Buying an apartment in Dubai on a payment plan: how developer installments work

Buying an apartment in Dubai on a payment plan: the short answer

Yes, it is possible to buy an apartment in Dubai on a developer payment plan, especially when purchasing an off-plan unit. This arrangement is not a bank mortgage: you agree a schedule of instalments with the developer under the sale contract, while payments for an off-plan project are deposited into that project’s escrow account. The buyer’s legal disposition is registered in the Interim Real Property Register, commonly referred to by buyers and developers as Oqood. The exact down payment, instalment dates, post-handover balance and other commercial terms depend on the specific project and sale agreement.

A Dubai apartment can also be purchased with a bank mortgage. In that case, a financial institution provides financing under its own approval process and loan terms. A mortgage and a developer instalment plan are therefore different arrangements, even if a buyer uses both at different stages of a purchase.

When people search for “Dubai apartment on instalments”, “Dubai property payment plan”, “mortgage in Dubai”, “Dubai mortgage rate” or “can foreigners get a mortgage in Dubai”, the first point to clarify is which payment method is being discussed. A developer plan, a post-handover plan and a bank mortgage have different payment flows, documentation and contractual consequences.

Developer instalments, post-handover plans and mortgages: the difference

The term “payment plan” is used broadly in property advertising, but it can describe several different structures. Buyers should read the payment schedule and sale agreement rather than relying only on a headline such as “monthly instalments” or “payment after handover”.

A developer instalment plan is a commercial schedule offered by the seller of the unit. It does not mean that a bank has approved the buyer for financing. It also does not by itself answer whether the buyer will own the completed unit without further payment: that depends on the agreed schedule, handover terms and all other obligations under the sale agreement.

A post-handover plan is still not automatically a mortgage. It describes a schedule where a portion of the agreed purchase price may fall due after the apartment is handed over. The contract should identify the amount or percentage allocated to each stage, the dates or milestones, and what happens if a payment is late.

A bank mortgage is separate financing. Buyers asking “what mortgage is available in Dubai?”, “what is the mortgage percentage in Dubai?” or “is there Islamic mortgage financing in Dubai?” should obtain current information directly from the relevant bank or finance provider. Mortgage rates, profit rates, eligibility, loan amounts, residency requirements, deposits and repayment periods are not fixed by the developer instalment rules described here and vary by provider and individual case.

How a Dubai developer payment plan works step by step

The practical sequence depends on the project, but an off-plan purchase generally begins with selecting a unit and reviewing the proposed sale terms. Before committing, the buyer should identify the full purchase price, the payment events, the unit description, the stated net area, the expected handover provisions and the fees or charges expressly approved or stated in the documentation.

• The buyer and developer agree the sale of a particular apartment and the payment schedule.

• The buyer makes payments in accordance with the agreed schedule and payment instructions.

• For an off-plan sale, purchaser payments are deposited into the escrow account opened in the name of the relevant development project.

• The legal disposition relating to the off-plan unit is registered in the Interim Real Property Register.

• Construction progresses and the buyer continues to meet contractual payment obligations.

• After project completion and the completion certificate, the developer is required to hand over and register the unit in the purchaser’s name on the Real Property Register where the purchaser has fulfilled contractual obligations.

Law No. 8 of 2007 defines an escrow account as the bank account of a real estate development project into which payments made by purchasers of off-plan units, or by the project’s financiers, are deposited. The account is opened in the name of the project and is dedicated exclusively to construction of that development project. Each project must have a separate escrow account.

For buyers, this means that an off-plan instalment should not be treated as an informal private transfer. Payment directions should be consistent with the project documentation and the applicable escrow structure. Where a broker is involved in the marketing of an off-plan unit, Executive Council Resolution No. 6 of 2010 provides that the broker must deposit the sale price into the project escrow account and may not deposit it into the broker’s own account or deduct commission from that price before making the escrow deposit.

Typical payment-plan formats: 60/40, monthly instalments and post-handover balances

Developers may market payment structures using short descriptions such as “60/40”, “1% per month” or “post-handover plan”. These labels describe a proposed allocation of the price across payment stages; they are not standard legal terms that guarantee identical conditions across all projects.

A “60/40” structure usually describes a plan in which one part of the price is scheduled before handover and the remaining part is scheduled at or after handover. It does not by itself show whether the pre-handover part is linked to specific construction milestones, calendar dates, booking events or another formula. It also does not state the contractual consequences of delay, changes in payment dates or whether additional requirements apply before handover.

A “1% monthly” description generally indicates that the developer proposes monthly instalments calculated as one percent of the agreed price for a stated period. The buyer should not assume that every monthly plan begins immediately, ends at handover or has no larger initial or final payment. The contract and payment schedule determine those points.

A post-handover payment plan means that some payments may continue after the unit is handed over. It is important to distinguish this from a mortgage. The balance may still be due to the developer under the sale agreement rather than to a bank under a loan agreement. Whether the purchaser can receive handover, registration, possession or other rights while amounts remain outstanding is determined by the relevant contract and the purchaser’s fulfilment of contractual obligations.

Payment plans should be reviewed as a complete schedule rather than as a single percentage. A buyer should be able to answer the following questions before proceeding:

• What is the total agreed price of the apartment?

• What amount is due at booking, signing or registration?

• Which payments are due before completion, and which are due after handover?

• Are instalments tied to construction milestones, fixed dates or both?

• What payment method and account details are stated for each instalment?

• What does the agreement say about missed payments, cancellation and refunds?

• Which registration fees or other charges are stated, and which of them are approved where approval is required?

Escrow accounts and Oqood registration

For off-plan purchases, two concepts are especially important: the project escrow account and registration in the Interim Real Property Register. Buyers commonly use the word “Oqood” for the interim registration process or record. In legal terms, Law No. 13 of 2008 regulates the Interim Real Property Register in Dubai, while Executive Council Resolution No. 6 of 2010 approves its implementing bylaw.

The Interim Real Property Register records legal dispositions concerning off-plan real property units. The developer must apply for registration of the legal disposition within the applicable time limit. Even where the application is submitted after that time limit, the Dubai Land Department must register the disposition in the Interim Real Property Register and impose the prescribed fine on the developer.

Registration should not be confused with final registration of the completed apartment on the Real Property Register. Under Article 7 of Executive Council Resolution No. 6 of 2010, once the project is completed and a completion certificate has been obtained, the developer may not refuse to hand over the unit or register it in the purchaser’s name on the Real Property Register, provided the purchaser has fulfilled all contractual obligations. This obligation also applies where the purchaser owes the developer financial dues unrelated to the sale agreement for that unit.

The same provision requires registration of the unit and facilities allocated to it, such as car parks, in the purchaser’s name. If a developer refuses to register the unit despite the purchaser having fulfilled contractual obligations, the Dubai Land Department may register the unit in the purchaser’s name upon the purchaser’s request or on its own initiative.

Law No. 8 of 2007 also gives depositors or their representatives the right to access their own accounting records and request copies. This is relevant to buyers who need records concerning their own payments into the escrow structure.

What the law requires before off-plan units can be sold

Not every proposed project can lawfully begin marketing or selling off-plan units at any time. Executive Council Resolution No. 6 of 2010 provides that a master developer or sub-developer may not commence implementation of a project or sell off-plan units unless the developer has possession of the land and a demarcation certificate, has actual control of the project land, and has the approvals required from competent entities to commence implementation.

The same Resolution states that an off-plan legal disposition made before approval of the project commencement by competent entities and registration of the project with the Dubai Land Department is null and void. Developers that wish to sell units off-plan must also operate within the escrow-account framework under Law No. 8 of 2007.

Law No. 8 of 2007 requires a developer wishing to sell off-plan units to apply to open an escrow account. The application includes, among other matters, land documentation, approved initial designs and engineering plans, a certified financial statement of estimated project costs and revenues, an undertaking to begin construction after the relevant approval, and a standard sale contract between developer and purchaser.

The law also requires developers engaged in real estate development to be recorded in the Register of Real Estate Developers and licensed by the competent entities. A developer may not advertise off-plan units in local or international media, or participate in exhibitions to promote such sales, without written authorisation from the Dubai Land Department.

As a practical review step, a buyer can use available services to check project status, including project completion percentage and project details, and to view approved developers and licensed brokers. This does not replace reading the specific contract, but it helps the buyer distinguish a project-level verification from sales statements about payment-plan terms.

Buying with a mortgage in Dubai: how it differs from developer finance

There is mortgage financing in Dubai, but a mortgage is not the same as buying an apartment in instalments directly from a developer. With a mortgage, the financing institution assesses the applicant and the property under its own procedures. The lender’s requirements can differ for residents, non-residents, UAE nationals and foreign buyers, and may change over time.

Questions such as “Dubai mortgage for Russians”, “mortgage in Dubai for foreigners”, “mortgage for non-residents in Dubai”, “Dubai mortgage for residents” and “can I buy an apartment in Dubai with a mortgage?” cannot be answered with one universal rule. Eligibility and terms depend on the financial institution and the particular transaction. The same applies to questions about mortgage interest, mortgage rates, deposit requirements, mortgage calculators and Islamic mortgage products.

A buyer considering a bank mortgage should separate three sets of obligations:

• The purchase obligations in the property sale agreement.

• The registration and transaction requirements for the property.

• The financing obligations in the agreement with the bank or other finance provider.

Where a developer mortgages a project to obtain a loan from financing institutions or companies, Article 13 of Law No. 8 of 2007 requires those institutions or companies to deposit the loan amount in the relevant escrow account. That project-level rule does not set the terms of an individual buyer’s mortgage.

Buyers should avoid assuming that a developer will automatically accept mortgage proceeds at any stage, or that a bank will automatically finance an off-plan, completed or post-handover purchase. The relevant developer, sale agreement and finance provider determine whether a particular payment route is available.

Contract points to review before paying an instalment

The sale agreement is central to a developer payment plan. It should identify the unit, the agreed price, the payment schedule and the obligations of both purchaser and developer. The buyer should retain the signed agreement, payment confirmations, registration records and correspondence related to changes in dates or payment instructions.

Article 8 of Executive Council Resolution No. 6 of 2010 provides that a master developer or sub-developer may not charge purchasers amounts other than those approved by the Dubai Land Department in return for a legal disposition of their real property units. Article 9 states that, unless otherwise agreed, the developer and purchaser must pay prescribed registration fees for legal dispositions according to their respective shares under applicable legislation.

The stated area should also be read carefully. The Resolution adopts the net area of the unit for registration purposes. Unless otherwise agreed, area exceeding the sold unit’s net area is not taken into account and the developer may not claim payment for that excess. If the actual net area is more than five percent less than the net area in the agreement and plan, the developer must compensate the purchaser; the compensation is calculated based on the agreed unit price.

Buyers should also check whether the schedule is expressly linked to construction milestones. Article 20 of Executive Council Resolution No. 6 of 2010 allows a purchaser to resort to the competent court to seek termination in specified situations, including where the developer declines to link payments to construction milestones proposed by RERA. It also lists material deviation from agreed specifications and material construction defects making the unit unfit for use after handover among the circumstances stated in that article.

This is a description of the framework, not a substitute for reviewing the signed documents for a particular unit. The agreement may contain transaction-specific terms that are important to the buyer’s payment obligations.

Late payments, default and project cancellation

A developer instalment plan creates payment obligations for the buyer. If a purchaser fails to fulfil obligations under the sale agreement, Article 15 of Executive Council Resolution No. 6 of 2010 requires the developer to serve notice requesting fulfilment. The notice may be served in person before the Dubai Land Department or in writing through registered mail or email, with a copy provided to the Department.

The Dubai Land Department must give the purchaser a grace period of 30 days from service of the notice. If the purchaser does not fulfil contractual obligations within that notice period, the developer may take actions specified in Article 15. The available action and the maximum amount that may be retained depend on the project’s completion percentage.

• Where at least 80% of the project is complete, the developer may retain all amounts paid and may seek sale of the unit by public auction to settle remaining amounts, or terminate the agreement and retain up to 40% of the unit price.

• Where at least 60% of the project is complete, the developer may terminate the agreement and retain up to 40% of the unit price.

• Where less than 60% of the project is complete, the developer may terminate the agreement and retain up to 25% of the unit price.

• Where implementation has not commenced for reasons beyond the developer’s control, the developer may terminate the agreement and retain up to 30% of amounts paid by the purchaser, subject to the conditions in the Resolution.

For these purposes, the completion percentage is confirmed by a technical report issued by a consultant approved by RERA following an on-site inspection. If the developer retains amounts under Article 15, the remaining amounts must be refunded no later than one year from termination or within 60 days from sale of the unit, whichever occurs earlier.

If RERA cancels a project, it appoints a certified auditor to review the project’s financial position, including amounts paid to the developer or deposited in the project escrow account and amounts expended. The escrow agent, or the developer where payments were not made through the escrow account, must refund amounts due to entitled parties within the period specified in Article 25. Where escrow funds are insufficient, the developer must refund amounts owed within 60 days from the cancellation decision unless RERA extends the period for valid reasons.

Frequently asked questions about apartments in Dubai on instalments

Can I buy an apartment in Dubai in instalments?

Yes. Developers may offer instalment schedules for off-plan apartments. The actual payment plan, price allocation and dates depend on the project and sale agreement.

Is a developer payment plan the same as a mortgage in Dubai?

No. A developer plan is a payment schedule under the sale agreement. A mortgage is financing provided by a bank or other finance institution under a separate finance arrangement.

What is Oqood in Dubai property?

Oqood is the term commonly used for registration of off-plan property dispositions in the Interim Real Property Register regulated by Law No. 13 of 2008.

Do off-plan instalments go to the developer directly?

Law No. 8 of 2007 requires payments by purchasers of off-plan units to be deposited into the escrow account of the relevant project. Payment instructions should be checked against the project documentation.

What does a 60/40 payment plan mean in Dubai?

It generally describes a proposed split of the purchase price between payments before handover and a remaining balance at or after handover. The exact dates, milestones and obligations are set by the sale agreement.

Can a foreigner get a mortgage in Dubai?

Mortgage availability for foreigners, residents and non-residents depends on the individual lender, its current criteria and the specific transaction. It is separate from a developer instalment plan.

What happens if I miss an instalment to a Dubai developer?

The developer must follow the notice procedure in Executive Council Resolution No. 6 of 2010. The Dubai Land Department gives a 30-day grace period, and potential termination or retention consequences depend on the project completion percentage and the applicable contract.