A branded residence is a residential project sold and operated under the name of a hotel, fashion, automotive or lifestyle brand. The developer owns and sells the units, while the brand licenses its name, sets design and service standards and, in some projects, manages the building. Each role is set out in a separate contract, and the contracts must fit the Dubai rules on jointly owned property, off-plan sales and property advertising.
- The brand licence is the core agreement. It allows the developer to market the project under the brand’s name and trademarks, in exchange for a fee calculated as a share of each unit’s sale price.
- The brand controls the product. A technical services agreement requires the developer to design and build to the brand’s standards, and the brand may approve materials, layouts and sales documents.
- Hotel projects follow special rules. Under Article 18 of Dubai Law No. 6 of 2019, the management of common parts in a licensed hotel project must be outsourced to a hotel project management company, and the owners committee has no role in managing the hotel.
- Service charges need RERA approval. Under Article 27 of the same law, no management entity may collect amounts from owners without RERA’s approval of an audited budget.
- Advertising needs a permit. Every advertisement for the project, including brand marketing, needs a Dubai Land Department advertising permit, and the department fines companies that advertise without one.
- De-branding is the main risk. A brand may withdraw its name when the agreement ends or a dispute arises, so the termination and de-branding clauses protect the value buyers paid for.
Who this applies to
This applies to developers, development managers and their boards planning or marketing branded residence projects in Dubai, and to hotel groups and lifestyle brands licensing their names to real estate projects. It also concerns hospitality operators that will manage the residences alongside a hotel.
Our real estate lawyers in Dubai draft and negotiate brand licence, technical services and management agreements for branded residence projects, and align them with the sale documents and the building’s governance. This article covers the brand side of the project. Our article on hotel management agreements in the UAE covers hotel operation, and our article on RERA developer obligations for off-plan projects covers registration and escrow.
The legal framework
- Dubai Law No. 6 of 2019 on Jointly Owned Real Property. The law governs owners committees, management companies, service charges and the building management regulations of hotel projects.
- Dubai off-plan legislation. Dubai Law No. 8 of 2007 on escrow accounts and Dubai Law No. 13 of 2008 on the interim real estate register govern off-plan registration and the payments buyers make.
- Federal Decree-Law No. 36 of 2021 on Trademarks. It governs the registration and licensing of the brand’s marks in the UAE.
- Dubai Land Department advertising rules. The department requires a real estate advertising permit for every property advertisement, and its brokerage practice guide sets the conduct rules for agents marketing the units.
The administering bodies:
- The Real Estate Regulatory Agency. RERA approves off-plan projects, management agreements, building management regulations and service charge budgets.
- The Dubai Land Department. It registers units and title, issues advertising permits and enforces advertising rules.
- The Ministry of Economy and Tourism. It registers trademarks and trademark licences.
The contracts in a branded residence project
A branded residence project rests on a set of linked agreements between the developer, the brand and, later, the owners. Each agreement must match the others, because a gap between them becomes a dispute after handover.
The brand licence agreement
The brand licence allows the developer to use the brand’s name, logos and trademarks to market and sell the project. It defines the licensed territory and project, the approval rights the brand keeps over marketing materials, the licence fee and the term. The developer should confirm that the brand owns the marks in the UAE and that the licence is recorded where required. Our article on who owns your brand name in the UAE explains trademark ownership.
The technical services agreement
The technical services agreement requires the developer to design, build and fit out the project to the brand’s standards. The brand reviews designs, approves materials and inspects the works before handover, for a separate fee. A developer should fix the standards at signature, because a brand that changes its standards during construction can increase costs without paying for them.
The management or services agreement
Where the brand manages the building after completion, a management or services agreement sets the services, the fees and the performance standards. It may be signed first with the developer and later taken over by the owners committee. A rental programme agreement may also allow owners to place units in a hotel’s inventory and share the income.
The sale and purchase agreement
The sale and purchase agreement with each buyer should describe the brand’s role accurately. It should state that the unit is associated with the brand rather than owned by it, that the brand or operator may change and that brand services carry their own fees. A brand acknowledgement signed by the buyer reduces the risk of claims based on what the marketing promised.
How fees are structured
Brand fees in a branded residence project come from three sources, and each one affects the developer’s margin or the owners’ operating costs.
The licence fee
The developer pays the brand a licence fee calculated as a percentage of the sale price of each unit, paid as sales complete or as buyers pay instalments. The percentage is commercial and negotiated. The developer should define the sale price used for the calculation and the timing of payment, so the brand is not paid on sales that are later cancelled.
Technical services fees
The brand charges a fee for design review and technical services during construction. This fee is paid by the developer and does not depend on sales.
Management and service fees
After handover, the brand’s management fee and the cost of brand services are paid through the service charge or as separate charges for additional services. Under Article 27 of Dubai Law No. 6 of 2019, a management entity may not collect amounts from owners without RERA’s approval of the budget, and RERA approves the budget only after a recognised audit firm has reviewed it. A brand fee that is not built into an approved budget cannot be collected through the service charge.
How Dubai’s jointly owned property law applies
Dubai Law No. 6 of 2019 sets the governance of every building with jointly owned units, and a branded residence must fit within it. The law divides projects into categories, and the category decides who manages the common parts.
Hotel projects
Article 2 defines a hotel project as jointly owned property licensed for use as a hotel establishment. Under Article 18, the developer must outsource the management of the common parts of a hotel project to a hotel project management company. The owners committee cannot take part in managing the hotel or its common parts. Under Article 20, the developer must issue building management regulations for the hotel project, which RERA must approve before any unit is sold.
Residential projects
Where the branded residences are not licensed as a hotel establishment, the general rules on management companies and owners committees apply. Under Article 18(c), the developer’s agreement with a management company needs RERA’s approval. An owners committee forms once owners of at least 10% of the units are registered, under Article 22, and it reviews budgets and the performance of the manager.
Developer control
A developer may be a member of the owners committee only while it owns unsold units, under Article 22(d). A brand that relies on the developer’s influence over the building should therefore expect that influence to decline as units are sold. Our article on joint ownership disputes under Dubai’s strata law covers conflicts between owners and managers.
Marketing a branded project
Every advertisement for a Dubai property, including brand marketing for an off-plan project, needs a Dubai Land Department advertising permit. The department has fined real estate companies for advertising without meeting its requirements.
Brand marketing also creates expectations that buyers may later rely on. Claims about hotel services, amenities or rental returns should match what the agreements require the brand to provide. Where the marketing promises more than the contracts deliver, buyers may bring claims against the developer for misrepresentation.
Termination and de-branding
A brand licence ends on expiry of its term, on termination for breach or on events such as a change of control of the developer. When it ends, the developer and the building lose the right to use the brand, and units bought at a premium may lose value.
Termination rights
The developer should limit the brand’s right to terminate to serious, defined breaches, with notice and a period to cure. It should also ask for the licence to survive a change in the hotel management agreement, where the residences and a hotel share the same brand. A brand that can withdraw whenever the hotel agreement ends leaves the residences exposed to a dispute they did not cause.
De-branding obligations
The agreement should state what happens on termination: how long the developer and the owners have to remove signage, what must be changed in the building and who pays. It should also address unsold units, marketing already in circulation and sales agreed before termination.
Protecting buyers and the developer
The sale documents should tell buyers that the brand may change and that the unit is associated with the brand rather than guaranteed to carry it. That disclosure does not remove every risk, but it limits claims that the developer promised a permanent brand.
Common mistakes in branded residence projects
Signing the licence before the management structure is fixed. A brand licence that assumes the brand will manage the building fails if the project’s category under Dubai Law No. 6 of 2019 requires a different structure.
Leaving the fee base undefined. A licence fee calculated on undefined sale prices invites disputes about discounts, cancellations and resales.
Promising brand services the service charge cannot fund. Service charges need RERA approval, so brand services outside the approved budget have no funding source.
Accepting open-ended standards. A brand that can change its design standards during construction can raise the developer’s costs without limit.
Ignoring de-branding. A licence that says nothing about signage, timing and cost on termination leaves the developer and owners to argue about it later.
What developers should do next
- Choose the project category early. Decide whether the project will be licensed as a hotel establishment, because Dubai Law No. 6 of 2019 sets the management structure from that choice.
- Confirm the brand’s trademark position. Check that the brand owns its marks in the UAE and that the licence covers real estate use.
- Define the fee base and timing. Tie the licence fee to completed and paid sales, with clear treatment of cancellations and discounts.
- Fix the design standards at signature. Attach the standards to the technical services agreement and require the brand to pay for later changes.
- Align the sale documents. Include a brand acknowledgement and accurate descriptions of services and fees in every sale and purchase agreement.
- Negotiate termination and de-branding terms. Limit termination rights and set out the signage, timing and cost obligations on exit.
How should developers structure a branded residence project in Dubai?
Developers should structure a branded residence project as a set of linked agreements that match Dubai’s jointly owned property rules. The brand licence, technical services, management arrangements and sale documents must all say the same thing. The structure must be settled before units are sold, because RERA approvals and building management regulations depend on it.
The main risk is a mismatch between the brand’s expectations and the building’s legal framework. A brand that expects to control a building that the law places under an owners committee, or fees that the service charge cannot fund, will produce disputes after handover.
The commercial consequence is the value of the premium. A project that loses its brand, or whose owners refuse to fund it, can lose the price advantage that justified the licence fee.
For developers and brands planning branded residence projects, our real estate team advises on brand licence agreements, management structures under Dubai Law No. 6 of 2019 and termination and de-branding terms.
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