Most resale property transactions in Dubai are recorded on Form F, the standard Dubai property sale agreement issued through the Dubai Land Department, and most are secured by a deposit cheque for 10% of the price. When a buyer later wants out, sellers and brokers tend to treat that deposit as lost. Many buyers assume the same.
The legal position is more careful than that. Whether the seller keeps the deposit depends on the wording of the signed Form F, on the reason the sale did not complete, and on how the law classifies the deposit. A Dubai property contract cancellation is rarely as simple as one side walking away and the other keeping the cheque.
What Form F Says About Buyer Default
Under the standard terms, if the buyer fails to complete the transfer by the agreed date because of the buyer’s own act or omission, the seller may end the sale and claim the deposit. That is the rule everyone quotes, and it is the starting point for any claim of buyer default in a Dubai property sale.
Two points are usually left out. The clause is triggered by default, meaning an unjustified failure to perform, and not by the bare fact that the sale did not go through. And the form works in both directions: where it is the seller who fails to complete, the buyer is entitled to the return of the deposit and may claim compensation.
There is also a practical point. The deposit cheque is normally held by the broker, who should not release it to either side without written instructions from both. A seller or broker who announces that the deposit is “forfeited” has not decided anything. If the buyer disputes it, the question goes to settlement or to the court.
Buyer Default Has to Be Proven, Not Assumed
In most Form F disputes nobody argues about whether the sale completed. The argument is about why it did not.
A seller’s claim is strongest where the seller was ready and able to transfer on the agreed date, with the developer’s NOC issued, arrangements in place to clear any mortgage on the unit and a clean title, and the buyer simply did not proceed. It is much weaker where the seller was not in a position to perform: the NOC was never obtained or had expired, there were undisclosed liabilities on the unit such as an existing mortgage or unpaid service charges, there was a defect in the title, or the seller could not attend the transfer within the contract period. A buyer who holds back in those circumstances may not be in default at all.
The Civil Transactions Law supports this. Article 221(1) of Federal Decree-Law No. 25 of 2025, in force since 1 June 2026, requires a contract to be performed in accordance with its contents and in a manner consistent with good faith. A Form F signed before that date generally remains under the previous law, Federal Law No. 5 of 1985, where Article 246(1) says the same. A seller who was not ready to complete cannot use the buyer’s non-completion to keep the deposit and so profit from its own failure.
Earnest Money or Agreed Compensation?
Even where the buyer is in default, it does not follow that the seller keeps the full 10%. That depends on how the deposit is classified, and it is the point on which many of these cases turn.
If the deposit is earnest money (arboun) agreed as the price of withdrawing from the sale, the party who paid it loses it on withdrawal, and a party who received it and withdraws must return it together with an equal amount. No loss has to be proven. This is Article 137 of the new law and Article 148 of the 1985 law.
If the clause is instead agreed compensation for breach, the court can look at the real loss. Under Article 390 of the 1985 law the judge could, in all cases, adjust the agreed amount to match the loss. Article 340 of the new law keeps the power to reduce but defines it: the court may reduce the agreed sum where the defaulting party shows that it is excessive, where the obligation was partly performed, or where the other party’s own fault contributed to the loss. A seller who has resold quickly at the same or a better price is in a different position from one who has truly lost the value of the deal.
Which category applies turns on the wording of the particular Form F and its additional conditions. Where the form ties forfeiture to the buyer’s breach, rather than giving either party a paid right to withdraw, the buyer has a real argument that the clause is agreed compensation and open to reduction. Sellers should expect that argument, and buyers should know it exists.
When Financing Falls Through
Many buyers rely on a mortgage, and many disputes begin when the bank declines, delays, or values the property below the agreed price.
The first question is what the Form F says. If the additional conditions make the sale subject to finance approval or to the bank’s valuation, and that condition is not met, the buyer may be entitled to withdraw and recover the deposit on the terms of the condition. If there is no such condition, the financing risk generally sits with the buyer. A bank’s refusal or delay is not the seller’s fault, and it does not by itself release the buyer from completing.
Evidence of diligence still matters. Application dates, the pre-approval and final offer letter, the valuation report and the correspondence with the bank show that the buyer acted promptly and in good faith. That will not turn a default into something else, but it can support a request for more time, a negotiated exit, or a reduction in what the seller is allowed to keep. A buyer using finance should have the condition written into the Form F before signing, not argued after the event.
The Deposit, “Cancellation Fees” and Who Can Claim What
Clients often ask what the Dubai property cancellation fees are once a Form F is signed. There is no fixed schedule of fees. What is at stake is the deposit, the brokers’ commission if the form makes the defaulting party liable for it, and any further compensation the other party can prove.
Where the buyer is truly in default, the seller can claim the deposit. A claim for more than the deposit is possible but harder, and under Article 340 of the new law it requires fraud or gross fault on the part of the defaulting party. Where the seller is in default, or the fault is shared or unclear, a Dubai property deposit refund, in full or in part, is a realistic claim. In every case, an assertion is not an outcome. Neither party can award itself the deposit.
The Dubai Land Department’s Real Estate Brokerage Practice Guide provides an amicable settlement process for Contract F disputes through the Real Estate Regulatory Agency, and states that if no amicable solution is reached the parties must resort to the judicial authorities. In practice that means the Dubai Courts.
Can a Buyer Simply Walk Away and Expect a Refund?
No. A buyer who changes their mind, with a seller ready to transfer, no finance condition in the contract and no problem with the property or the title, should expect to lose the deposit or a large part of it. The Form F places that risk on the buyer, and the Dubai Courts enforce it where the facts show a real default.
The position changes only where the buyer can point to a solid reason: the seller’s own conduct, a condition in the contract, or the true extent of the seller’s loss.
Why Documents Decide These Disputes
Form F disputes are decided on paper. The court will look at the signed Form F and its additional conditions, any addendum extending the dates, the NOC and its validity, the mortgage liability and clearance letters, the messages between the parties and the brokers about readiness and transfer appointments, and, for a finance buyer, the bank’s file. Often the most important single question is whether the seller was in fact able to transfer on the contractual date.
Care is also needed over what is put in writing, including by brokers on a party’s behalf. A message saying that the buyer “no longer wishes to proceed” may later be read as a withdrawal, whatever was intended.
Parties who assume the deposit clause will be applied exactly as printed, without testing what actually happened, often end up in a weaker position than they expected. That is as true for sellers as it is for buyers.
Protecting Your Position Before the Dispute Escalates
A signed Form F is a binding contract, but the deposit clause does not automatically favour whoever acts first. A buyer seeking a refund and a seller seeking to keep the deposit need the same thing: an early, honest review of the contract wording, the timeline and the evidence, ideally before positions are taken in writing.
At DY Lawyers and Legal Consultants, we advise buyers and sellers on Form F disputes, deposit claims and the enforcement of property sale agreements in Dubai, and we work with licensed UAE advocates for representation before the Dubai Courts. If your sale has stalled or your deposit is in dispute, contact us to discuss your options.
This article is general information on the law as at September 2026 and is not legal advice. The outcome of any dispute depends on the contract and the facts.
