Administrative Resolution No. (165) of 2025 was issued by the Head of the Department of Municipalities and Transport pursuant to Article 17(3) of Law No. (3) of 2015 Regarding the Regulation of the Real Estate Sector in the Emirate of Abu Dhabi (the “Real Estate Law”). The Resolution establishes a comprehensive framework governing the percentages, procedures, and timelines applicable to the refund of amounts paid by buyers in respect of off-plan real estate units that are to be written off from the initial register and resold by the developer to a new buyer.
It sets out the obligations of the Abu Dhabi Real Estate Centre (“ADREC”), developers, escrow account trustees, and mortgaged creditors in connection with such write-off and resale transactions, and prescribes a graduated compensation schedule calibrated to the stage of project construction at the time of write-off.
Write-Off and Resale Procedures. Upon a developer’s request, ADREC will write off the unit from the initial register, notify the buyer and any mortgaged creditor within five working days, issue a payment order to the escrow account trustee for refund of amounts due, and send a written letter to all parties specifying the total amounts to be returned.
Compensation Percentages. The compensation that the developer may deduct from escrow account funds is determined by the stage of project construction, subject to what the parties may have agreed upon in the sale and purchase contract. The schedule is as follows:
| Construction Phase | Developer’s Compensation |
|---|---|
| No construction commenced (for reasons beyond the developer’s control, without negligence or default) | Full refund of all amounts to the buyer, whether received in escrow or outside of it |
| Less than 10% completion | 10% of the sale contract value deducted; excess returned to buyer |
| More than 10% up to 30% completion | 15% of the sale contract value deducted; excess returned to buyer |
| More than 30% up to 60% completion | 25% of the sale contract value deducted; excess returned to buyer |
| More than 60% up to 100% completion | 40% of the sale contract value deducted; excess returned to buyer |
Where the buyer has paid 60% or more of the unit value, ADREC has the discretion to determine the compensation percentages without being bound by the above schedule.
Refund Timelines. The escrow account trustee must return amounts due to the developer within 15 business days of receiving the developer’s request with the prescribed ADREC form. The buyer’s balance must be returned within 15 business days of receiving the buyer’s request, accompanied by a no-objection letter from any mortgaged creditor. Where the developer has received any amounts outside the escrow account in violation of the Real Estate Law, such amounts must be refunded in full to the buyer within 30 days of receiving ADREC’s notification, before the developer may receive any amounts from the escrow account.
Implications for Stakeholders. For buyers, this resolution provides a transparent and predictable refund framework that ensures they recover a defined portion of their investment in the event of unit write-off, with additional protection where payments have been collected outside the escrow account. For developers, the graduated compensation scale provides certainty regarding the amounts they may retain to offset costs already incurred, though the percentages may be adjusted by ADREC where the buyer has paid 60% or more. For financial institutions acting as escrow account trustees, the resolution imposes clear procedural obligations and strict timelines for the disbursement of funds, requiring careful coordination with ADREC and all parties involved. For mortgaged creditors, the requirement for a no-objection letter before the buyer’s refund is processed safeguards their security interests.
In conclusion Administrative Resolution No. (165) of 2025 represents a significant step toward enhancing transparency and predictability in the Abu Dhabi off-plan real estate market. By codifying a graduated compensation framework tied to construction milestones, establishing clear procedural obligations for all parties, and imposing defined timelines for the disbursement of refunds, the Resolution strikes a balance between protecting buyers’ financial interests and affording developers reasonable recourse to recover costs incurred. The grant of discretionary authority to ADREC where the buyer has paid 60% or more of the unit value further ensures that equitable outcomes may be achieved in cases where rigid application of the prescribed percentages would be inappropriate. Stakeholders engaged in off-plan real estate transactions in the Emirate of Abu Dhabi should ensure that their contractual arrangements and internal processes are aligned with the requirements of this Resolution.
Key Contacts
David Bowman, Of Counsel, d.bowman@tamimi.com
Kirsty De Sousa, Senior Knowledge Lawyer, K.Sousa@tamimi.com
Raneem Salha, Trainee Solicitor, R.Salha@tamimi.com