Guide · updated 31.07.2026 · 13 min read · Lucent Legal team

What Can Go Wrong When You Buy Property in Dubai

The ads promise a tax-free goldmine, and the forums are full of horror stories about frozen escrow accounts and lost deposits. The truth, as usual, sits in between: Dubai's property market runs on real laws and real regulators (DLD, RERA), which doesn't erase project-specific risk or the extra banking friction that certain nationalities and residency statuses now face in 2026. Here's what can go wrong at each stage — from picking an off-plan project to reselling it years later — and what to actually check before you sign, not after.

Off-Plan Risk: Delays and Frozen Projects

Buying under construction (off-plan) is the most talked-about source of risk in the Dubai market, and for good reason: the handover date in your Sale and Purchase Agreement (SPA) is a target, not a guarantee, and almost every contract carries a grace period on top of it. If a project is delayed, stalled, or formally cancelled by RERA, buyers do have a process — from a RERA complaint up to a dedicated tribunal for cancelled projects — but a process is not the same as a fast, full refund. A detailed step-by-step breakdown, including withholding percentages and timelines, is in the separate guide on off-plan handover delays.

Worth keeping in mind even without a formal delay: an off-plan project carries real risk that finishes, final layout, or timeline drift from what was in the developer's launch brochure. Check details against the legally binding SPA, not the marketing material.

Vetting the Developer and Escrow Status Before You Commit

As of late January 2026, DLD's register lists more than 2,200 licensed developers, ranging from major master-developers to small specialist firms. A detail many buyers miss: a developer being registered does not mean every one of their projects is registered too — RERA issues a separate permit per project, and both statuses need checking independently through the Dubai REST app or the DLD portal.

Separately, check the specific project's escrow account number: the law requires developers to receive buyer money only into that account, under a trustee's control — not into the company's operating account, not through an agent, and not through any third party. A detailed checklist — developer reputation, track record of completed projects, escrow status — is in the guide on checking a developer's escrow status.

For ready (non-off-plan) property, the priority shifts to verifying the title deed — also through DLD or Dubai REST — before signing any deposit agreement.

Hidden Costs: DLD's 4%, Registration Fees, and Service Charges

The listing price is not the final transaction cost. The main mandatory payments:

• DLD transfer fee — 4% of the property price. Officially split 2%/2% between seller and buyer, but market practice is that the buyer pays the full 4%.
• DLD registration fee — AED 4,000 + 5% VAT (AED 4,200 total) for properties AED 500,000 and above; AED 2,000 + 5% VAT (AED 2,100 total) below that.
• Agent commission, if you're buying through a broker — a separate, negotiated cost, not part of the DLD fees.
• Service charge — an annual building maintenance fee set by RERA per building and published in the public Service Charge Index (on the DLD site and in the Dubai REST app). Per that index, the range runs AED 3-30 per sq ft per year — usually AED 12-25 for apartments and AED 3-7 for villas/townhouses. This isn't a one-off cost — it's an annual cost for as long as you own the unit, so build it into your return calculation up front, not after the first invoice.

Several industry sources put total costs on top of the purchase price at roughly 7-10% overall, once fees and commissions are counted — the exact figure depends on the property price, whether there's a mortgage, and whether an agent is involved.

Sanctions and Banking Friction for Russian Buyers

This block is specific to Russian buyers and doesn't show up in general market guides. Per industry sources as of 2026: owning UAE property is not itself covered by Western sanctions regimes against individuals holding Russian citizenship, and the title is registered to the buyer regardless of the origin of the payment or which bank processed it.

The friction isn't in the title — it's in processing the payment itself and later moving money back out:

• UAE banks, per sector reports, have visibly tightened source-of-funds checks specifically for holders of Russian passports, asking for more documentation than they'd require from buyers of most other nationalities.
• DLD and banking-sector regulators have added extra source-of-funds verification steps for large transactions.
• In practice, 2024-2026 deals most often go through as cash purchases from accounts outside Russian banks; a handful of banks retain international payment connectivity for AED transfers, but the specific working payment routes change quickly and aren't any kind of legal guarantee.
• Withdrawing funds on a later resale goes through the same KYC filters in reverse — worth planning for in advance, not at the moment you actually need the money.

Worth being honest here: this area shifts faster than any guide can stay current — the specific bank, the specific amount, and the specific transfer method need a dedicated check with a lawyer and the bank's compliance team right before the deal, not from a general article online.

Inheritance Without a Will

An underrated risk: what happens to the property if the owner dies without a will. Since 1 February 2023, non-Muslims in the UAE default to Federal Decree-Law No. 41 of 2022 on civil personal status, not Sharia — the baseline split without a will is 50% to the surviving spouse, the rest divided equally among children regardless of gender. That default split is statutory, meaning it may not match how you'd actually want the asset distributed — and the deceased's accounts and assets get frozen pending a court order regardless of whether a will exists.

For what applies by default in different family situations, and how the court process actually runs, see the separate guide on inheritance in the UAE without a will. Registering your own will (notably through the DIFC Wills Service Centre) lets you distribute the asset as you choose — details in the guide on DIFC wills.

Resale and Liquidity

Demand at an off-plan project's launch is not the same thing as liquidity two or three years later. Per Q1 2026 market reviews, resales within the off-plan segment fell to 8.3% of all off-plan transactions, down from 15.7% a year earlier, and secondary-market transaction volume for ready properties dropped 39% year-on-year in April 2026. Meanwhile, primary sales straight from developers made up 91.7% of off-plan transactions in the same quarter — a large share of the market is being driven by new launches, not resale of existing units.

That doesn't mean you can't resell — but before buying, the honest question isn't "is this project selling right now" but "who buys this from me in a few years" — especially if the plan is a short-term exit rather than long-term ownership. Prices, meanwhile, were rising over the same period (sources put the average off-plan price per sq ft in Q1 2026 at around AED 2,030, up roughly 12% year-on-year) — price growth and ease of resale are two different things, and it's worth not conflating them.

Legal Due Diligence Checklist Before You Buy

• Check the developer's RERA registration AND, separately, the RERA permit for this specific project, via Dubai REST or the DLD portal.
• For off-plan, verify the project's escrow account number directly with DLD — not on the word of an agent or the developer.
• For ready property, order a title deed check before putting down any deposit.
• Have a lawyer review the SPA or sale contract before you sign — pay particular attention to grace period, force majeure, and withholding-on-termination clauses.
• Budget for more than the listing price: the 4% DLD fee, the registration fee, agent commission, and the specific building's annual service charge from the DLD index.
• If cross-border payment or sanctions exposure applies to you, work out the payment and future withdrawal route with your bank and lawyer in advance, not after the fact.
• Register a will (notably through DIFC) if you don't want the asset distributed under the statutory default.

This material is for information only and is not legal advice. UAE law changes — a lawyer will assess how it applies to your situation.