In early 2026, Abu Dhabi's Department of Municipalities and Transport (DMT) issued four key administrative decisions implementing Law No. 3 of 2015 Concerning the Regulation of the Real Estate Sector in Abu Dhabi, as amended by Law No. 2 of 2025 (Real Estate Law).
What investors, developers, and buyers need to know
These decisions address four distinct areas: escrow account management prior to project milestones; the governance of jointly owned property and shared facilities; the standardisation of owners’ committee bylaws; and the compensation and refund regime applicable where off-plan purchasers default on their contractual obligations. Taken together, they reflect Abu Dhabi's continued commitment to a real estate sector that is well-regulated, transparent and resilient. They look to safeguard the interests of buyers and investors, whilst providing developers and market participants with the clarity and predictability they need to operate with confidence.
We set out below a decision-by-decision analysis and our assessment of the key practical implications.
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Early escrow disbursement for off‑plan projects - Abu Dhabi Administrative Decision No. (24) of 2025
The Real Estate Law requires developers to maintain project-specific escrow accounts into which purchaser payments are deposited and prohibits developers from drawing funds until at least 20% of construction has been completed.
Decision No. 24/2025 introduces a mechanism by which the Abu Dhabi Real Estate Centre (ADREC) may approve disbursements from a project escrow account before the standard 20% construction completion threshold is reached, provided that:
- the developer provides an unconditional, irrevocable bank guarantee of no less than 20% of the total construction cost, ensuring that purchasers’ deposited funds are backed by enforceable security in the event of project disruption or developer insolvency; and
- disbursements are accompanied by approved cost estimates, providing ADREC with a transparent basis on which to assess the legitimacy and proportionality of each drawdown request.
Eligibility is restricted to developers registered in Abu Dhabi for at least four years, with a track record of delivering at least three completed projects on time and a clean regulatory record in the 12 months prior to application. The guarantee must be maintained and topped up where required (including following any draw or increase in construction costs) and is released upon full project completion, or earlier where the developer can demonstrate at least 60% construction progress and sufficient escrow funds to complete the remaining works.
From a transactional perspective, lenders providing development finance should note that the bank guarantee requirement may interact with existing security arrangements. Developers will need to ensure that guarantee structures satisfy ADREC’s requirements without inadvertently creating conflicts with pre-existing lender security packages.
2. New regulatory framework for jointly owned properties - Abu Dhabi Administrative Decision No. (25) of 2025
Decision No.25/2025 establishes a comprehensive regulatory framework for the ownership, management and operation of jointly owned real estate developments in Abu Dhabi.
The Decision defines the rights and obligations of three key parties in any jointly owned development;
- Developers: Developers are subject to mandatory disclosure obligations for off-plan sales with liability for materially inaccurate or incomplete pre-sale disclosures for two years from the date of transfer;
- Property owners: Property Owner's rights of use and service charge obligations are more strictly regulated. Service charges are strictly controlled, unapproved fees are prohibited and fee payers have a statutory right of recovery. Annual service fees must be paid in monthly or quarterly instalments and cannot be demanded as a single lump sum. Unpaid service charges constitute a preferential right over the relevant unit that survives any change of ownership; and
- Management companies: Management Companies must be ADREC-accredited and appointed within 30 days of delivery of the first unit to its owner, with their authority governed by strict controls on service charges, mandatory electronic management and accounting systems, and ongoing reporting obligations to ADREC on a six-monthly basis.
The Decision consolidates existing legislative provisions and signals Abu Dhabi's intention to align its jointly owned property market with international best practice, providing greater protection and certainty for all stakeholders. Developers and property management companies should review existing management and service agreements to ensure compliance with the new framework and the clarified scope of responsibilities under this Decision.
3. Unified bylaws for owners’ committees - Abu Dhabi Administrative Decision No. (26) of 2025
Decision No. 26/2025 approves a unified bylaw applicable to all owners’ committees operating within Abu Dhabi.
- Formation and membership: Once at least 30% of units in a development are registered to multiple owners, a committee of between five and nine resident unit owners must be formed with developers expressly excluded from membership, even where they own unsold units. Members are elected through a secure, fully electronic voting process on a one-owner-one-vote basis (regardless of how many units they own), and ADREC must approve all elected members.
- Governance and oversight: ADREC retains the power to dissolve the owners committee or remove members, and to oversee its relationship with management companies; and
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Role and competencies: The owners committee's role is supervisory, not executive, it reviews budgets, monitors the management company's performance, and can request that DMT compel a change of management company where there is evidence of negligence or poor service.
The bylaws establish a structured and transparent democratic governance mechanism for jointly owned developments, whilst ensuring that regulatory oversight by ADREC remains paramount throughout. Developers must ensure newly formed owners’ committees comply with the unified bylaw from the outset, and management companies must align their contractual arrangements with the defined scope and authority of those owners committees.
4. Compensation and refund rules for off-plan cancellations - Abu Dhabi Administrative Decision No. (165) of 2025
Decision No. 165/2025 determines the financial consequences that follow where a purchaser defaults on their contractual obligations under an off-plan sale agreement, leading to the cancellation and subsequent resale of their unit by the developer.
The Decision provides three key elements of regulatory certainty in this area:
- Compensation framework: If the project has not yet started for reasons outside the developer's control, the purchaser receives a full refund. As construction advances, developers may retain a graduated portion of the purchase price (typically from 10% in early stages up to 40% where completion reaches 60–100%), with ADREC retaining discretion to determine retention on a case-by-case basis where a purchaser has paid 60% or more.
- Refund timelines: Refunds (after deduction of permissible compensation) must be processed within 15 working days, whilst any amounts collected outside the escrow account in breach of the law, must be refunded within 30 days of the cancellation notice and before the developer receives any funds from the escrow account.
- Procedural compliance: Specific steps that must be followed by developers in processing cancellations and resales, including notification and documentation obligations.
The absence of a clear and consistently applied compensation and refund framework had previously created uncertainty for both developers and purchasers navigating defaults and cancellations. Developers should review their standard form off-plan sale agreements to ensure compliance with the Decision’s requirements.
Taken together, the four Decisions represent a coordinated and comprehensive regulatory intervention across all stages of the Abu Dhabi property development and management cycle. Against the backdrop of Abu Dhabi's continued market growth, rising transaction volumes and strong investor appetite from both domestic and international markets, the Decisions introduce greater structure around off-plan sales, developer obligations, broker conduct, and escrow arrangements. The Decisions enhance market efficiency and reinforce Abu Dhabi's position as a credible and attractive destination for serious, long-term real estate investment while providing developers with a clearer, more consistent regulatory framework within which to operate.
