Buying a Dubai resale with a mortgage: the MOU clause that protects your 10% deposit

A Dubai resale deal opens with a Memorandum of Understanding — the MOU, or DLD's standard Form F. Buyer, seller and their agents sign it, and from that point the buyer puts down a security deposit, usually 10% of the price, held by the seller's agency until the deal registers. Walk away without a contractual reason and the deposit goes to the seller. On a 1.5 million-dirham flat, that is AED 150,000.

Why a mortgaged buyer needs an extra clause

A cash deal can only fall apart because of the buyer. A mortgaged one brings in a third party — the bank — whose decision the buyer does not control. The bank can decline after the MOU is signed: the valuer comes in below the agreed price, the buyer's income situation changes, a new loan pushes total debt past the 50% income cap. Standard Form F does not protect against this on its own — without a financing clause, a seller can treat a bank decline as the buyer's own default.

The fix is a line in the additional-terms section of Form F, roughly: "This transaction is conditional on the buyer securing mortgage financing of not less than [amount]. Upon written refusal by the bank, the contract is terminated and the deposit returned to the buyer in full."

What the clause needs to specify

• Loan amount or financing share. Not "subject to mortgage approval" in general — a concrete figure, say 75% of price. Otherwise the bank can approve a lower amount and a dispute follows over whether that counts as approval.
• A deadline. The date by which final approval must be obtained. Three to four weeks is a reasonable window.
• What counts as a refusal. A bank letter declining or unable to approve financing. A verbal "the bank probably won't lend" is not enough.
• A low valuation. Spell out separately what happens if the bank's valuer comes in under the agreed price: the buyer can top up in cash, walk away without penalty, or renegotiate with the seller.

The sequence that keeps the deposit safe

1. Pre-approval before house-hunting: the bank states the amount and terms up front, so expectations are set correctly.
2. Choose a property, sign the MOU with the financing clause and the 10% deposit.
3. Bank valuation and final approval.
4. NOC from the developer, a payoff letter from the seller's bank if the unit is mortgaged.
5. Registration at the Trustee Office: the buyer's bank transfers funds, a new title deed is issued.

Pre-approval does not guarantee final sign-off, but it removes the biggest risk — discovering a mismatch with the bank's requirements only after signing. On requirements and upfront cash, see our breakdowns of eligibility for a Dubai mortgage and what it costs beyond the rate.

If circumstances change after the MOU

A common scenario: the buyer loses their job between the MOU and the final application. With a financing clause and a bank letter, the deposit comes back, even if it takes negotiation with the seller. Without the clause, it is entirely down to the seller's goodwill. Sellers tend to accept the clause without much pushback — it gives them a defined deadline and a clear exit trigger instead of open-ended uncertainty.

Work out the payment and cash needed for a specific unit on our Mortgage in Dubai page.