Research | Off-Plan | All Markets

Escrow and RERA: How Off-Plan Buyer Protection Actually Works

Verified: 17 October 2026 · Last Updated: 17 October 2026 · Author: Straits Properties LLC

• It does not guarantee completion on time.

• It does not protect the price you paid.

• It cuts both ways: if you stop paying, the developer can terminate and keep up to 25% of the price (project below 60% complete) or up to 40% (60% or more complete).

What is an escrow account in Dubai?

An escrow account is a bank account opened in the name of a single off-plan project, with an escrow agent registered by the DLD, into which all off-plan buyer payments and any project financing must be deposited. The rules come from Law No. 8 of 2007 Concerning Escrow Accounts for Real Estate Development:

• One project, one account (Article 9). A developer with several projects must keep a separate account for each.

• Dedicated to construction (Article 9). No attachment may be imposed on the account for the benefit of the developer's creditors.

• Project loans go in too (Article 13). If a developer mortgages the project to borrow, the lender deposits the loan into the escrow account.

• Reporting (Article 11). Escrow agents must give the DLD regular revenue and expenditure statements, and the DLD may audit them.

• Buyer access (Article 12). Depositors may see and copy their own accounting records.

• 5% retention (Article 14). After the completion certificate, the agent retains 5% of the account's total value for one year from registration of units in buyers' names.

How does a project get approved for off-plan sale?

Before selling off-plan, a developer must apply to the DLD to open an escrow account. Under Article 6, the application includes:

• a trade licence and the title deed to the land

• approved initial designs and engineering plans

• a financial statement of estimated costs and revenues certified by an accredited auditor

• an undertaking to start construction

• a standard sale contract

The DLD FAQ says the escrow account is opened after RERA approves the project. The DLD's Project Status Enquiry service then shows the project's registration and escrow details.

A developer that fails to start construction within six months of permission to sell off-plan, without an acceptable reason, can be struck off the developer register (Article 17).

How does the developer withdraw money from escrow?

Withdrawals go through a DLD service called "Receive a payment from the project's escrow account". The developer applies, the escrow agent provides documentation, and the DLD approves. The DLD FAQ and market practice tie releases to construction progress certified by the project's engineering consultant. Law No. 8 of 2007 also makes it a crime for a consultant to knowingly certify fraudulent reports (Article 16).

We have not found, in the legislation we reviewed, a published schedule setting exactly how much may be released at each stage. The release rules sit in DLD and RERA implementing regulations and in each escrow agreement. Straits Properties to confirm the current release framework with the DLD before publication.

How can I verify an off-plan project before paying?

Check five things, and keep screenshots:

1. Project registration and escrow details on the DLD's Project Status Enquiry or the Dubai REST app, matched to the developer's payment instructions.

2. The completion percentage shown on the DLD record, compared against the developer's marketing.

3. The developer's registration, and whether the project is in the DLD's system under the developer's own name.

4. The SPA's anticipated completion date, grace period and delay remedies.

5. Oqood registration of your purchase once you have paid the booking amount. This puts your interest on the DLD's interim register.

Treat any of these as a warning sign:

• a request to pay a corporate or personal account rather than the project's escrow account

• a reservation with no SPA or Oqood registration

• a completion percentage that hasn't moved across several of your instalments

• a developer reluctant to give you the escrow details in writing

What happens if construction stalls or a project is cancelled?

If a project cannot be completed, Article 15 of Law No. 8 of 2007 requires the escrow agent, after consulting the DLD, to take the measures needed to preserve depositors' rights. That means either ensuring the project is completed or refunding depositors.

Under Article 11(b) of Law No. 13 of 2008, as replaced by Law No. 19 of 2020, the developer must refund all buyer payments in two cases: when RERA cancels the project by a final reasoned decision, or when work never started for reasons beyond the developer's control. The refund follows the Law No. 8 of 2007 procedures.

What the law does not tell you is how long a stalled-project resolution takes, or whether escrow balances will cover every refund. That depends on how much was legitimately drawn for construction and on what the developer can pay. Disputes over unfinished and cancelled projects go to a Special Tribunal set up by Decree No. 33 of 2020. We have not found published statistics on refund timing.

What happens if I stop paying?

The same law protects the developer. Under Article 11(a) of Law No. 13 of 2008, as replaced by Law No. 19 of 2020:

• the developer notifies the DLD

• the DLD gives you 30 days' written notice and may mediate a settlement

• if you don't pay or settle, the DLD issues a document confirming the procedure and the project's completion percentage

• the developer may then act without going to court