Developers May Now Terminate Off-plan SPAs Without The Need To File Cases In Court: How, When And Why

The newly published Abu Dhabi Law No. (2) of 2025 introduces a transformative contractual remedy in Article 3 that allows a developer, under carefully circumscribed conditions, to rescind an off-plan sale and purchase agreement (SPA) unilaterally, that is without first filing a court case or going to arbitration. This may only be considered when the buyer materially defaults on his contractual obligations. This mechanism represents a deliberate legislative effort to balance commercial efficiency in the Emirate's real estate sector with the preservation of substantive and procedural protections for buyers and mortgagee creditors.

At the heart of the provision lies the recognition that off-plan development is uniquely vulnerable to purchaser default; milestone payments finance construction, delays threaten project viability, and market confidence can be swiftly eroded.