Investing in off-plan real estate in Abu Dhabi is one of the safest ways to enter the property market. Thanks to strong regulations set by ADREC, buyers are protected from financial risks and project delays.

With the introduction of Law No. 2 of 2025, which updates the earlier Law No. 3 of 2015, the emirate has reinforced its framework to ensure that projects are delivered on time, payments remain secure, and property quality is guaranteed before handover.

Key Highlights

• Buyer payments are held in escrow accounts and released only when construction milestones are verified.
• Handover dates must be stated clearly in the Sales and Purchase Agreement (SPA), with penalties for late delivery.
• Buyers are entitled to a snagging inspection and a one-year defect liability period after handover.
• Only licensed and registered developers can sell off-plan properties.
• All handover fees, including the 2% ADM registration charge, must be disclosed upfront.
• Post-handover payment plans such as 40/60 or 50/50 are legally enforceable once written into the SPA.

1. Escrow Accounts:

In Abu Dhabi, all off-plan buyer payments go into a approved escrow account, a secure bank account where funds are held until verified construction progress is made.

Under the strengthened law:
• Funds cannot be withdrawn until at least 20% of construction is completed and confirmed by independent engineers.
• Developers are prohibited from using escrow funds for land purchases, marketing, or broker commissions.
• If a project halts or is canceled, DMT can revoke the developer’s license and appoint another party to complete it.

Why it matters: Your money stays tied to actual progress, giving you confidence that your investment is safe and properly managed.

2. Legally Enforced Handover Timelines

The handover marks the moment you officially receive your property, and Abu Dhabi law ensures this happens as promised.

Every SPA must include a specific handover date.
• Buyers have a legal right to timely delivery.
• Developers may face penalties or compensation obligations for delays.
• Repeated non-compliance can result in sanctions from ADREC.

Why it matters: You can plan your move-in or rental timeline with certainty, knowing the developer is legally bound to deliver on schedule.

3. One-Year Defect Liability

Before taking possession, buyers can carry out a snagging inspection, a detailed check of the unit’s finishes, wiring, and workmanship.

• Developers must correct defects within 30 to 60 days, depending on the issue.
• Buyers benefit from a one-year warranty period after handover, during which any new defects must be fixed by the developer.

Why it matters: You receive a property built to the promised standard, with a full year of post-handover protection.

4. Licensed Developers Only

Only developers registered with ADREC are authorized to sell off-plan properties in Abu Dhabi.

Under the new law:
• Licensing extends to brokerage, valuation, surveying, and property management services.
• Developers must renew their license annually and appear in the Real Estate Development Register.
• Projects cannot be marketed or sold without an approved escrow account.

Why it matters: You’re dealing only with vetted, licensed developers operating under official oversight.

5. Transparent Fees and Clear Costs

Abu Dhabi ensures full transparency at the handover stage, so buyers are never surprised by hidden charges.

• The Abu Dhabi Municipality (ADM) registration fee is fixed at 2% of the property value.
• Any additional service or administrative charges must be pre-approved by ADREC.
• All fees must be listed in the SPA from the outset, with no last-minute additions allowed.

Why it matters: You can plan your finances confidently, with complete clarity on what you’ll pay at handover.

6. Post-Handover Payment Plans

Developers may offer flexible options such as 40/60 or 50/50 payment structures, allowing part of the amount to be paid after completion.

• Some projects extend payments for up to five years after handover.
• Once written into the SPA, these terms cannot be changed without your consent.

Why it matters: You can move in or rent out the property while continuing your payments, improving your cash flow flexibility.

Frequently Asked Questions

1. What is an escrow account in Abu Dhabi real estate?
It is a DMT-approved account where all buyer payments are kept secure until verified construction milestones are reached. Funds cannot be used for non-construction expenses.

2. What is an SPA (Sales and Purchase Agreement)?
An SPA is a binding contract outlining your property’s price, payment schedule, handover date, and fees. It is enforced by DMT and ADREC.

3. How does snagging work?
Buyers can inspect their unit before handover and report defects. Developers must fix these issues, and a one-year defect liability period applies after handover.

4. How are developers licensed?
Developers must be registered with ADREC, hold an active license, and have an approved escrow account before selling any off-plan unit.

5. Are post-handover payment plans available?
Yes, many developers offer 40/60 or 50/50 plans, sometimes with extended payment terms. These are legally binding once included in the SPA.

Looking to Invest in Abu Dhabi Off-Plan Properties?

Our experts can guide you through every step, from selecting the right project to understanding handover laws and payment options.

 Contact us now to explore the best investment opportunities in Abu Dhabi.