Abu Dhabi Introduces New Rules Allowing Developers to Cancel Off-Plan Contracts

Authorities in Abu Dhabi have announced significant updates to the emirate's real estate regulations, designed to strengthen its appeal as a global hub for investment.

A major highlight of the updates is the provision allowing developers to terminate off-plan sale and purchase agreements if buyers fail to fulfill their contractual obligations. Developers can now resolve such disputes more swiftly and efficiently without resorting to lengthy court or arbitration processes, provided specific procedures are meticulously followed. According to the Department of Municipalities and Transport (DMT), this change significantly reduces investment risks and streamlines conflict resolution.

These regulatory improvements are part of Abu Dhabi’s ongoing strategy to enhance its global standing in the real estate sector by establishing a more flexible, sustainable, and transparent legislative environment. This environment aims to bolster developers' capabilities, protect investor interests, and anticipate future growth requirements.

Key aspects of the new regulations include:

Unified Legal Framework: A comprehensive framework that governs all real estate-related activities—ranging from sales and registration to evaluation and property management. This integration ensures greater transparency, oversight, and quality control within the sector, including the regulation of previously unregulated professions.

Transition from Owners' Associations to Owners' Committees: Owners' Associations will be replaced by Owners' Committees. These committees, whose formation and operations will be guided by resolutions issued by the DMT Chairman, will serve primarily advisory and supervisory roles.

Enhanced Regulatory Oversight: Specialized management companies will now oversee the operational management of jointly owned properties, promoting sustainable maintenance and improved governance of common areas and shared amenities.

Additionally, the Abu Dhabi Real Estate Centre (ADREC) has been empowered to ensure equitable and transparent interactions among developers, investors, and property owners.

Moreover, a schedule detailing violations and corresponding administrative fines will soon be established through resolutions from the DMT Chairman, pending approval by the Abu Dhabi Executive Council.

These reforms collectively aim to foster a more investor-friendly, transparent, and efficient real estate market, aligning seamlessly with Abu Dhabi’s long-term development vision.