RAK’s New Real Estate Development Law: What Developers with Active Projects Should Review
16 October 2026
Ras Al Khaimah has introduced a new framework for real estate development under Law No. 10 of 2026 (the “Amended Law”), replacing Law No. 12 of 2023.
Issued on 21 July 2026 and taking effect 60 days from issuance, the Amended Law applies to real estate development projects across Ras Al Khaimah, including RAK Economic Zones. It covers off-plan sales, project escrow accounts, purchaser defaults, developer and sub-developer arrangements, project financing and delivery.
For projects already underway, the significance of the Amended Law goes beyond future launches. Certain provisions apply to existing off-plan contracts, while other changes may affect funding arrangements, development structures and sale documentation already in place.
Regulatory oversight, registration and disclosure
The Amended Law consolidates functions previously divided between the Real Estate Project Development Committee and the Real Estate Regulatory Administration. Licensing, project registration, escrow oversight and enforcement decisions now fall within the Department’s regulatory structure.
Developers should also review their registration and disclosure arrangements. In addition to the existing requirements to register developers and development projects before commencing infrastructure works, construction or off-plan sales, the Amended Law introduces express requirements to register marketing agreements with accredited real estate brokers and contracts between main developers and sub-developers.
Article 6 of the Amended Law also expands the grounds on which a developer may be removed from the relevant register, including the submission of forged documents, fictitious project offerings and inaccurate or incomplete financial disclosures. Removal of the Developer from the Real Estate Developers Register shall not release the Developer from any liability towards the Administration or third parties.
For active developments, these changes warrant a review of existing registrations, broker arrangements and internal compliance procedures, particularly where projects involve multiple development parties or phased construction.
Existing off-plan contracts and purchaser defaults
Article 20 sets out the process where a purchaser defaults under an off-plan sale agreement.
The developer must notify the Real Estate Regulatory Department, which verifies the default and the project’s actual completion percentage. The purchaser is then given 30 days to meet its contractual obligations. If the default continues, the Department may issue the document required for the developer to terminate the contract unilaterally.
The amount that may be deducted from the unit price depends on project completion. The maximum is 40% where the project is at least 60% complete, 25% where completion is below 60%, and 20% where construction has not started for a reason not attributable to the developer, subject to the requirements of the Amended Law.
Importantly, Article 20 applies to all off-plan sale agreements, whether concluded before or after the entry into force of the Amended Law, except for projects for which Completion Certificates have been issued.
This means default and termination procedures drafted under the previous regime should not simply be carried forward. For live off-plan projects, sale and purchase agreements, default notices and internal termination processes should be checked against the statutory procedure before action is taken.
The Amended Law also expressly grants purchasers access to all data relating to their project and unit, broadening the access rights available under the previous framework. Developers should consider whether their information-management and purchaser-communications procedures adequately accommodate this obligation.
Escrow and project funding
The Amended Law retains the project escrow regime but narrows the circumstances in which funds may be withdrawn.
The 2023 Law contained express mechanisms permitting certain marketing expenditure from escrow and, subject to conditions, limited withdrawals of anticipated project profits. These are not repeated in the same form in the Amended Law. The new provisions focus withdrawals on construction expenditure and other costs that the Department considers necessary for completing the project.
Projects structured under the previous regime may therefore have budgets or cash-flow assumptions that warrant another look, particularly around marketing expenditure and planned distributions.
The Amended Law also permits project land to be mortgaged to obtain financing for completion, subject to the conditions and controls to be set out in the executive regulations, with the financing proceeds paid into the project escrow account.
Other safeguards remain in place. Developers must contribute at least 20% of construction costs, and projects cannot be financed entirely through off-plan sale proceeds. The prohibition on using escrow funds to pay for project land before a completion certificate is issued also remains. In addition, the escrow trustee must retain 5% of total construction costs for one year following the completion certificate, subject to early release against a liquid bank guarantee.
Developers and lenders should consider this alongside their existing financing and security arrangements and monitor the forthcoming regulations for further detail.
Development structures and sale documentation
Contracts between main developers and sub-developers are subject to registration requirements under the Amended Law. Regulatory approval is also required in specified circumstances before certain development arrangements can be terminated once construction has commenced.
For master developments and other projects involving more than one development party, contractual rights therefore need to be considered alongside the applicable regulatory process, particularly where restructuring or termination is being considered.
Sale documentation also requires attention. A developer must compensate a purchaser where the actual area of a unit falls more than 5% below the area sold. Changes to approved plans, technical specifications or project-management systems also require Department approval.
SPA provisions dealing with measurement, permitted changes and handover should be considered alongside the internal processes used by sales, technical and project teams.
What should developers do now?
Active RAK developments should now undergo a targeted review of the areas affected by the Amended Law.
Priority areas include purchaser-default procedures for existing off-plan contracts, escrow and project-finance arrangements, main developer and sub-developer documentation, and provisions dealing with unit area, project changes and handover.
Further implementation detail is expected through executive regulations and implementing decisions. Until then, existing regulations and decisions continue to apply to the extent that they do not conflict with the Amended Law.
For developers with active projects in Ras Al Khaimah, the immediate priority is to identify where existing contracts, project structures and internal procedures now interact with the new regime, while keeping financing arrangements and other areas dependent on the forthcoming executive regulations under review.
This update was prepared by Farina Iqbal.
Want to know more about how Ras Al Khaimah’s new real estate development framework may affect your projects, contracts or development arrangements?
Get in touch with Farina Iqbal and the ADG Legal team.