Another Instalment Is Due, but Construction Is Behind. Can I Stop Paying?

Welcome back to the dispute.ae podcast. I'm Paul, and this is episode thirty-five. In the last episode we looked at proving what changed in the property. Today the buyer has a different immediate problem: another instalment is due while construction appears behind. As always, this is general information, not legal advice.

A buyer receives an instalment demand and looks at the building site. The site appears far behind. The immediate reaction is often "if construction is late, why should I keep paying?" That reaction is understandable — it is also too broad to act upon safely. A photograph of slow progress, a contractual payment milestone, a developer ledger and an official completion record are four different things. Before the buyer replies, the file needs to show what triggered the instalment, whether the developer says it is time-based or construction-linked, what has already been paid, and what official or contractual record supports the current position.

Read the payment clause, not only the payment table

Start with the full SPA. The payment table may list dates, percentages or milestones, but the surrounding provisions may explain how a demand is issued, whether dates can move, whether a milestone must be certified, what notice is required and what happens if a payment is disputed. Do not extract one row and ignore the rest of the agreement. Preserve the signed SPA, all schedules, amendments, payment-plan revisions and any restructuring agreement; if an email appears to change a due date, keep the complete email and ask whether a formal amendment was issued.

Build one reconciled payment ledger

Create a line-by-line ledger. Record every contractual instalment, its stated trigger, the amount, the original due date, any revised due date, the amount paid, the payment date, the recipient account and the receipt reference. Then compare that ledger with the developer statement — do not assume either record is correct. Look for duplicated demands, unallocated transfers, bounced or replaced cheques, credit notes, late fees, administrative charges and payments posted against the wrong unit. Where a figure does not reconcile, write the difference in one sentence — for example, "Developer statement does not show the transfer made on 12 May; bank confirmation and receipt attached." A defined mismatch is easier to answer than a general allegation that the account is wrong.

Trace the recipient and project account

Record exactly where each payment went. Dubai Law No. 8 of 2007 provides for a separate escrow account in the name of each real-estate development project. That does not mean every purchaser automatically controls or can reclaim the money in that account — it does mean the file should connect each transfer to its named recipient, project, account details and receipt. Where the current DLD project result displays escrow information, save it with the retrieval date and compare it with the transfer instructions used at the time. If a payment went to a broker, card processor, another project reference or an account that cannot be reconciled, mark the discrepancy and preserve the complete instruction trail. Do not allege misuse from a mismatch alone; obtain official confirmation and licensed advice.

Identify the alleged trigger

Ask a narrow question: what does the developer say caused this instalment to become due? If it is a calendar date, record the clause and the date. If it is a construction milestone, record the milestone wording and the document the developer relies on. If the demand follows an amended plan, identify the signed amendment. If the buyer is already alleged to be in default, preserve every notice and proof of service. A buyer should not substitute a personal visual estimate for an official or contractually required record — and, equally, a developer spreadsheet should not be treated as an official completion certificate simply because it contains a percentage. Use Dubai Land Department's Project Status Enquiry and save a dated result for the correct project, recording the project number, developer and update date displayed. That output is valuable, but it does not answer every contractual question: the percentage or status displayed may not be the same measurement, date or certification required by the SPA. Keep the DLD result beside the contract and demand rather than using one to replace the other.

Do not create a purchaser-default problem by guessing

This is where generic internet advice becomes dangerous. "The project is late, so stop paying" is not a safe administrative instruction; nor is "the developer demanded it, so pay immediately." The contract, notices, current project information and any cross-allegations need case-specific legal review. Dubai Law No. 19 of 2020 replaced Article 11 of the Interim Property Register law; the provision addresses a defined process where an off-plan purchaser fails to perform contractual obligations, involving developer notification to DLD, DLD verification and a 30-day notice before the listed completion-dependent measures may follow. Those completion bands are potential developer measures within a purchaser-default process — they are not a buyer's automatic cancellation formula, and not a general answer to a delayed-construction complaint. If a developer or DLD notice has arrived, preserve the original, delivery evidence, dates and attachments; do not concede the allegation in an improvised reply, and do not ignore the deadline either — obtain prompt advice from an appropriately licensed UAE lawyer or legal consultant.

A composite example, and the rule to remember

Consider a composite example. The SPA table calls for an instalment at "40 per cent construction." The developer sends a demand saying the milestone has been reached. The DLD project page displays a different percentage, but it was updated on another date. The buyer has also made a transfer that does not appear on the developer statement. That file contains at least three separate questions: what evidence does the SPA require for the milestone; are the two percentages measuring the same thing on the same date; and what is the correct outstanding balance after the missing transfer is allocated? It would be irresponsible to answer all three with one screenshot — the administrative job is to separate them, preserve the sources and put the chronology in order for licensed review.

If no formal legal response is required, a factual account query can identify the unit, quote the demand reference, attach the ledger, identify the disputed line and ask for the milestone or account document relied upon. Keep the language neutral. Dispute.ae does not draft legal notices or decide whether a payment can be withheld; it can organise client-supplied payment records, demands, project outputs and communications into a factual ledger and chronology for handoff. The rule to remember: construction appearing behind does not, by itself, answer whether a particular instalment is due, and a demand arriving does not, by itself, prove the account is correct. Reconcile the contract, the trigger, the ledger, the official project record and every notice before anyone takes an irreversible step.

Official sources referenced

In the next episode, we look at final payment, inspection and the documents presented at handover.

Thanks for listening. The full transcript is at transcript.ae. For pre-legal dispute support, dispute.ae is where that work is done.