Is buying off-plan in Dubai safe? How escrow protects you

Regulated rather than guaranteed: the law protects your money, not the timetable or the price. Since 2007 every dirham an off-plan buyer pays must go into an escrow account in the project's name at a bank approved by the Dubai Land Department, ring-fenced from the developer's creditors and spent only on that project (Government of Dubai, Law 8 of 2007). If RERA cancels the project, the developer must refund all payments (Government of Dubai, Law 19 of 2017).

Key facts

• Retention: 5 per cent of each account is held back at the completion certificate and released a year after the units are registered (Government of Dubai, Law 8 of 2007).
• Release: only on the Land Department's activation terms, against a Department technical report under three months old (Dubai Land Department, Escrow Account activation, 3 Sep 2026).
• Entry price for a developer: a 30 per cent guarantee and a fee of AED 150,000 plus AED 20 (Dubai Land Department, Register Project, 3 Sep 2026).

What is an escrow account, and what does Law 8 of 2007 require?

An escrow account is the bank account of a single development into which every payment by an off-plan purchaser or project lender is deposited (Government of Dubai, Law 8 of 2007). The bank must be one of the Land Department's approved trustees, 29 institutions on 8 September 2026 (Dubai Land Department, Approved escrow account trustees, 3 Sep 2026).

Three provisions do the protecting. The account is opened in the name of the project, under an agreement lodged with the Land Department. It is dedicated exclusively to that project's construction, and no attachment may be placed on the deposits for the benefit of the developer's creditors. And the bank must send the Department regular statements, which it may audit at any time (Government of Dubai, Law 8 of 2007, Arts 7, 9 and 11).

How does money leave the account?

On terms the Land Department sets, not the developer. Before anything is disbursed the account must be activated, which requires the project payment plan, compliance with the Department's financial risk standards, and a Department technical report under three months old with no red flags (Dubai Land Department, Escrow Account activation, 3 Sep 2026).

Release then follows how the project was secured: under a bank guarantee, construction works up to 20 per cent completion, to the value of the guarantee; where the developer or its bank deposited funds, no more than was deposited; under the solvency route, a percentage of the works after 20 per cent completion, on a recent Department technical report (Dubai Land Department, Escrow Account activation, 3 Sep 2026). Law 8 of 2007 creates the account; the Department's activation terms govern what leaves it.

Once the completion certificate is issued, the bank retains 5 per cent of the account and releases it one year after the units are registered in the purchasers' names (Government of Dubai, Law 8 of 2007, Art. 14).

What must a developer do before it can sell?

No developer may operate unless entered in the Land Department's register and licensed, or advertise off-plan without written authorisation (Government of Dubai, Law 8 of 2007, Arts 4 and 5). A sale made before the authorities approve commencement is void (Government of Dubai, Resolution 6 of 2010, Art. 11).

Registering the project is the step that opens the escrow account. The Land Department's current published requirements are an ownership deed, since preliminary sales certificates are not accepted; registration in Trakheesi; approved plans; and a 30 per cent guarantee, met by completing 30 per cent of construction, a bank guarantee covering 30 per cent, or a 30 per cent cash deposit. The fee is AED 150,000 plus AED 20 (Dubai Land Department, Register Project, 3 Sep 2026).

Two thresholds, two purposes: the 30 per cent guarantee is a condition of registering the project; the 20 per cent completion mark belongs to the activation terms described above.

What happens if a project stalls or is cancelled?

Where a project is not completed, the escrow agent must, after consulting the Land Department, act to preserve depositors' rights and ensure the project is completed or depositors refunded (Government of Dubai, Law 8 of 2007, Art. 15). Where RERA cancels a project by reasoned decision, the developer must refund all payments made by purchasers under the procedures of Law 8 of 2007 (Government of Dubai, Law 19 of 2017, Art. 11).

Disputes go to the Special Tribunal for Unfinished and Cancelled Real Property Projects, created by Decree 33 of 2020. It may order the escrow agent or the developer to refund amounts deposited in the escrow account or paid to the developer, and its awards are not open to ordinary appeal (Government of Dubai, Decree 33 of 2020, Arts 7 and 11).

What does escrow not protect against?

Delay, quality and value. We find nothing in Law 8 of 2007, Law 13 of 2008 as amended, or Decree 33 of 2020 that gives a buyer a remedy for late delivery, finish quality or a fall in market value. Escrow protects the money paid, not the timetable or the outcome; remedies for delay are those in the sale and purchase agreement. The one quality-adjacent rule is that a delivered net area more than 5 per cent smaller than agreed must be compensated (Government of Dubai, Resolution 6 of 2010, Art. 13).

Hence the trusted portals' advice: confirm registration, match the escrow account on the contract to the project, never pay a third-party account, and check that payment milestones follow construction rather than the calendar (Betterhomes, 25 Aug 2026; Property Finder, 2 Sep 2026).

Seven checks before you pay a deposit

All are free, on dubailand.gov.ae or in Dubai REST.

Sources: Dubai Land Department, the service pages named in the Where column, all updated 3 Sep 2026; Dubai Land Department, 18 Apr 2023.

Our view

In our experience the escrow system does what it was designed to do: it separates the buyer's money from the developer's balance sheet. The failures we see are rarely failures of the law. They are payments made to an account that was not the project's, deposits handed over at exhibitions, where only preliminary reservations are permitted (Dubai Land Department, Real Estate Ad Permit, 3 Sep 2026), and contracts signed before anyone looked up the project number.

We advise treating the seven checks as a condition of the deposit, not a formality after it. Set the payment plan against the completion percentage: a schedule that front-loads the price puts your money well ahead of the building. And keep the limits in mind. In a cancellation the law requires a refund of what you paid; it does not return your time or underwrite the price. For Davies+Harrison clients, payments, documents and handover progress live in D+H Invest, our private investor platform, so client and adviser see the same picture.

Davies+Harrison is DAH Real Estate Brokerage L.L.C., RERA ORN 53447.