What is Dubai’s Sales & Purchase Agreement (SPA)?
A Sales & Purchase Agreement (SPA) is an essential legal contract binding the buyer and seller in Dubai’s real estate market. Whether purchasing a secondary market property or an off-plan apartment, the SPA protects the rights of both sides and lays out all key terms.
What is an SPA?
As a legally enforceable contract, a sales and purchase agreement (SPA) details the terms and conditions of a real estate sale between a buyer and a seller. It specifies both sides’ obligations, handover date, payment terms, and price.
When is SPA Used in Dubai?
Off-plan property sales: An SPA is signed between the developer and the buyer for properties still under construction. It clearly details the payment plan, expected completion date, and construction milestones.
Secondary market transactions: After drawing up a Memorandum of Understanding (MoU), the SPA is signed in resale transactions of ready properties; usually after the No Objection Certificate (NOC) is acquired from the developer.
Why is SPA Crucial in Dubai Real Estate?
An SPA is crucial when conducting a real estate transaction for several reasons:
It offers legal protection under UAE real estate laws.
It clearly specifies terms of payments, handover, maintenance, and other legal obligations.
It reduces legal conflicts or misunderstandings post-sale and helps prevent disputes.
Key Components of a Sales & Purchase Agreement
For a SPA to fulfil its legal purpose and offer protection to both parties, it must include certain key components.
Parties Involved
It contains comprehensive information about the buyer and seller, or the developer for off-plan properties, in addition to passport copies or Emirates ID and signatures.
Property Details
The details of the property in question must be included, such as the title deed number, plot number, location, floor, and unit size.
Price and Payment Terms
The agreement must outline the full purchase price, deposit, instalment schedule (for off-plan), and handover dates.
Conditions Precedent
Any requirements—such as securing a mortgage, developer’s NOC, or DLD clearance—that have to be met before the agreement is finalised must also be included in the SPA.
Responsibilities of Both Parties
The buyer’s obligation to pay on schedule and the seller’s responsibility to deliver the promised property on time should also be clearly stated.
Completion and Handover
The Sales and Purchase Agreement must highlight the expected handover date, the date of the last payment, and the transfer of ownership procedure.
Amenities and Facilities
To avoid ambiguity and future conflict, it is beneficial to include specifics of what the buyer is entitled to use including community amenities, parking, gym access, swimming pool and other.
Cancellation and Penalty Clauses
Terms must specify the circumstances under which the SPA may be revoked and any penalties that might ensue (e.g., the developer may keep a percentage of the payments made in case an off-plan transaction is canceled).
Dubai Land Department’s (DLD) Role in SPA Transactions
Legal Registration of SPA
All SPAs, especially for off-plan project transactions, must be registered with the DLD using either Dubai REST or the Oqood platform.
DLD Fee Structure
The DLD fee, amounting to 4% of the purchase price, is usually paid by the buyer or sometimes split between buyer and seller. Additional fees include the administrative fee amounting to AED 580 or extra fees for mortgage registration (if applicable) and trustee office services.
Required Documents for SPA Registration
Below are the documents that you need to present upon registering your SPA:
Signed SPA
Passport copies / Emirates ID
NOC from the developer (for secondary properties)
