Ras Al Khaimah’s New Property Law: Key Changes Real Estate Developers Need to Know
New regulations bring changes to off-plan sales, escrow withdrawals, project financing and developer compliance across RAK
Real estate developers operating in Ras Al Khaimah are being urged to review their ongoing projects following the introduction of a new legal framework governing property development in the emirate.
Law No. 10 of 2026 replaces the previous Law No. 12 of 2023 and introduces updated requirements covering off-plan property sales, project registration, escrow management, financing arrangements and relationships between developers. The legislation was issued on 21 July 2026 and is stated to take effect 60 days after its issuance.
The framework applies to real estate development projects throughout Ras Al Khaimah, including those within its economic zones. While it establishes rules for future developments, some provisions also affect existing projects and off-plan sale agreements.
For developers with properties already under construction or units sold to buyers, reviewing current contracts and operational procedures will be important to identify areas requiring adjustment.
Tighter Oversight of Developers and Project Registration
The new legislation brings key regulatory responsibilities under the Department’s oversight structure, covering developer licensing, project registration, escrow supervision and enforcement.
Developers must ensure that the necessary registrations are completed before starting infrastructure works, construction or off-plan sales. The law also introduces specific registration requirements for marketing agreements with accredited property brokers and contracts between main developers and sub-developers.
Compliance failures could have serious consequences. Grounds for removing a developer from the official register include submitting forged documents, promoting fictitious projects and providing financial information that is inaccurate or incomplete. Such removal does not eliminate the developer’s existing liabilities to regulators or third parties.
Companies managing active projects should therefore examine their registration records, broker contracts, financial disclosures and arrangements with other development partners.
New Procedures for Off-Plan Buyer Defaults
The law establishes a formal process for handling purchasers who fail to meet their contractual obligations under off-plan sale agreements.
When a buyer defaults, the developer must notify the Real Estate Regulatory Department. The Department verifies the default and assesses the project’s construction progress before allowing the purchaser 30 days to fulfil the outstanding obligations. If the issue remains unresolved, the Department may issue the documentation required for the developer to terminate the agreement unilaterally.
The amount a developer may deduct from the purchase price depends on the project’s completion status:
Up to 40%: Where construction has reached at least 60% completion.
Up to 25%: Where the project remains below 60% completion.
Up to 20%: Where construction has not started for reasons not attributable to the developer, subject to the law’s conditions.
An important feature of the legislation is its application to off-plan agreements signed both before and after the new law takes effect, except for projects that have already received completion certificates.
Consequently, developers should not assume that default and termination clauses prepared under the previous legislation remain sufficient. Existing sale and purchase agreements, notification procedures and internal approval processes should be reviewed against the updated requirements.
The legislation also expands purchasers’ access to information by expressly granting them access to data relating to their projects and individual units. Developers may need to review how they maintain project records, respond to buyer enquiries and communicate construction progress.
Changes to Escrow Withdrawals and Project Financing
Escrow arrangements remain a central safeguard under the new framework, but the rules governing the use of project funds have changed.
The previous legislation expressly allowed certain marketing expenses to be paid from escrow accounts and provided limited opportunities to withdraw anticipated project profits under specified conditions. The new law does not reproduce those mechanisms in the same form, instead focusing withdrawals on construction expenditure and other costs considered necessary by the Department to complete the development.
Developers may need to reassess existing project budgets, marketing allocations and expected cash flows, particularly where financial plans were prepared under the earlier rules.
The legislation also permits developers to mortgage project land to obtain financing for construction completion, subject to conditions and controls to be detailed in the executive regulations. Proceeds from such financing must be deposited into the relevant project escrow account.
Other financial safeguards continue to apply. Developers must contribute at least 20% of construction costs, and projects cannot rely entirely on funds collected from off-plan buyers. Escrow money also cannot be used to pay for project land before a completion certificate is issued.
Additionally, the escrow trustee must retain 5% of total construction costs for one year after the completion certificate is issued. Early release is possible against a liquid bank guarantee, subject to the applicable requirements.
Developers and lenders should examine how these provisions affect existing loan agreements, security arrangements and funding plans while awaiting further implementation guidance.
Main Developers, Sub-Developers and Sales Contracts
The revised framework introduces registration requirements for agreements between main developers and sub-developers. Regulatory approval is also required in certain situations before development arrangements can be terminated after construction has begun.
These provisions are particularly relevant to large master-planned communities and projects involving multiple development companies. Before restructuring a project or ending an agreement with a development partner, companies should consider both their contractual rights and the applicable regulatory approval process.
The law also addresses the accuracy of property measurements and changes to approved development plans.
Developers must compensate purchasers when a unit’s actual area is more than 5% smaller than the area originally sold. Changes to approved plans, technical specifications or project-management systems require approval from the Department.
Sale and purchase agreements should therefore be reviewed for provisions covering unit measurements, authorised design changes and handover obligations. Sales teams, technical departments and project managers should also follow procedures that reflect the revised requirements.
What RAK Developers Should Review Now
For developers with ongoing projects, a focused compliance assessment can help identify where existing arrangements may need updating.
Priority areas include:
Project registration: Confirm that developer, project, broker and sub-developer registrations meet the applicable requirements.
Off-plan contracts: Review buyer-default notices, termination procedures and permitted deductions.
Escrow and funding: Reassess construction budgets, marketing expenditure, anticipated distributions and financing arrangements.
Development partnerships: Check contractual obligations and approval requirements for restructuring or terminating agreements.
Sales and handover: Verify unit-area provisions, procedures for changing approved plans and purchaser compensation clauses.
Buyer communications: Ensure project information can be provided to purchasers in accordance with their statutory access rights.
Further implementation details are expected through executive regulations and related decisions. Until then, existing regulations and decisions continue to apply insofar as they do not conflict with the new law.
For Ras Al Khaimah’s property sector, the revised framework makes regulatory compliance an important consideration for both ongoing and future developments. Developers who assess their contracts, financing structures and internal procedures against the updated requirements will be better positioned to identify potential compliance gaps and manage their projects under the new regime.
END.
