What Happens If an Off-Plan Developer Goes Bankrupt in Dubai?

Developer Default Protection

• What happens if the off-plan developer goes bankrupt during construction?

  If an off-plan developer in Dubai goes bankrupt, the Dubai Land Department (DLD)and RERA(Real Estate Regulatory Agency) step in to protect buyers. The project may be transferred to another registered developer or placed under DLD's supervision for completion. Since buyer funds are held in a regulated escrow account, your money is safeguarded and cannot be accessed freely by the bankrupt entity. 

• Will I lose my money if the off-plan developer defaults or shuts down?

  Not necessarily. Under Dubai’s Escrow Law, your payments are protected in a dedicated project escrow account, which can only be used for construction-related costs. If the developer defaults, the escrow balance is used by RERA to either refund buyers or appoint a new developer to complete the project.

• How can I check the financial stability of an off-plan developer before investing?

  Before investing, verify the developer's RERA registration, review their track record, and use the Dubai REST app or DLD website to check past project completions and delays. Financial strength and delivery history are key indicators of long-term reliability.

• Can a new developer take over a bankrupt off-plan project in Dubai?

  Yes. If a developer goes bankrupt, RERA may transfer the project to a new, qualified developer. This process includes re-evaluating construction progress, escrow account balances, and legal requirements to ensure continuity and buyer protection.

• What should I do as a buyer if the off-plan construction suddenly stops?

  If construction halts unexpectedly, contact RERA or the DLD to report the issue. You can track progress through the Dubai REST app and request updates. The regulatory authorities may investigate and take necessary action, including freezing funds, refunding, or assigning a new developer.