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An off-plan villa in Arabian Ranches III was sold for AED 1,800,000; the purchaser has paid AED 900,000 and then defaulted. At 72% completion the developer terminates and keeps the maximum allowed. How much must it refund?
At 72% the unit is in the 60%-80% tier of Article 11(a)(4)(b) of Law No. 13 of 2008 as replaced by Law No. 19 of 2017 (in force 12 Oct 2026): the developer may keep up to 40% of the unit's contract value. 40% x 1,800,000 = AED 720,000; refund = 900,000 - 720,000 = AED 180,000. Taking 40% of the amount paid (360,000) gives a refund of 540,000, the wrong base; 25% of value (the below-60% tier) gives 450,000, and 30% of payments (the not-commenced tier) gives 630,000. Source: Law No. (13) of 2008, Art. 11(a)(4)(b), as replaced by Law No. (19) of 2017 (in force 12 Oct 2026).
Applying the percentage to the amount paid rather than to the unit's contract value.
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