Understanding Oqood and SPA in Dubai: Complete Guide to Property Contracts
Everything you need to know about Oqood registration and Sales Purchase Agreements (SPA) in Dubai. Learn how to protect your rights, understand contract terms, and navigate the legal aspects of property purchase.
Key Takeaways
- Oqood is preliminary registration for off-plan properties; Title Deed is final ownership proof after handover
- SPA (Sales Purchase Agreement) is the comprehensive legal contract defining all terms of purchase
- Critical SPA clauses to review: payment schedule, completion date, specifications, transfer rights, defects liability
- Late payment penalties (typically 2%/month) often exceed late delivery penalties - negotiate balance
- Always request SPA draft before booking and consider legal review for high-value purchases
TL;DR: Key Documents Explained
When buying off-plan property in Dubai, two critical documents protect your investment: Oqood and SPA.
Document Overview:
| Document | What It Is | When Used |
|---|---|---|
| Oqood | Initial sale contract registration | Off-plan purchase |
| SPA | Sales Purchase Agreement | All property purchases |
| Title Deed | Final ownership proof | After handover |
What is Oqood?
Definition and Purpose
Oqood (Arabic for "contracts") is the preliminary sale contract registration system for off-plan properties in Dubai. It:
- Registers your interest in the property
- Creates a legally binding contract
- Protects buyer rights before title deed
- Is issued by Dubai Land Department (DLD)
When Oqood Applies
| Property Type | Oqood Required | Alternative |
|---|---|---|
| Off-plan (under construction) | Yes | None |
| Ready property | No | Title deed transfer |
| Resale off-plan | Yes (transfer) | Oqood transfer |
Oqood vs Title Deed
| Aspect | Oqood | Title Deed |
|---|---|---|
| When Issued | At booking/signing | At handover |
| Property Status | Under construction | Completed |
| Ownership Proof | Preliminary | Final |
| Can Sell? | Yes (Oqood transfer) | Yes (title transfer) |
| DLD Fee | 4% (or per plan) | Already paid |
The Oqood Process
Step-by-Step Guide
Step 1: Booking
- Sign booking form with developer
- Pay booking amount (typically 10-20%)
- Receive booking confirmation
Step 2: Oqood Registration
- Developer initiates Oqood registration
- Buyer pays Oqood fee (AED 1,000)
- DLD issues Oqood certificate
- Takes 1-2 weeks
Step 3: SPA Signing
- Sign full Sales Purchase Agreement
- Payment schedule activated
- Legally binding commitment
Step 4: Progress Payments
- Pay per payment schedule
- Payments go to escrow account
- Construction milestones trigger payments
Step 5: Handover
- Property completed
- Final inspection
- Title deed issued
- Oqood replaced by title deed
Oqood Fees
| Fee | Amount | Who Pays |
|---|---|---|
| Oqood Registration | AED 1,000 | Buyer |
| DLD Fee | 4% of property value | Buyer |
| Trustee Fee | AED 4,000 + VAT | Split |
Note: Some developers defer DLD fee to handover or offer waivers.
What is SPA (Sales Purchase Agreement)?
Definition and Purpose
The Sales Purchase Agreement (SPA) is the comprehensive legal contract between buyer and developer/seller. It:
- Defines all terms of sale
- Specifies property details
- Outlines payment schedule
- Sets rights and obligations
- Includes penalties and remedies
SPA Contents
Essential Elements:
| Section | What It Covers |
|---|---|
| Property Details | Location, size, unit number |
| Price and Payment | Total price, schedule, method |
| Completion Date | Expected handover date |
| Specifications | Finishes, materials, standards |
| Developer Obligations | What developer must deliver |
| Buyer Obligations | Payment, handover requirements |
| Penalties | Late payment, late delivery |
| Termination | Conditions for ending contract |
| Dispute Resolution | How disputes are handled |
Critical SPA Clauses to Review
1. Payment Schedule
What to Check:
- Payment amounts and dates
- Milestone triggers (if construction-linked)
- Post-handover payment terms
- Grace periods (if any)
- Late payment penalties
Red Flags:
| Clause | Risk |
|---|---|
| No milestone definition | Unclear when payments due |
| High late fees (>2%/month) | Expensive if delayed |
| No grace period | Immediate penalties |
| Balloon payment >30% | Large final payment risk |
2. Completion Date
What to Check:
- Specific completion date or range
- Extension clauses (how much extra time allowed)
- Penalty for late delivery
- Force majeure conditions
Red Flags:
| Clause | Risk |
|---|---|
| No specific date | No accountability |
| Long extension allowed (>12 months) | Years of potential delay |
| No late delivery penalty | Developer has no incentive |
| Broad force majeure | Easy excuse for delays |
3. Specifications and Quality
What to Check:
- Included vs optional finishes
- Material specifications
- Appliance brands/models
- What constitutes "standard" vs "upgraded"
Red Flags:
| Clause | Risk |
|---|---|
| "Developer may substitute" | Lower quality possible |
| "Similar or equivalent" | Vague specifications |
| No brand names | Can use cheap alternatives |
| "As per availability" | Quality not guaranteed |
4. Size and Layout
What to Check:
- Built-up area (BUA)
- Plot area (for villas)
- Layout dimensions
- Balcony/terrace size
- What happens if size varies
Red Flags:
| Clause | Risk |
|---|---|
| ±10% size variation allowed | Unit could be much smaller |
| No price adjustment for size change | Pay same for less space |
| Layout "subject to change" | Different unit delivered |
5. Transfer and Assignment
What to Check:
- Right to sell before completion
- Transfer fee amount
- Developer approval requirements
- Assignment process
Red Flags:
| Clause | Risk |
|---|---|
| No transfers allowed | Locked in until completion |
| High transfer fee (>4%) | Expensive to exit |
| Developer approval with fees | Hidden costs |
| Lengthy approval process | Delays your sale |
6. Defects Liability
What to Check:
- Warranty period length
- What is covered
- Response time for repairs
- Process for reporting defects
Standard Coverage:
| Defect Type | Typical Warranty |
|---|---|
| Structural | 10 years |
| MEP (mechanical, electrical, plumbing) | 1-2 years |
| Finishes | 1 year |
| Appliances | Per manufacturer warranty |
Red Flags:
| Clause | Risk |
|---|---|
| Very short warranty (<1 year) | Quick expiry |
| Exclusions for "minor" defects | Unclear what's covered |
| No response timeline | Developer can delay |
| Buyer must prove defect | Burden on buyer |
Your Rights Under Oqood and SPA
Buyer Rights Protected
| Right | Legal Basis |
|---|---|
| Escrow account protection | RERA Law No. 8 |
| On-time delivery | SPA terms |
| Quality as specified | SPA specifications |
| Penalty for late delivery | SPA penalty clause |
| Refund if project cancelled | RERA regulations |
| Sell before completion | Oqood transfer right |
Developer Obligations
| Obligation | Legal Requirement |
|---|---|
| Maintain escrow account | RERA Law No. 8 |
| Complete on agreed date | SPA contract |
| Deliver specified quality | SPA specifications |
| Pay late delivery penalty | SPA penalty clause |
| Register Oqood promptly | DLD regulations |
Common SPA Pitfalls
Pitfall #1: Not Reading Before Signing
Problem: Buyers often sign SPAs without reading, assuming all contracts are similar.
Solution:
- Request SPA draft before booking
- Read every clause
- Ask for clarification on unclear terms
- Have lawyer review
Pitfall #2: Ignoring Penalty Clauses
Problem: Late payment penalties can be severe, while late delivery penalties are often minimal.
Typical Comparison:
| Late Payment | Late Delivery |
|---|---|
| 2% per month | 0% or minimal |
| Cumulative | One-time small amount |
Solution:
- Negotiate balanced penalties
- Understand your exposure
- Plan payment schedule carefully
Pitfall #3: Accepting Vague Specifications
Problem: "Premium finishes" and "high quality" mean nothing without specifics.
Solution:
- Request detailed specification list
- Include brand names and models
- Reference sample units
- Document during handover inspection
Pitfall #4: Not Understanding Termination Rights
Problem: You may have limited ability to cancel if circumstances change.
Typical Termination Terms:
| Scenario | Typical Outcome |
|---|---|
| Buyer wants to cancel | Heavy penalties (30%+) |
| Developer cancels | Refund with minimal interest |
| Project abandoned | Long legal process |
Solution:
- Understand termination before signing
- Know your exposure if you need to exit
- Consider transfer as alternative to cancellation
Oqood Transfer Process
When You Want to Sell Before Completion
If you want to sell your off-plan property before handover:
Step 1: Find Buyer
- Market the property
- Negotiate price
- Confirm buyer eligibility
Step 2: Developer Approval
- Submit transfer request
- Pay transfer fee (typically 2-4%)
- Get developer NOC
Step 3: DLD Transfer
- Both parties visit DLD trustee
- Complete transfer paperwork
- New Oqood issued to buyer
Step 4: SPA Amendment
- Update buyer details in SPA
- New payment schedule confirmed
- All rights transferred
Transfer Costs
| Cost | Typical Amount | Who Pays |
|---|---|---|
| Developer transfer fee | 2-4% of original price | Seller |
| DLD transfer fee | AED 1,000 | Buyer |
| Agent commission | 2% | Seller |
Document Comparison Table
| Feature | Oqood | SPA | Title Deed |
|---|---|---|---|
| Purpose | Preliminary registration | Contract terms | Final ownership |
| When Issued | At booking | At signing | At handover |
| Property Status | Off-plan | Any | Ready |
| Legal Weight | Binding | Binding | Highest |
| DLD Fee | Required | Part of Oqood | Already paid |
| Can Transfer | Yes | With transfer | Yes |
| Proof of Ownership | Preliminary | Contract | Final |
Before Signing: Checklist
Documents to Request
| Document | Why Needed |
|---|---|
| SPA draft | Review before commitment |
| Payment schedule | Plan your cash flow |
| Specifications list | Know what you're buying |
| Floor plan | Verify layout |
| Master plan | Understand surroundings |
| Escrow account details | Verify protection |
Questions to Ask Developer
- What is the exact completion date?
- What penalty applies if you're late?
- What happens if I miss a payment?
- Can I transfer before completion?
- What specifications are included?
- What warranty do you provide?
- What are the service charges?
Legal Review
Hire a Property Lawyer If:
- Buying high-value property (AED 2M+)
- Developer is unfamiliar
- Contract terms seem unfair
- You don't understand clauses
- International buyer with specific requirements
Cost: AED 3,000-8,000 Value: Potentially saves hundreds of thousands
Conclusion
Oqood and SPA are your primary protections when buying Dubai property. Understanding them is essential for:
- Protecting your investment
- Knowing your rights
- Avoiding costly surprises
- Planning your finances
Key Takeaways:
- Oqood = preliminary registration for off-plan
- SPA = comprehensive legal contract
- Title Deed = final ownership proof
- Always read before signing
- Negotiate unfair terms
- Consider legal review
Get help understanding your contracts with Genie AI.
Related Guides
- How to Verify Developer Reputation - Developer due diligence
- DLD Fees and Transaction Costs - All purchase costs
- Property Investment Mistakes to Avoid - Critical mistakes
- Developer Payment Plans Guide - Payment structures
Sources and further reading
Process and risk checklist
For legal, rental, mortgage, visa, and transaction topics, verify the current rule with the relevant authority or a qualified adviser before acting. Dubai procedures can change, and your nationality, financing method, property type, contract status, and ownership structure can affect the correct process. Keep written documentation, confirm all fees before transfer, and avoid relying on verbal promises when a permit, title deed, tenancy contract, or payment obligation is involved.
The safest approach is to compare the official requirement, the contract wording, and the practical timeline. If those three do not match, pause and clarify before paying a deposit or signing. Good process discipline protects buyers, sellers, landlords, and tenants from avoidable disputes.