With the rise in off-plan properties projects launches in Dubai and in the region, it's crucial for investors to understand the key issues and considerations before diving into these opportunities.
Understanding Off-Plan Property
Off-plan properties are sold by developers before they are constructed.
Investors purchase these properties based on architectural plans and designs, often at a lower price compared to completed properties. Sales prices ramps up while the demand for the units in that project increases and available inventory decreases. This can offer significant capital appreciation potential by buying at first sale, but it also involves certain risks.

Key issues to consider when thinking to buy property off-plan in Dubai
1. Developer due diligence
The developer has to be registered with Dubai Land Department (DLD) based on their license with the Dubai Department of Economic Development (DED) with the activity of ‘real estate development’.
The development land should be in the name of the developer, or there must be a project development agreement between the developer and the owner of the land.
One of the most critical factors to consider is the reputation and track record of the developer. It's vital to research the developer's track record of delivering projects of the same scale and standards. Check their reputation as well in the market from the feedback of the existing owners in completed projects.
Ensure they have a history of delivering projects on time and meeting quality standards.
Property developers who intend to sell units off plan in a new project, needs to meet the following requirements and permits from the local authority:
Law No. (13) of 2008 regulates the sale of off-plan properties in Dubai, which serves the interests of both Developers and purchasers. It enables buyers to acquire real estate units through installment payments that match their financial means, a feat that would be unattainable if a lump sum payment were mandatory due to the high costs of property. For the developers on the other hand, it ensures the essential financing for real estate development projects, removing the necessity to obtain loans from banks or other financial institutions, along with the obligation to provide collateral and incur high interest rates, which can be onerous and lengthy to settle otherwise.
20% completion of the construction works of the project by the developer and thereafter applying to DLD for a no objection certificate (NOC) to sell units off plan
cash deposit of 20% of construction value of the project, in the designated escrow account and thereafter applying to DLD for a NOC to sell units off plan
a bank guarantee submitted to DLD equal to 20% of the construction value of the project and thereafter applying to DLD for a NOC to sell units off plan
submission of application to DLD seeking a NOC to sell units off plan, without meeting the requirements set out above, but on the condition that the developer will deposit all receiving money from units sales, into the designated escrow account
2. Project due diligence
a. The project needs to be registered with DLD, where the property buyer or it's broker, can verify the registration details of the project on DLD website or Dubai REST app
b. A developer is required to open a separate escrow account for the project itself with an approved by DLD, escrow account trustees, acting as escrow agent (bank or financial institution). All the amounts received from the property purchasers of off-plan units, or any loan installments funded by banks for those purchases, will be deposited in the escrow account of the project, for the purpose of construction. The developer needs to register in DLD system, all financial transactions on that escrow account.
c. The expected date of completion of the project needs to be stipulated in the sale and purchase agreement (SPA) between the developer and the buyer. As well the terms in the cases of default in committed by the developer to meet such estimated timelines.
d. Dubai REST app enables property owners to check the project competition status by monitoring completion percentages along with the project details
e. Inspect the quality of construction and the specifications promised by the developer. Request detailed information on the materials used, the design, architects and the finishing standards.
3. Location Analysis
The location of the off-plan project plays a significant role in its potential for capital appreciation and future rental income.
Consider factors like infrastructure development in the area, proximity to amenities like schools, shopping malls, hospitals, leisure facilities, attractions and long-term growth prospects of the master community.
4. Payment Plans
Evaluate the payment schedule offered by the developer based on the downpayment amount required upon purchasing a unit. Understand the milestones for payments and it's correlation with the construction progress along with interest rates or any additional costs that may arise during the construction phase.
Ensure that the payment plan aligns with your financial capabilities.
If a buyer does not meet their contractual duties in an off-plan sale agreement with a property developer, then Law No. (19) of 2020, which amends Law No. (13) of 2008, will be enforced.
5. Technical due diligence
ESG and Sustainability component of the project. Evaluate any initiatives or built standards oriented towards Net zero carbon. Overall built environment and social community if the site
6. Legal Considerations
Familiarize yourself with the legal aspects of buying off-plan property in Dubai. Understand the contract terms, potential liabilities, and the laws governing such transactions.
Upon purchasing a unit off-plan the developer records the transaction in the Oqood system of DLD, from where an Oqood certificate, (or the Initial Sale Contract) is being issued in a digital format to the buyer, which serves as proof of ownership.
The certificate contains information such as the property’s details, purchase price, payment schedule, and developer’s information. This document is different from the Title Deed.
Article (11) of Law No. (19) of 2017 Amending Law No. (13) of 2008 is an explanatory note for Regulating the Interim Real Property Register in the Emirate of Dubai.
The title deed (also known as a property ownership deed) is a legal document that confirms ownership of a property, once it has been completed and is ready to be occupied.
Stay informed about the current market trends and economic forecasts in Dubai. Analyze factors like supply-demand dynamics, rental yields, and the overall economic outlook to make informed investment decisions.
8. Exit Strategy
Develop a clear exit strategy before investing in off-plan property. Consider whether you plan to sell the property upon completion or hold it for future rental income, and how market conditions can impact your decision later on.
Conclusion
Investing in off-plan property in Dubai can be a rewarding venture, but it requires careful consideration and due diligence. By understanding the key issues highlighted in this article, real estate buyers can mitigate risks and maximize returns on their investments. Remember, thorough research and a long-term perspective are essential when venturing into the dynamic world of Dubai's real estate market.
Disclaimer: The information presented in this article is for general information purposes only and does not constitute legal advice nor should it be used as a basis for any specific action or decision. For further information please do your own diligence and contact a competent authority.
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