The developer must first give you 60 days' written notice to pay what is overdue, and the authorities invite you both to settle before those 60 days end. If you still have not paid or settled, the developer may cancel your purchase without going to court, resell the unit and keep between 10% and 40% of the contract value from what you paid into escrow, depending on how far the project is built. The rest comes back to you within 15 working days of asking. These rules are in Article 17(3) of Abu Dhabi's Law No. 3 of 2015, as replaced by Law No. 2 of 2025, and in Administrative Decision No. 165 of 2025, which sets the percentages. ADREC, the emirate's real estate regulator, publishes all three on its regulations page.
This is a summary to help you understand the rules before you sign, not legal, tax or financial advice. If you are behind on payments, talk to the developer and to a lawyer.
Which rules apply?
Off-plan sales in Abu Dhabi are governed by Law No. 3 of 2015 on regulating the real estate sector. Its original Article 17 let either the developer or the buyer rescind an off-plan contract for a substantial breach, after first asking the other side to put it right. It set no scale for what a developer could keep.
That changed in two steps:
| Rule | Sets |
|---|---|
| Law No. 2 of 2025 | Cancelling without a court |
| Administrative Decision No. 165 of 2025 | What a developer may keep |
Law No. 2 of 2025 replaced Article 17(3) with a set procedure that lets a developer cancel without going to court or arbitration, and took effect 90 days after it was published in the Official Gazette. Decision No. 165 sets the share a developer may keep, by construction progress, and the deadlines for refunds, and took effect when it was published. The Department of Municipalities and Transport (DMT) announced Decision No. 165 on Mar 27, 2026, with three other decisions on escrow, jointly owned property and owners' committees. Every rule below comes from those texts unless another source is named.
What happens first when you miss a payment?
The law sets out the steps, in order:
- The developer sends you a notice through a notary public or by registered mail, at the address in your purchase contract, asking you to pay what is overdue within 60 days. If your purchase is mortgaged, your bank gets the same notice.
- After 15 days, the developer tells the authorities, with proof that you were notified and a certificate from the escrow account's trustee bank stating that you are in breach.
- You are invited to settle. On its own initiative, or when you, the developer or your bank asks, the authority invites you both to an amicable settlement before the 60 days run out. A settlement is written up as an annex to your contract.
- If there is no settlement, or you do not meet it in the time given, the developer may terminate the contract.
Keep your address up to date with the developer, because the notice goes to the one in your contract.
What happens after the developer cancels?
The developer asks for the cancellation, and the authorities act on it:
- Your name comes off the register. After checking that the developer is keeping to the project's approved completion schedule, the authority removes you from the Initial Register for the unit. Under Decision No. 165, ADREC must notify you, your bank and the escrow bank within 5 working days of the developer's request.
- The unit can be resold after 30 days. The developer may sell it to someone else 30 days after your name is removed, and the sale money goes into the project's escrow account.
- ADREC writes to everyone with the amounts to be paid out of escrow to the developer and to you.
How much can the developer keep?
It depends on how far the project's construction works have gone, as certified by ADREC when the developer asks to cancel. The percentage is of the value of the sale contract, taken from what you paid into the escrow account, and any excess is refunded to you.
| Project built | Developer may keep |
|---|---|
| Not started, not the developer's fault | Nothing: all you paid comes back |
| Started, below 10% | 10% of the price |
| Above 10%, up to 30% | 15% of the price |
| Above 30%, up to 60% | 25% of the price |
| Above 60%, up to 100% | 40% of the price |
Three things in that table are easy to misread:
- The share is of the price, not of what you paid. On an AED 2,000,000 unit in a project 40% built, 25% is AED 500,000. If you had paid AED 800,000 into escrow, up to AED 500,000 goes to the developer and AED 300,000 comes back to you. If you had paid AED 400,000, all of it could be kept.
- Paid 60% or more? The table may not apply. Where a buyer has paid 60% or more of the unit's value, Decision No. 165 lets ADREC decide the developer's compensation without being bound by the table.
- Your contract still counts. The decision applies the table "taking into consideration the terms agreed by the parties" in the sale agreement, so read your contract's own default clause too, and confirm with ADREC how the two fit together in your case.
How fast do you get your money back?
Under Article 4 of Decision No. 165, the escrow bank pays:
- the developer its share within 15 working days of the developer's request, made on ADREC's form with ADREC's letter; and
- you the remaining balance within 15 working days of your request, on ADREC's form with ADREC's letter and, if the purchase was mortgaged, a no objection certificate from your bank.
If the developer took any money from you outside the escrow account, which the law forbids, it must refund all of it within 30 days of ADREC's letter, before anything is refunded to you from escrow.
Can you still go to court?
Yes. Article 17(3) says these rules do not take away a buyer's right to go to court or arbitration if the buyer considers it necessary.
How is this different from Dubai?
Both emirates now let a developer cancel without a court, on a scale tied to construction. The details differ:
| Abu Dhabi | Dubai | |
|---|---|---|
| Notice to pay | 60 days, from the developer | 30 days, from the DLD |
| Most kept | 40%, above 60% built | 40%, from 60% built |
| Refund due | 15 working days after you ask | 1 year, or 60 days after resale |
Our post What if you miss off-plan payments in Dubai? walks through Dubai's rules in full.
How do you avoid getting here?
- Read the payment plan as dates and amounts, not percentages, and check you can meet each one if your income dips. Our payment plan calculator turns a plan like "20 / 30 / 50" into a schedule.
- Look at what is due before handover. A plan that leaves part of the price until after you get the keys spreads the load: 5 of the 59 Abu Dhabi projects in our catalog, as imported on Nov 1, 2026, offer a post-handover plan, and the advisor can find them for you.
- If you plan to borrow, know the limit first. Banks may lend at most half of an off-plan home's value, as our post Can you mortgage off-plan property in Abu Dhabi? explains.
- Pay only into the project's escrow account and keep every receipt. Money paid there is what the refund rules protect.
- Answer a notice at once, and ask for a settlement within the 60 days rather than after them.
- Have a lawyer read the contract, including its own default clauses, before you sign.
You can browse every Abu Dhabi project we list, or by community, such as Saadiyat, where this post's image comes from, or Yas Island. For who may buy and what registration costs, read Can foreigners buy property in Abu Dhabi?.