Property reservation agreement abroad - what to check before making a payment?

The booking fee is often the first wire transfer in an international real estate transaction. Before the buyer receives the full text of the Sale and Purchase Agreement (SPA), the seller may ask them to sign a Booking Form and deposit funds. This is precisely when it is necessary to determine whether the document actually reserves the specified unit, for how long it holds the price, to whom and to what account the money goes, and when it is refundable. A mere confirmation of a "reservation" in an email does not answer these questions.

A good reservation agreement provides time to review the design and terms of the future contract. It does not replace due diligence, nor does it automatically ensure the right to a refund of the fee. The rules vary between markets and projects: in Dubai, the status of the project and the escrow account is important; in Oman, the current license and project documents; and in Spain, also the classification of the payment as a reservation, down payment (cuenta a cuenta), or earnest money (arras). The following procedure helps organize the risks before the first transfer.

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What actually is a reservation agreement and what must it contain?

A Booking Form or Reservation Agreement is a document specifying the terms for temporarily taking a specific property off the market. Its practical value lies in the fact that the buyer gains a predictable timeframe to assess the project, financing, and the main contract. However, one should not assume that every form has the same effect. One may merely confirm receipt of an application, another establish an obligation to pay, and yet another contain obligations similar to a preliminary contract. The content, applicable law, and manner of signing determine the legal effect, not the title of the document.

The unit, price, and deadline must be identifiable

The document should include the full details of the parties and their roles: the developer, owner, broker, and the entity accepting the funds. Next, it is necessary to indicate the name and number of the project, plot, building, unit number, area, floor, parking space, or other components included in the price. When purchasing off-plan, a unit plan and finishing standard in a dated version should be attached. Without this, after payment, it may turn out that a "similar apartment" has a different footage, view, or share in common areas.

The price should be stated as a total amount in a specific currency, distinguishing between the price of the unit, taxes, registration fees, commission, and additional costs. The form should explain whether the booking fee will be credited toward the price, when subsequent installments are due, and what document triggers each deadline. If the seller mentions a "price lock," it is necessary to specify what price is being held, until when, and what the exceptions are. A clause allowing a unilateral change of price before signing the SPA undermines the economic sense of the reservation.

The reservation should pave the way for SPA analysis

It is worth specifying the reservation expiration date, the deadline for delivering the SPA draft and project documents, as well as the method for raising objections. The buyer should know whether they can withdraw if a defect in title, lack of a required license, significant discrepancy in unit parameters, or an unacceptable SPA clause is revealed. These are terms to be agreed upon before payment, not promises that can be added later. If the reservation expires faster than a local lawyer can check the documents, one must negotiate a longer deadline or postpone the payment.

In Dubai, an additional point of reference is the registration of the off-plan project. The Dubai Land Department describes the process of project registration and opening an escrow account. The buyer should compare the name of the developer and the project with the data in the documents and in the Project Status Enquiry service. Therefore, the reservation serves to verify facts before the SPA; it is not a shortened legal audit.

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When is the reservation fee refundable and when is it forfeited?

There is no single international rule regarding the refund of a booking fee. One must read the exact provision regarding the reasons for cancellation, the refund period, deductions, and the party responsible for the payout. The phrase "fully refundable" is useful only if the document explains until when and upon fulfillment of what conditions it applies. Similarly, "non-refundable" does not yet describe what happens if the seller has no right to sell the unit or changes the transaction terms themselves. Questionable clauses should be evaluated by a lawyer familiar with the law applicable to the project.

Record specific events that trigger a refund

The buyer can negotiate a "subject to due diligence" condition: a refund of the fee upon demonstrating a specific legal defect, lack of a license, encumbrance, or discrepancy in the documentation. Such a condition requires a procedure: who examines the documents, by when they send objections, what form the notice takes, and how many days the seller has to make the refund. The "subject to financing" condition works similarly when the purchase depends on a loan: one must define the minimum financing parameters, the decision deadline, and proof of refusal. A mere mention of a planned loan is usually not enough.

Other possible conditions include the seller's failure to deliver agreed documents, a change in unit identification or price, the lack of a required sales permit, or the non-compliance of the SPA draft with the reservation terms. Visa or residence permit denial matters only if residency status is a condition of the transaction for the buyer and has been clearly incorporated into the document. One should not assume that the purchase alone guarantees a visa or that a refusal automatically results in a refund.

Spanish arras pose a separate contractual risk

In Spain, one must distinguish a simple reservation from a subsequent arras agreement and determine the type of payment. Article 1454 of the Spanish Civil Code concerns arras (earnest money), where the buyer can withdraw by losing the payment, and the seller by returning it in double. This does not mean that every amount called a "reserva" operates under this provision. The content of the document and legal qualification matter. For a property under construction, one must additionally verify the protection of amounts paid toward the price; the Spanish Building Organization Act provides rules for guarantees and a separate account for such funds in certain situations.

The risk model should take into account not only the possibility of losing the entire payment, but also transfer costs, currency conversion, and potential administrative deductions. Even a refund of nominally the same amount in AED, OMR, or EUR may yield a different result in PLN after an exchange rate change. It is worth recording the refund currency, destination account, division of bank costs, and payout deadline. Instead of asking whether the fee is "usually" refundable in a given country, one should ask: what exact refund mechanism applies in this agreement?

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To which account should funds be paid and how to verify the developer?

Before payment, one must independently compare three sets of data: the selling entity in the reservation, the transfer beneficiary, and the entity authorized to sell the project. If they are not identical, the seller should explain in writing the relationship between them and the basis for accepting funds. A well-known brand logo on a form does not confirm that the account belongs to the correct project. Payment instructions should be obtained through the developer's official channel and confirmed via another channel, especially if the account number changes just before payment.

Escrow in Dubai and project documents in Oman

In Dubai, Law No. 8 of 2007 regulates escrow accounts for projects sold off-plan. The DLD describes the project registration along with the opening of an escrow account, and the Project Status Enquiry service shows, among other things, the developer's and escrow data. The buyer should compare the project number, bank name, and beneficiary with the payment document. If the seller points to a representative's private account or an agency account, the transfer should be withheld and a written explanation supported by documents must be obtained. The escrow account itself limits the risk of misuse of funds, but does not guarantee the completion date or investment outcome.

In Oman, analysis should not be based solely on older descriptions of the escrow system. Royal Decree 79/2025 repealed the previous system established by Decree 30/2018; current project conditions must be checked against the current regime and executive documents. The official off-plan real estate development project licensing service lists, among other things, the land title, approval, maps, off-plan sales agreement, and the stage of opening the escrow account. In practice, one should request the license number, the basis of the foreigner's right to acquire, project details, and bank confirmation of the account assigned to the given investment. In an ITC project, a marketing description alone does not prove legal status.

KYC and AML are part of transaction control

A request for an identity document, identification of the beneficial owner, or confirmation of the source of funds may result from KYC and AML procedures. It is not an abuse signal in itself. It is important that the buyer knows who is collecting the data, through what secure channel, which entity will issue the payment confirmation, and how it will be assigned to the unit. Do not send a passport scan and transfer confirmation to a random messenger address. When paying from a Polish bank, it is worth agreeing in advance on the currency, SWIFT/IBAN data or local equivalent, type of transfer costs, and refund procedure.

For a ready property and land, different documents will be needed than for an off-plan unit. A Title Deed may confirm the title to the plot or ready property, but a separate title does not always exist for a unit under construction. An NOC (No Objection Certificate) is required in specific processes, not universally for every reservation. The list of documents must follow the jurisdiction and project stage. A good complement is the PlanoGroup guide on escrow in the GCC.

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How to negotiate time for due diligence before the transfer?

The analysis window should match the actual scope of documents, not the pace of the sales campaign. For example, 7–14 days can be proposed, but this is neither a statutory standard nor the proper deadline for every project. A more complex ownership structure, financing with a loan, or the need to translate documents may require a longer period. The most important thing is that the deadline is calculated from the receipt of the complete package, not from signing an incomplete form.

Document package to be shared

It is worth attaching a list of documents to the reservation that the seller will provide within a specified deadline: confirmation of title to the land or unit, license status and building permit, approved plans, SPA draft, payment schedule, finishing standard, project account documents, and post-handover fee rules. For the purchase of a ready unit, information on encumbrances, arrears to the community, and rental restrictions will be useful. For off-plan, a lawyer should check the developer's authorization to sell, construction deadlines, project changes, the handover procedure, warranty or local equivalents, and the consequences of delay.

The buyer can propose that the reservation period be suspended until missing documents are delivered. It is also worth establishing the sequence: first the draft contract and documents, then signing the reservation, and later payment to a verified account. If the seller requires payment earlier, it must be determined where the funds will be held and whether they will be returned if the review reveals a significant obstacle. A local lawyer should assess whether such a structure is feasible under the given legal system.

Review the SPA before the reservation becomes non-refundable

The biggest disputes arise when the Booking Form promises one price or standard, and the SPA contains broad rights for the developer to make changes. Therefore, before losing the right to a refund, one must compare both documents: unit identification, area and how it is measured, currency, installments, handover date, termination conditions, assignment of rights, administrative costs, and Service Charge. For an investment intended for rent, it is worth checking the permitted rental model, operator, equipment costs, and management rules after handover. These are not details of distant operations—they affect the purchase assessment already at the reservation stage.

In conversation with the developer, a simple question is helpful: "Which provisions of the Booking Form will be transferred to the SPA, and which will expire?" The answer should be in the document or an appendix. If the terms are subject to foreign law, translation is meant to support the analysis, but the language version indicated in the contract may be decisive. Therefore, a local lawyer should check this very version, and the buyer should keep all correspondence and successive versions of documents.

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Investor checklist: what to do before sending the transfer?

Step 1. Read the commitment, not just the heading

Highlight in the form who is signing the document, which unit the reservation covers, what the total price and fee are, when the deadline expires, and what happens after it passes. Check whether the fee is a deposit towards the price, a separate administrative fee, or an amount subject to deduction. Ask for a version signed by an authorized person on the seller's side. If there is no identifiable unit yet upon reservation, and the developer can unilaterally replace it, the document does not provide sufficient predictability.

Step 2. Verify the project, account, and basis of sale

Compare the company name, project number, license, beneficiary, and account number in the reservation, payment instructions, and available registers. For Dubai, use the DLD; for Oman, ask for current licensing documents and project account confirmation. For Spain, check the title in the registry, construction status, and—when paying towards a property under construction—the document securing payments. In Montenegro and other jurisdictions, the local lawyer determines the equivalent of these documents. Do not automatically transfer escrow rules from one country to another.

Step 3. Calculate maximum loss and record exit conditions

The booking fee does not have a universal, safe percentage rate. For a specific offer, calculate: the payment liable to be lost, non-refundable administrative fees, two currency conversions, the transfer cost, and the audit cost. Then record the refund conditions, decision date, form of notice, and payout currency in the form. If the purchase depends on financing or residency status, this must be clearly agreed upon. Even a small percentage of the price can mean a significant amount if subsequent document checks reveal a problem.

Create two budget variants: the purchase goes through, and the reservation ends without a purchase. In the second variant, separate the refundable amount from the costs that will remain on your side. Such a calculation reveals the real price of the decision to withdraw from the transaction.

Step 4. Hold payment upon red flags

Do not send funds if the seller does not show the reservation project or SPA, does not identify the unit and price, demands a transfer to a private person's account, changes payment instructions without explanation, or refuses to provide refund conditions. A "last unit" combined with a lack of plans and project documents is also a warning. Read clauses allowing price changes after payment with extreme care; in such cases, the declared price lock may not work. The sequence is simple: read the provision, verify the account, consult doubts with a local lawyer, and only then transfer.

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How does the reservation affect the subsequent SPA and property management?

A precise Booking Form creates a benchmark for the SPA: unit identification, price, payment plan, deadlines, standard, and termination conditions should pass into the main contract or be consciously changed in negotiations. It is worth preparing a comparative table of both versions and asking the seller to explain every change. The reservation does not have to contain the entire SPA, but it should limit the risk that the essential parameters of the transaction are determined only after losing the right to a refund.

From the perspective of an advisor guiding a client through several markets, the most important thing is to maintain an evidentiary trail: the signed form, versions of the unit plan, payment instructions, correspondence regarding the refund, transfer confirmation, and proof of assigning the payment to the unit. When a new version of the SPA appears after reservation, these documents allow distinguishing an agreed change from a unilateral proposal. There is no reliable basis to attribute a constant percentage reduction in disputes to this practice; its value lies in the ability to demonstrate what the parties actually agreed upon.

Check post-handover costs and restrictions now

If the property is intended to work as an investment, verification does not end with the price. Before the SPA, one must know the estimated Service Charge, furnishing rules, the possibility of short-term rentals, operator commission, assignment restrictions, and selling costs. These elements affect the yield and net ROI; lack of data should lead to a conservative scenario, not an assumption of zero. In an off-plan project, check whether the payment plan leaves a liquidity reserve for construction delays and a tenant-free period. PlanoGroup's payment plan analysis expands on this calculation for Oman and Dubai.

State strategies, such as Oman Vision 2040, may influence the directions of infrastructure development, but they do not guarantee the protection of a specific payment or rental outcome. Project documents, contract, license, account, and local procedures are decisive for the reservation. In Spain, additionally check the nature of arras; in Montenegro, title in the cadaster and planning documentation; in Oman, the basis for acquisition by a foreigner; in Dubai, project compliance with the DLD.

If an investor is comparing multiple projects, they should apply the same list of questions to each of them. This makes it easier to notice a missing document or a cost that is not visible in the catalog price.

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Before signing: request documents for analysis

If you are considering a property in Oman, Dubai, Spain, or Montenegro, ask the seller for the Booking Form, SPA draft, project documents, and payment instructions before making a payment. You can send them for initial risk organization and to point out questions that a local lawyer should resolve. The decision to make a reservation should result from the content of the documents and a verified account, not the pace of sales.

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FAQ

Is the booking fee always forfeited?

No. Applicable law, the nature of the document, and agreed clauses determine the refund. Check if there is a deadline for cost-free withdrawal, a condition of positive due diligence or financing, and a refund procedure. In Spain, arras require separate analysis; every "reserva" should not be equated with arras penitenciales. If the document is silent on refunds, do not assume a favorable interpretation—get a written amendment before payment.

Does the reservation block the property price?

Only to the extent resulting from the content of the document. Price, currency, unit, and validity period should be explicitly specified. One must also read the exceptions: surcharges for footage, tax changes, exchange rates, or unilateral price list updates. If the form provides for free price changes before the SPA, the word "reservation" alone does not protect the buyer's budget.

Can I pay the reservation from a Polish account?

This is usually technically possible if the bank supports the given currency and foreign transfer, and the recipient accepts such payment. First, you need to confirm the correct account, beneficiary details, bank costs, exchange rate, and KYC and source of funds requirements. Keep the transfer confirmation and ask for a document assigning the payment to a specific unit. Do not send funds based solely on messenger data.

What to do when the developer changes terms after payment?

Withhold subsequent payments until the new proposal is compared with the signed reservation. Record differences regarding price, unit, deadline, standard, and refund, then ask for a written justification. Do not sign an annex under time pressure. A local lawyer should assess whether the change provides grounds for withdrawal or a refund claim and in what form the claim must be submitted.

How long should a reservation last?

Long enough for the buyer to actually receive the complete set of documents, commission their evaluation, verify the account, and agree on the SPA. The proposed 7–14 days can be a negotiation point, not a market norm. The deadline should run from the delivery of the agreed package and provide for what happens in the event of a seller's delay. With complex financing or legal title, a longer period may be needed."