Purchase Agreement

A purchase agreement (also called a Sale and Purchase Agreement or SPA) is the definitive contract governing a property transaction. It supersedes any earlier MOUs or Letters of Intent and contains the complete terms: purchase price, payment schedule, completion conditions, representations and warranties, default provisions, and dispute resolution mechanisms.

For off-plan sales, the SPA is a standardized contract between the developer and buyer, typically based on RERA-approved templates. For secondary market sales, the MOU (Form F) functions as the purchase agreement. Key terms include the price, payment milestones, handover date, penalty for delays, and cancellation provisions. Both buyer and seller should have the agreement reviewed by independent legal counsel.

Payment schedule and penalty for late payment

Completion date and delay compensation

Specifications and permitted deviations

Cancellation and refund provisions

Dispute resolution (RERA, courts, arbitration)

The purchase agreement is the single most important document in any real estate transaction. Unlike the MOU or reservation form that precedes it, the SPA creates binding legal obligations that are costly and difficult to exit. Reading and understanding eparticularly clause before signing is not optional; it is the minimum required due diligence for any investment of this size. Clauses that seem standard may contain provisions that are unfavorable in practice.

Key clauses to scrutinize in any real estate SPA include: the delay penalty provision (is the compensation for developer delays meaningful or symbolic?), the cancellation and refund policy (under what circumstances can you exit and how long does refund take?), the force majeure definition (how broadly can the developer invoke it to excuse delays?), and the dispute resolution mechanism (RERA arbitration, UAE courts, or international arbitration). Each of these clauses has significant financial implications if things do not go to plan.