How escrow protects your money on a Dubai off-plan purchase
Every off-plan project in Dubai must hold buyer payments in a project-specific escrow account at a bank approved by the Dubai Land Department, under Law No. 8 of 2007. The developer cannot take your money directly. Funds are released against construction progress certified by an appointed engineer, which is what stops payments funding a different project.
What the law actually requires
Dubai Law No. 8 of 2007 on Escrow Accounts for Real Estate Development requires any developer selling off-plan to open a separate escrow account for each project, registered with the Dubai Land Department. Buyer payments go into that account and nowhere else.
How the developer draws money out
Not freely. Withdrawals are tied to certified construction progress, and a portion — commonly 5% — is retained for a year after handover to cover defects. The account is audited, and the Land Department can freeze it.
What escrow does not protect against
Escrow protects against your money being diverted. It does not protect against delay, against a design changing within the tolerances the SPA allows, or against the market moving. Those are separate risks with separate remedies.
How to check it yourself
Ask the developer for the escrow account number and the name of the bank, and confirm the project is registered with the Dubai Land Department. A developer who hesitates on that question has told you something.
| Protects you from | Does not protect you from |
|---|---|
| Payments funding another project | The project completing late |
| A developer withdrawing before building | Market prices falling before handover |
| Funds vanishing on developer insolvency | Finish quality below your expectation |
| Unregistered, unsupervised selling | Layout changes the SPA permits |
What people get wrong
- Escrow is not insurance. It controls where money sits and when it moves. It is not a guarantee that the building finishes, and no one should describe it that way to you.
- Pay into the escrow account, never to an individual. Every legitimate payment goes to the project escrow account named in your SPA. A request to pay a personal or company account outside it is the clearest warning sign in this market.
The Dubai areas we cover
With the number of off-plan projects we hold in each.
Common questions
Yes, for off-plan sales by a registered developer in Dubai. The requirement comes from Law No. 8 of 2007 and is administered by the Dubai Land Department, which registers the account alongside the project.
You can ask for the account number and the bank, and they appear on your payment instructions. Developers expect the question from serious buyers, and we ask it on your behalf as a matter of routine.
The Dubai Land Department oversees cancelled projects and the liquidation of the escrow account. Outcomes depend on the case and how much was built; this is a situation to take specific legal advice on rather than rely on a general answer.
Other emirates have their own frameworks — Abu Dhabi, Sharjah and Ras Al Khaimah each regulate off-plan sales through their own authorities. The principle is similar; the detail and the regulator differ.
A retained portion is held after handover for the defects liability period, and it exists precisely so there is money left to fix things. Whether it covers a specific defect depends on the defect and the SPA warranty terms.
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