Whether you’re a first-time buyer or a seasoned investor, purchasing a property in Dubai involves more than just choosing the right location and paying the price. One of the most critical documents in the process is the Sales and Purchase Agreement (SPA).
This legally binding contract outlines your rights, obligations, and protections as a buyer. In this article, we’ll break down everything you need to know about the SPA in Dubai real estate, including its contents, legal importance, and tips for reviewing it.
What Is a Sales and Purchase Agreement (SPA)?
A Sales and Purchase Agreement (SPA) is a formal contract between a property buyer and seller (or developer) that sets out the terms and conditions of the property transaction.
The SPA becomes legally binding once both parties sign it and is enforceable under UAE law. It acts as your primary legal protection, especially for off-plan property purchases.
2. When Is the SPA Signed?
The SPA is usually signed after:
- The buyer pays the initial booking amount or reservation fee.
- The developer or seller finalizes all necessary documentation.
- Both parties agree on the terms, including payment plan, handover date, and specifications.
In off-plan purchases, the SPA is signed after the reservation form but before the Oqood registration with the Dubai Land Department.
3. What Does the SPA Include? (Key Clauses)
Here are the essential elements typically found in a Dubai SPA:
a. Property Details
- Project name and location
- Unit number and type (apartment, villa, plot, etc.)
- Floor area and layout
- Parking allocation (if any)
b. Purchase Price and Payment Plan
- Total price
- Booking amount paid
- Remaining installment schedule
- Payment deadlines and late payment penalties
c. Handover Date
- Estimated date of completion
- Conditions under which the handover may be delayed
- Penalties for delay (if applicable)
d. Developer/Seller Obligations
- Deliver property according to approved specifications
- Provide warranties and maintenance upon handover
- Comply with RERA regulations and DLD processes
e. Buyer Obligations
- Timely payment
- Cooperation in document processing
- Acceptance of handover upon completion
f. Force Majeure Clause
Covers unexpected events (e.g., natural disasters, pandemics) that may delay the project or affect performance
g. Termination and Refund Terms
- What happens if the buyer defaults
- Conditions under which either party can cancel the agreement
- Refund policies and forfeiture clauses
h. Dispute Resolution
- Specifies the governing law (UAE law)
- Outlines the jurisdiction (usually Dubai Courts)
- Encourages mediation or arbitration before litigation
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4. Legal Importance of the SPA
The SPA is not just a formality—it is the foundation of your legal rights as a buyer. In case of any disputes or developer delays, your SPA is the first document reviewed by authorities or courts.
RERA and the Dubai Land Department also recognize the SPA as the official proof of sale prior to the issuance of the title deed.
5. SPA in Off-Plan vs. Ready Property Purchases
| Feature | Off-Plan Property | Ready Property |
|---|---|---|
| Parties | Buyer & Developer | Buyer & Seller |
| Document | SPA & Oqood | SPA & Title Deed Transfer |
| Payments | Scheduled by milestones | Full/partial payment upon transfer |
| Handovers | Future date | Immediate or scheduled soon |
| Risk Level | Higher (delays possible) | Lower (completed asset) |
6. What Should You Check Before Signing an SPA?
Before signing your SPA, make sure to:
- Read every clause carefully — don’t skip the fine print.
- Verify project registration with RERA/DLD.
- Confirm the Escrow Account details if buying off-plan.
- Have a legal advisor review the contract.
- Check for any hidden fees or vague language.
- Ensure that penalties and obligations are mutual, not one-sided.
7. Can the SPA Be Amended?
Yes. Both parties can agree to amend certain clauses before signing the SPA. However:
- After signing, changes require mutual consent.
- Amendments must be in writing and signed by both parties.
- Verbal agreements are not enforceable in UAE property law.
8. What Happens After the SPA Is Signed?
Once the SPA is signed:
- The developer or seller will register the sale with DLD or initiate Oqood registration (for off-plan).
- You will begin following the agreed payment schedule.
- You’ll receive construction updates (if off-plan).
- Upon completion, you’ll be notified for handover and final settlement.
- The property will be transferred into your name through DLD.
9. SPA Disputes: What If Something Goes Wrong?
If either party breaches the SPA (e.g., non-payment, delayed handover, or quality issues), you have legal remedies:
- File a complaint with RERA or DLD.
- Request mediation through the Dubai Real Estate Court.
- Seek compensation or refund based on the SPA terms.
- Freeze the project (in rare cases) through regulatory action.
This is why it’s vital that your SPA is detailed, fair, and legally sound.
10. SPA Best Practices for Foreign Buyers
If you’re purchasing property from outside the UAE, follow these tips:
- Always verify the developer and project license.
- Ensure your SPA is translated into a language you understand.
- Appoint a licensed real estate lawyer in Dubai to represent you.
- Ask for digital copies of all documents.
- Confirm all payments go to the Escrow Account, not directly to the developer.
The Sales and Purchase Agreement (SPA) is one of the most important documents in your real estate journey. It safeguards your investment, outlines your rights, and ensures both parties are bound to a clear set of rules.
Whether you’re buying off-plan or ready property, a well-drafted SPA can save you from future headaches and protect your financial interests in Dubai’s real estate market.
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