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Reservation Contract Template for United Arab Emirates

A UAE Reservation Contract is a legally binding document used in the United Arab Emirates real estate market to formalize the intention to purchase a property and secure it for a specific period. The document complies with UAE federal laws and specific emirate-level regulations, particularly those set by RERA in Dubai or relevant authorities in other emirates. It establishes the terms of the property reservation, including the reservation fee, duration, and conditions for conversion to a full sale and purchase agreement. The contract provides protection for both the developer/seller and the potential buyer while ensuring compliance with local real estate regulations and consumer protection laws.

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What is a Reservation Contract?

The Reservation Contract is a crucial document in UAE real estate transactions, particularly in the context of off-plan properties and new developments. It serves as an initial agreement between a developer/seller and a potential buyer, securing the property for a specified period while detailed terms are finalized. The document must comply with UAE federal laws and specific emirate-level regulations, including RERA requirements in Dubai. A properly structured Reservation Contract typically includes details of the property, reservation fee amount, duration of the reservation period, and conditions for proceeding to a full sale and purchase agreement or obtaining a refund. This document is particularly important in the UAE's dynamic real estate market, where properties, especially in new developments, may have multiple interested parties.

What sections should be included in a Reservation Contract?

1. Parties: Identification of the Developer/Seller and the Reserving Party/Buyer with full legal names and details

2. Background: Context of the reservation agreement, including brief description of the development project and property

3. Definitions: Key terms used throughout the agreement including Property, Reservation Fee, Reservation Period, etc.

4. Property Details: Specific description of the property being reserved, including unit number, size, and location details

5. Reservation Terms: Core terms including reservation period, exclusivity, and conditions

6. Reservation Fee: Amount of reservation fee, payment terms, and handling of the fee

7. Rights and Obligations: Specific rights and obligations of both parties during the reservation period

8. Duration and Termination: Length of reservation period and circumstances for termination

9. Refund Conditions: Terms and conditions for refund of the reservation fee

10. Governing Law and Jurisdiction: Specification of UAE law application and jurisdiction

What sections are optional to include in a Reservation Contract?

1. Sales and Purchase Agreement Terms: Include when the reservation will lead to a specific SPA, outlining key terms of the future agreement

2. Payment Schedule: Include when there are multiple payment installments for the reservation fee

3. Developer's Warranties: Include when specific warranties about the property or development are being made

4. Force Majeure: Include when needed to address potential extraordinary circumstances affecting the reservation

5. Confidentiality: Include when sensitive commercial information is being shared

6. Assignment Rights: Include when the right to assign the reservation needs to be addressed

7. RERA Compliance: Include specific section when property is in Dubai to address RERA requirements

What schedules should be included in a Reservation Contract?

1. Schedule 1 - Property Specification: Detailed description of the property including floor plans, finishes, and specifications

2. Schedule 2 - Payment Terms: Detailed breakdown of the reservation fee and payment schedule if applicable

3. Schedule 3 - Project Information: Details about the development project, including amenities and expected completion date

4. Schedule 4 - Form of Sale and Purchase Agreement: Draft or key terms of the future sale agreement

5. Appendix A - Property Documents: Copies of relevant property documentation including title deed or development approvals

6. Appendix B - Required Identification Documents: List and copies of required identification documents for both parties

Authors

Alex Denne

Head of Growth (Open Source Law) @ tiktok成人版 | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents

Document Type

Service Agreement

Cost

Free to use

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