Missed an Off-Plan Payment in Dubai? What the Developer Can Keep Under Article 11
Miss an off-plan instalment in Dubai and the developer must report you to the DLD, which gives you 30 days to pay. After that, Article 11 of Law No. 13 of 2008, as amended in 2020, caps what the developer keeps: nothing if work never started for reasons beyond its control, up to 25% of the price below 60% completion, and up to 40% from 60% upwards.
Key takeaways
- The DLD, not the developer, serves the 30-day notice, and it must try to settle the dispute during those 30 days.
- The caps are percentages of the unit's contract price, not of what you have paid. Below the cap, you lose everything you paid.
- Above 80% completion the developer has three routes, and a DLD auction usually leaves you with far more money than a termination.
- Any excess must be refunded within one year of termination or 60 days of resale, whichever comes first.
- Selling your contract before termination almost always costs less than walking away, but the overdue amount has to be cleared first.
What the law says, in one table
Article 11 has been rewritten three times: by Law No. 9 of 2009, Law No. 19 of 2017 and Law No. 19 of 2020. The version in force today sets a ladder tied to the project's completion percentage, which the DLD measures under its own technical standards. Rupee figures in this post use AED 1 = about Rs 26.1.
| Project status when the 30 days run out | What the developer may do | Refund to you |
|---|---|---|
| Work not started, for reasons beyond the developer's control | Terminate | Everything you paid |
| Project cancelled by a final DLD decision | Terminate | Everything you paid |
| Work started, below 60% complete | Terminate and keep up to 25% of the contract price | Anything paid above that 25% |
| 60% to 80% complete | Terminate and keep up to 40% of the contract price | Anything paid above that 40% |
| Above 80% complete | Keep the contract and claim the balance; or ask the DLD to auction the unit; or terminate and keep up to 40% | Depends on the route (see below) |
The first row is the big change made in 2020. Before it, a developer could keep up to 30% even when construction had not begun. Al Tamimi's note on the amendment says the developer must now return all amounts in that case. Older articles, and some of our own earlier summaries, still quote the 30% figure: it no longer applies to terminations under the current text.
How the procedure runs, step by step
- Developer's report. The developer files a prescribed form with the DLD, naming both parties, the unit and the breach.
- The DLD's notice. The DLD serves you a dated written notice, in person, by registered mail with acknowledgement of receipt, by email, or by another method it approves. The notice gives you 30 days to perform.
- Settlement attempt. During the 30 days the DLD tries to broker a settlement. If one is reached, it is written up and attached to your sale and purchase agreement.
- Completion certificate. If you haven't paid or settled, the DLD confirms the project's completion percentage. That number decides which rung of the ladder applies.
- Developer's election. The developer terminates, or, above 80%, chooses between the three routes. For a termination it applies to cancel the interim (Oqood) registration through the DLD's termination service.
- Refund. Anything above the cap comes back within one year of termination, or within 60 days of the unit being resold, whichever is earlier.
Lawyers treat these steps as mandatory. A termination that skips the DLD notice, or a clause claiming more than the cap, can be challenged in court.
Late fees before any of this starts
Most sale and purchase agreements add their own penalty on overdue instalments. Guides quote 1% to 2% a month after a grace period of 15 to 30 days. That is a contract term, not a statute, so read your agreement: on a AED 120,000 missed instalment, 1% a month is AED 1,200 for each month you are late.
Worked examples at each rung
Take a unit bought for AED 1,200,000 (about Rs 3.13 crore). The examples count only instalments paid towards the price. The 4% DLD fee and other charges you paid at booking are separate, and you should not assume they come back.
Below 60% complete
You have paid 40%, which is AED 480,000. The cap is 25% of AED 1,200,000, or AED 300,000. The developer keeps AED 300,000 and owes you AED 180,000, about Rs 47 lakh.
Had you paid only 20%, AED 240,000, you would be under the cap. The developer keeps everything you paid and you get nothing back.
60% to 80% complete
You have paid 60%, AED 720,000. The cap is 40%, AED 480,000. Your refund is AED 240,000, about Rs 62.6 lakh. You have lost AED 480,000, about Rs 1.25 crore.
Above 80% complete
You have paid 70%, AED 840,000, so AED 360,000 is outstanding. The three routes give very different results.
| Developer's route | What happens | Cash back to you |
|---|---|---|
| Keep the contract | You still own the contract and are pursued for AED 360,000 | None; you still owe the balance |
| DLD auction | Unit sells at, say, AED 1,100,000; the developer takes AED 360,000 and you bear the sale costs, assumed here at AED 30,000 | AED 710,000 (about Rs 1.85 crore) |
| Termination | Developer keeps 40%, AED 480,000 | AED 360,000 (about Rs 94 lakh) |
The auction price and costs are illustrative. Even so, an auction here leaves you AED 350,000 better off than a termination, because the developer only recovers what it is owed.
Sell the contract, or walk away?
Before the 30 days run out, you may be able to sell your position. The catch is that developers audit your account before issuing a No Objection Certificate, and they generally want every overdue instalment and charge cleared first. In a distressed sale the incoming buyer often funds those arrears as part of the deal.
Compare the below-60% example. Walking away costs you AED 300,000. Suppose instead a buyer takes over at AED 1,150,000, a discount of AED 50,000, clears your arrears and pays you back your AED 480,000 less the discount: you receive AED 430,000. You lose AED 50,000, plus the developer's transfer charges, instead of AED 300,000. The buyer pays a fresh 4% DLD fee on the new price, AED 46,000. Our guide to selling off-plan before handover covers the NOC and the fees in full.
Other exits worth asking for in writing: a rescheduled payment plan, a switch to a cheaper unit in the same project, or a later date for the missed instalment. Our guide to Dubai payment plans sets out how restructuring usually works.
When the developer is the one at fault
The ladder assumes the buyer is in breach. Courts look harder when the developer has been late too. In a case reported in February 2026, an investor bought a unit valued at about AED 463,000 in 2017; the project finished in February 2023, more than three years past the contractual date. The court cut the developer's retention from 40% to 10%, ordered a AED 185,000 refund and added 5% legal interest from the filing date. That case belongs to the developer-default side, which our post on developer delays in Dubai covers.
Who should be most careful
- Buyers on steep construction-linked plans. A 60/40 or 70/30 plan front-loads cash exactly when the project is below 60%, so a missed payment early costs a quarter of the price.
- Buyers relying on a flip. If you planned to sell before a large instalment and the market softens, you may be forced sellers at a discount or defaulters.
- Buyers relying on a mortgage at handover. Check early that a bank will lend on the unit. A refused mortgage is not a defence to Article 11.
- Buyers who ignore the DLD's email. The 30 days run from the notice, and an email counts. Keep your contact details current with the developer and the DLD.
For Indian buyers
Instalments sent under the Liberalised Remittance Scheme remain a foreign asset while the contract stands, so the purchase goes in Schedule FA of your Indian return every year. A refund after termination is money coming back from abroad: keep the DLD notice, the termination letter and the developer's refund statement with your remittance records. The loss on a forfeited deposit is a capital question to take to your tax adviser. Our note on tax on Dubai property for Indian buyers covers reporting and repatriation.
Frequently asked questions
How long do I have to pay after missing an off-plan instalment in Dubai?
Once the developer reports the default, the DLD serves you a notice giving 30 days to pay. The contract may also give a short grace period before the developer reports you, often 15 to 30 days, with late fees. If the 30 days pass without payment or a settlement, the developer can use the Article 11 remedies.
How much can a Dubai developer keep if it cancels my off-plan purchase?
It depends on completion. If work never started for reasons beyond the developer's control, you get everything back. Below 60% complete, the developer may keep up to 25% of the contract price. From 60% upwards it may keep up to 40%. Anything you paid above the cap must be refunded.
When will I get my refund after a termination?
Article 11 gives the developer one year from termination, or 60 days from reselling your unit to another buyer, whichever is earlier. If the developer resells quickly, the 60-day limit applies. Keep a copy of the termination and the DLD completion certificate so you can prove when the clock started.
Can the developer auction my off-plan unit in Dubai?
Only once the project is more than 80% complete. At that stage the developer can ask the DLD to sell the unit at public auction, take what it is owed from the proceeds and pass you the balance after sale costs. That usually returns more money to you than a termination with 40% retained.
Can I sell my off-plan unit if I am behind on payments?
Usually only after the arrears are cleared, because developers check your account before issuing the No Objection Certificate. In practice the incoming buyer often pays the overdue amount as part of the price. Act before the 30-day notice expires, while you still hold a contract to sell.
If you are behind on an off-plan plan, Realty Hunting can help you work out what each exit costs before you choose one.
