entitlement in kind, insulating it from overrun but leaving it holding absorption and timing risk on its own units. Landowners seeking a defined, ring-fenced outcome generally do better with units; those prepared to take scheme risk for a higher return do better with profit.
Can we use off-plan sale proceeds to fund land or early works?
Not freely. Purchaser payments go into the registered project trust account and are released against certified construction progress, with a portion retained beyond completion. The account is a control on release, not a source of working capital. Land cost, pre-construction design, permitting and mobilisation generally have to be funded from equity, land value or debt, and the equity gap between expenditure and permitted release should be modelled explicitly before the first sale rather than discovered when the contractor's third payment falls due.
One phase of our scheme has stalled. What are the options?
They narrow quickly, so the timing of advice matters more than the choice. While the developer is still able to negotiate: rescheduling with purchaser consent, substituting units in a delivered phase, bringing in a replacement or co-developer, refinancing, or a negotiated variation of the master-developer build-out covenants. Once the regulator moves to cancellation, the position changes into a distribution exercise over whatever remains in the trust account and whatever can be realised from the land and partial works. Note also that phase trust accounts are ring-fenced from each other — a well-selling phase cannot be used to rescue a slow one.
Can we sell a part-built project?
Yes, but the timetable is set by the slowest consent. A sale of the project company keeps registrations, contracts and permits in place but transfers historic liabilities, including purchaser claims and any regulatory non-compliance, so the buyer will price and warrant accordingly. An asset sale requires consents from the master developer, the regulator, the escrow bank, the funder and potentially the purchasers, plus novation of the development and construction contracts. Start the consent mapping before the term sheet, because it determines whether the deal is a four-month transaction or a twelve-month one.
What does the developer remain liable for after handover?
More than most developers expect. Defects liability owed to purchasers under the sale contracts; the ten-year structural exposure the Civil Code places on the contractor and supervising designer, which the developer needs to be able to pass through rather than absorb; outstanding infrastructure and build-out covenants owed to the master developer; service charge liability on unsold units; and any condition attached to project registration. The transfer of common areas to the owners association is often incomplete — commonly because those areas were never separately titled — and an untransferred common area remains the developer's problem, including on insolvency.