The Retention Tiers, and Negotiating the Number Down

Welcome back to the dispute.ae podcast. I'm Paul. This is episode thirteen.

Episode five established that a developer's retention right is tiered to construction progress and self-executing. Episode twelve covered the DLD process that ends with an official document stating the unit's completion percentage. This episode puts the actual numbers on the tiers — because once that DLD document exists, the percentage on it determines which tier you're in, and the tier determines the money.

The tiers

Where the project is more than 80% complete, the developer has options beyond termination. They can keep the SPA alive and claim the outstanding balance from you. They can ask the DLD to auction the unit to recover what's owed. Or they can terminate and retain up to 40% of the purchase price. Where the project is between 60% and 80% complete, the developer can terminate and retain up to 40% of the purchase price. Where construction has started but the project is below 60%, the developer can terminate and retain up to 25% of the purchase price. And where construction has not started, for reasons beyond the developer's control, the developer can terminate and retain up to 30% — but of the amounts you've actually paid, not of the purchase price.

The detail most buyers misread

Look again at where the percentages bite. In the first three tiers, the retention is a percentage of the purchase price — not of what you've paid. That distinction can be brutal for a buyer early in a payment plan. Take a unit bought at two million dirhams, 30% paid — six hundred thousand — with the project past 60% complete. The developer's maximum retention is 40% of the purchase price: eight hundred thousand dirhams. That's more than everything you've paid in. In that position, the retention can consume the entire amount paid. Only in the not-started tier does the law switch the base to amounts paid.

So a buyer cannot judge their exposure from the percentage alone. The exposure is the percentage, applied to the right base, against what's actually been paid — three numbers, and the relationship between them is the whole position. This is exactly why episode eleven's discipline comes first: establish the real figures from the documents before deciding anything.

"Up to" is where the negotiation lives

Now the two words in the statute that matter most for this episode: up to. The law sets ceilings, not mandates. The developer may retain up to 40%, up to 25%. Nothing obliges them to take the maximum, and whether they do is a commercial decision made by a team with incentives — which means it can be negotiated.

Why would a developer take less than their ceiling? Because of what the alternative costs them. Running the full process to its end takes time and administration. The refund of your excess sits on the statutory clock — up to a year from termination, or sixty days from resale. A contested exit can become a filed claim they must defend even when they win it. And above 80%, their alternatives — chasing you for the balance, or a DLD auction with its own timeline and uncertainty — carry their own costs and delays. Against all that, a cooperative buyer offers something developers genuinely value: a signed, documented, no-further-claims exit, on an agreed figure, now. A closed file and a clean unit back in inventory. You are not asking for charity below the ceiling. You are selling certainty, and certainty has a price.

How the negotiation is run

Three components, every time. The documented position — ledger, contract, notices, the DLD process checked for defects — so the negotiation starts from the supportable figure, not the letterhead figure. The structured proposal — a specific retention figure, a specific timeline, a full mutual release, in a document the developer's team can take to whoever signs off; signable proposals get decisions, vague requests get waited out. And the credible alternative — the visible readiness to contest a defective process or an unsupportable figure if cooperation fails, because leverage is never volume, it's the documented ability to make the uncooperative path more expensive for them. A failed attempt still leaves you the assembled record, the documented offer, and their documented refusal — all of which reshape how any later forum reads the parties. The attempt is never wasted.

This negotiation is the core of dispute.ae's engagement work, run under terms that tie the fee to a documented reduction against the developer's demand, half-refunded if the number doesn't move. Details on the site.

Next episode: the buyer who went silent, defaulted, and now wants to restructure from inside the machinery.

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