Form F and the 10% deposit — who holds the cheque?

Two things confuse people in almost every Dubai resale: the Form F, and the 10% deposit that goes with it. Get them right and the deal runs on rails. Get them wrong — hand the wrong person a cheque at the wrong moment — and you have given away your main piece of leverage. It is worth five minutes.

What Form F actually is

Form F is the memorandum of understanding — the contract of sale between buyer and seller, generated through the DLD system. It fixes the price, the deposit, who pays which costs, and the timeline to transfer. Once both sides sign, it is binding, and it carries a default penalty if either party walks without cause. It is not a formality to skim. It is the document the whole transaction hangs on.

The deposit — the bit people fumble

On signing, the buyer puts down a deposit, conventionally 10%, almost always by manager's cheque rather than a personal one — a bank-guaranteed cheque tells the seller the funds are real. The question that trips everyone up is not how much. It is who holds it, and when it can be cashed.

Who holds it, and when it is cashed

The deposit cheque is usually made payable to the seller — but it should not be cashed on signing. The parties agree, in writing, who physically holds it until completion: commonly the registration trustee, sometimes the broker, occasionally another documented arrangement. Whoever holds it has no discretion of their own; they act strictly on the conditions written into Form F. The cheque is released to the seller at the final transfer, at the trustee's office — or returned, per the contract, if the deal is cancelled on agreed terms.

For a buyer, the safest arrangement is to have the deposit held by the registration trustee, released only on completion. That keeps it out of the seller's hands until you get what you are paying for, and out of any argument about who is entitled to what.

Why the mechanics protect you

A deposit sitting in the trustee's file, released only against the transfer, is a deposit you can recover if the other side defaults. A deposit cashed into the seller's account on the day of signing is a deposit you will be arguing about in a courtroom. Same 10%, an entirely different level of risk. The mechanics are dull, which is precisely why they are the first thing a careless deal skips — and the first thing a good one nails down.

General information on standard Dubai practice, not legal advice. Terms are set in your Form F — have a conveyancer confirm the holding and release conditions before you sign.