Land Department says developers entitled to 30% of paid amount if buyer cancels contract


The Land Department in Dubai established an interpretation for article no (11) of law no. (13) for the year 2008 in regards to Regulating the Interim Real Estate Register in the Emirate of Dubai.

“The interpretation of article no. (11) explains the details of implementing the article itself, in order to protect the rights of developers and buyers and maintain the contractual balance in the real estate equation,” said Sultan Butti Bin Mijrin, Director General of the Land department in Dubai.

Bin Mijrin mentioned that based upon the article no. (11) of Law no (13) the developer should inform the Land Department if a buyer breached the property-selling contract; the Department will then notify the purchaser in person or by registered mail or email, and give the purchaser 30 days to fulfill the contractual obligations.

In case of passing the term, the developer will then hold the right to cancel the contract and refund the sum paid by the buyer after deducting an amount not exceeding 30 per cent of the total paid amount.

“The request of contract cancellation should be presented by the developer not the property buyer, but in case of contract cancellation the developer has the right to keep 30 per cent of the contract value, and 30 per cent-70 per cent of the paid amount is implemented on the amount that exceeds 30 per cent,” said Bin Mijrin.

In addition, the developer has the right in case of cancelling the contract, to keep the money paid by the purchaser up to the date of selling of the real estate unit, and in this case the buyer could go to the real estate court if he would like to cancel the contract.

The article no (11) will be effective immediately; contracts executed prior to the Law shall be subject to the terms of the contract entered by the developer and the purchaser, whereas the contracts executed after the enactment of the Law shall be subject to the rules of the Law.

The developer should also notify the buyer and give a reasonable notice period to pay the contractual obligation and at the same time a copy of the notification letter should be sent to the Land Department, which will then inform the buyer in person, by mail or e-mail of a 30-day period to pay the contractual obligation. In case of any violation of the contract, the contract will be cancelled.

The Land Department will implement the regulation no. (11) starting from Thursday November 13, 2008 and it will be used to answer developers and investors inquires.


  1. I like to express my opinion regarding Law 13:

    It says “to protect the rights of developers and buyers and maintain a contractual balance in the realestate equation”

    Where is the balance? When the law was altered after the buyers signed the contract with an “exit clause”.

    It only protects the developers.

    If laws are going to be altered at the “whims and fancy” of the authorities I am sure confidence and trust in the real estate market will be lost forever. Realestate all over the world has been effected; but no such(one sided) law has come to my knowledge.

  2. Hi,

    in my opinion is better to stay away from real estate and finance in the near future. All over the world the business is down. Some statistics, that we published recently said that globally the business is down more than 57%.

    It will take decades to reestablish confidence and trust.

    Other businesses still offer some limited opportunities.

    Thanks for expressing opinion and regards 🙂


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