Why Off-Plan? The Case For and Against
Off-plan property — buying a unit before or during construction — has driven some of the most significant investment returns in Abu Dhabi's market. Buyers who committed to Aldar's Yas Acres at early-phase pricing, or picked up Saadiyat Island units ahead of the cultural district completion, have seen capital appreciation that ready-market buyers simply couldn't access. The early-mover premium is real.
But off-plan carries risks that ready property does not. You are committing capital — sometimes in significant instalments over 2–5 years — to a product that does not yet exist. The developer could face financial difficulty. Construction could be delayed. The finished product could differ from what was marketed. These are not hypothetical risks — they have all occurred in the UAE market, and understanding how to protect yourself against them is the purpose of this guide.
Off-Plan Advantages
Early-phase pricing below market at handover. Flexible payment plans (10–70:30 construction/handover splits common). No immediate rental income requirement. Maximum capital appreciation potential.
Off-Plan Risks
No rental income during construction. Project delay or cancellation. Finish quality may vary from marketing. Capital tied up for 2–5 years. Developer financial difficulty.
Step One: Confirm RERA Registration
This is the single most important check for any off-plan purchase in Abu Dhabi. Every off-plan project sold to the public in Abu Dhabi must be registered with the Real Estate Regulatory Authority (RERA) before the developer can accept any deposits or payments.
RERA registration means the project has been reviewed and approved by the regulator. It does not guarantee the project will complete on time or at all — but it means the basic regulatory framework is in place. Buying from an unregistered project is extremely high risk and offers you almost no legal recourse if things go wrong.
Ask for the RERA Project Registration Number
The developer's sales team should be able to provide this immediately. You can cross-check it on the Abu Dhabi Department of Municipalities & Transport portal. If a developer hesitates or cannot provide a registration number, walk away.
Step Two: The Escrow Account
Under Abu Dhabi's Real Estate Law, developers selling off-plan properties are required to hold all buyer payments in a dedicated escrow account that is controlled by a licensed escrow agent — not by the developer itself. Funds can only be released from escrow to pay for construction costs as verified by a third-party quantity surveyor or engineer.
This mechanism is your most important financial protection as an off-plan buyer. It means that even if the developer's main business runs into difficulty, your purchase payments are ringfenced and cannot simply be used to fund other activities.
⚠ Red Flag
If a developer asks you to pay directly into their company account rather than a registered escrow account, this is a serious red flag. Always insist on seeing the escrow account details — including the name of the licensed escrow agent — before making any payment. Legitimate developers in Abu Dhabi will not hesitate to provide this information.
What to Ask For
- The name and licence number of the escrow account holder
- The escrow account bank name and account number
- Confirmation in writing that all your payments will go to this account
- The conditions under which funds are released to the developer
Step Three: Read the Sales & Purchase Agreement (SPA)
The Sales & Purchase Agreement is the legal contract between you and the developer. It is the most important document in your transaction, and you should read every word — or have a UAE-qualified lawyer read it for you. Key clauses to scrutinise:
Completion Date and Delay Penalties
What is the contractual completion date, and what happens if the developer misses it? A good SPA will include a grace period (typically 6–12 months) after which the buyer has the right to terminate and receive a full refund plus compensation. A weak SPA will have unlimited grace periods or vague completion language — watch for these.
Specifications and Variations
The SPA should include or reference detailed specifications for the unit — finishes, appliances, square footage, layout. Developers typically reserve the right to make "minor variations" — understand what this means and whether you have any recourse if the finished product materially differs from what was marketed.
Payment Schedule
Every payment milestone should be clearly defined — tied either to construction progress milestones (slab completion, structure, facade, fit-out) or fixed dates. Beware SPAs where large payments are front-loaded before meaningful construction progress — this concentrates your risk at the earliest, most uncertain stage.
Cancellation Terms
Under what circumstances can the developer cancel the contract? What are your rights if they do? What penalties apply if you need to exit the contract as a buyer? In a balanced SPA, these protections work in both directions. An SPA where only the developer has easy exit rights is a warning sign.
A lawyer review of an SPA typically costs AED 2,000–5,000. On a AED 1,000,000 purchase, that is 0.2–0.5% of your investment for full legal clarity. It is always worth it.
Step Four: Evaluate the Developer
RERA registration and escrow protection reduce your risk considerably, but they do not eliminate it. The most important long-term protection is buying from a developer with a proven track record of delivery. Here is how to assess any Abu Dhabi developer:
Completed Projects
Has the developer completed and handed over projects before? Can you visit a completed community and speak to residents? A developer with multiple handover completions has demonstrated they can manage the full development cycle. A developer launching their first project carries substantially more risk.
Construction Activity
For a project already under construction, ask to visit the site. Active, visible construction is the best evidence that a developer is committed and funded. A site where little is happening, despite significant time having passed since launch, is a concern.
Financial Backing
Is the developer backed by a sovereign fund, publicly listed, or financially transparent? Aldar (listed, government-linked) and Bloom (institutional backing) carry far less developer risk than a small private developer on their first project. This doesn't mean smaller developers are bad — but they require more due diligence.
Reviews from Existing Residents
Google, community forums, and property portals all carry reviews from residents of completed projects. Search the developer's name alongside "review" or "complaints" — a pattern of problems with snagging, maintenance, or handover quality in previous projects should give you pause.
The Red Flag List
Stop — Check These Before You Proceed
No RERA project registration number — do not pay anything until this is confirmed
Payment not into a named escrow account — always a red flag regardless of how the developer explains it
SPA with unlimited delay grace periods — means the developer faces no penalty for indefinite delays
Pressure to pay a "reservation fee" before signing SPA — legitimate developers give you time to review documents
First project from unknown developer with no track record — requires extreme caution and enhanced due diligence
No site activity despite project being "under construction" for over a year — a serious warning sign
Prices dramatically below market — if a deal looks too good to be true in property, it usually is
At Handover: What to Expect
When your property is ready, the developer will notify you of the handover date and invite you to inspect the unit. This is the snagging inspection — your opportunity to identify any defects or discrepancies from the SPA specifications before you accept the keys.
- You are entitled to bring an independent snagging inspector — this is a small but worthwhile cost (AED 1,500–3,000) for a thorough professional assessment
- Document every snag in writing and photograph everything before signing the handover certificate
- The developer is legally obligated to remediate structural defects for 10 years and other defects for 1 year after handover
- Once you sign the handover certificate, your service charge obligations and utility connections begin
- Your title deed will be registered at the DMT — the developer's team should guide you through this process
Evaluating a specific off-plan project?
We'll tell you honestly what we think — RERA status, developer track record, the lot.
Bottom Line
If you have questions about any of the steps in this guide, or want a personalised walkthrough of the buying process for a specific project you're considering, message us on WhatsApp. We'll walk you through it honestly, at no cost.