Short answer
- The off-plan termination 25% or 40% rule in Dubai comes from Article 11 of Law No. 13 of 2008, as amended by Law No. 19 of 2020, and applies equally to US buyers.
- Below 60% completion of the whole project (with work started), the developer may keep up to 25% of the unit value; from 60% to 80%, up to 40%; above 80%, it may also keep the contract or ask for an auction.
- If construction never started for reasons outside the developer's control, or RERA cancels the project, all payments must be refunded.
- At the fixed peg of 1 USD = AED 3.6725, a 25% cap on an AED 1,836,250 unit is AED 459,062.50, or $125,000.
Off-plan termination 25% or 40% in Dubai: the rule US buyers need
The percentages cap what a Dubai developer may keep after terminating a defaulting buyer's contract, measured against the unit value in the SPA, not what you paid. Five steps turn the rule into dollars.
Confirm which law text applies
The 2020 version.Find the project's completion percentage
Whole project, not unit.Pick the tier
Under 60%, 60–80%, above 80%.Do the math in AED and USD
Use the 3.6725 peg.Compare with what you have paid
The gap decides any refund.
Step 1: Which version of Article 11 of Law 13 of 2008 applies from the US?
The version in force is Article 11 of Law No. 13 of 2008, as amended by Law No. 19 of 2020, issued November 24, 2020. Older articles may still describe a 30% deduction for projects that never started, which the 2020 text removed.
Step 2: Where do I find the completion percentage?
The percentage that counts is the one the Dubai Land Department (DLD) states in its document to the developer, calculated under RERA standards for the whole project. For an estimate, the Project Status (Mashrooi) service in the Dubai REST app shows status and inspection details; from the US, log in with a UAE PASS Visitor account, or look up the project's completion record.
Step 3: Which Dubai off-plan tier applies under Law 19 of 2020 for American buyers?
The tier depends only on the whole project's completion at the time the DLD documents the default.
Maximum share of unit value a Dubai developer may keep after terminating
Above 80%, the developer may instead keep the contract and claim the balance, or ask the DLD to auction the unit, with the buyer liable for sale costs.
is it fair the developer keeps all the money?
Step 4: How do I convert the cap into dollars?
Multiply the SPA unit value by the tier, then divide by 3.6725. The dirham has been pegged at 1 USD = AED 3.6725 since February 2002, per the UAE government.
| Project completion | Maximum retention (AED) | Maximum retention (USD) |
|---|---|---|
| Not started (outside developer's control) or RERA-cancelled | 0 | $0 |
| Below 60% | 459,062.50 | $125,000 |
| 60% to 80% | 734,500 | $200,000 |
| Above 80% (if developer terminates) | 734,500 | $200,000 |
These ceilings apply only after the DLD notice and 30-day period pass without payment or settlement.
Step 5: What do I get back, and when?
If you paid more than the developer may keep, the excess comes back within one year of termination or 60 days of resale to a new buyer, whichever is earlier. Example: a hypothetical buyer who paid $150,000 on the $500,000 unit above, in a project below 60%, faces a cap of $125,000, leaving at least $25,000 to be refunded.
Time-zone note: a 30-day DLD notice sent by email runs on Dubai time, 8 hours ahead of New York until November 1, 2026. Non-US readers can use the Article 11 tiers explainer; the American buyers' hub links onward, including to a missed off-plan payment and ways to cancel a contract.
Is the 25% or 40% taken from what I paid or from the unit price?
Does the 25% rule depend on my unit's progress or the whole project?
Do American buyers get a full refund if construction never started?
Can a developer keep more than 40% under Article 11?
Related guides
Sources
This guide is general information, not legal advice. Laws and procedures change; check the official source before acting. Published 12 October 2026, last updated 12 October 2026.