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A buyer of an off-plan townhouse in Arabian Ranches priced at AED 2,400,000 has paid AED 1,100,000 and then defaults. DLD certifies 66% completion and the developer terminates, retaining the maximum the law allows. What must the developer refund?
Where completion is between 60% and 80%, the developer may terminate and retain up to 40% of the value of the unit stated in the sale agreement, refunding the excess (Art. 11(a)(4)(b), Law No. 13 of 2008 as replaced by Law No. 19 of 2017, in force 12 Oct 2026). Retention: 40% x AED 2,400,000 = AED 960,000; refund AED 1,100,000 - AED 960,000 = AED 140,000. Taking 40% of the amount paid (AED 440,000 kept, AED 660,000 refunded) uses the wrong base; AED 500,000 applies the 25% tier for units below 60% complete; AED 0 borrows the over-80% option of keeping the contract and everything paid, which is not open at 66%. Source: Law No. (13) of 2008, Art. 11(a)(4), as replaced by Law No. (19) of 2017 (in force 12 Oct 2026).
Applying the 40% to the amount paid instead of the unit's contract value.
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