Orion Real Estate Development developer profile: eight clauses to read in a Dubai off-plan contract

An off-plan contract in Dubai is standard in form and very varied in substance. Eight provisions determine almost everything that can go wrong. Those are the ones to read, even if you skim the rest.

The eight clauses

1. The escrow account. Is it named, is it tied to the project, which bank holds it? This is your main protection, and it must be in the text, not just in conversation.
2. The payment plan. Is it tied to certified construction stages or to the calendar? A calendar schedule means you are paying for time, not for what has been built.
3. Handover date and grace period. Which date is binding, how many months of extension are allowed beyond it, and from when the delay is counted.
4. Liability for late delivery. What you can do, from when and in what order. Without a delivery track record, this is the only thing you have on timing.
5. Permitted changes. What the developer may change in the project and in your unit without your consent, and within what limits.
6. Area tolerance. How far the actual area may differ from the area sold, whether the price is recalculated, and whether the clause works both ways.
7. Your own default. What notice you will receive, within what period, and what the developer retains at each stage. It is not “all or nothing” but a scale, and you need to know it in advance.
8. Assignment. From what percentage paid it is allowed, with whose consent and for what fee. This decides whether you have an exit at all.

Two clauses buyers rarely ask for — and should

• The specification as an annex. Insist that it forms part of the contract rather than a separate brochure: then “equivalent or better” at least has a reference point.
• The handover and acceptance procedure. How the snagging list is recorded, how quickly defects are fixed, and what happens if you do not sign the handover certificate while items remain open.

The area

Business Bay is central and under continuous construction. New towers are handed over every year and compete directly with yours, and a view of the canal or Downtown can be blocked by a building on someone else’s plot. Check what has been approved between your apartment and the view you are paying for — here that is the most valuable check of all.

What else to do

• Confirm the project registration and Oqood by number.
• Find out who the main contractor is, and their track record.
• Look at the service charge in comparable completed towers nearby.
• Compare rents by orientation: a canal view and an inward view are different markets.

Terms differ between developers. Read your own contract — and for a large sum, with a lawyer who practises in Dubai.