Ramzi Yakoubi

Guide 02

Escrow and RERA protections for off‑plan buyers.

How Dubai law protects your payments while a project is being built, what that protection does not cover, and what to check before you pay.

By Ramzi Yakoubi, RERA-licensed broker (BRN 82302) · Last updated

In short: under Dubai Law No. 8 of 2007, money you pay for an off-plan unit goes into an escrow account dedicated to that project and regulated by the Dubai Land Department. It is released to the developer against construction progress. Escrow protects how your money is used. It does not guarantee the timeline, the quality or the future value.

What escrow is

An escrow account is a bank account held for a specific project. Buyers' payments go in, and the developer can draw funds only for that project's construction, under the oversight of the Dubai Land Department and its regulatory arm, the Real Estate Regulatory Agency (RERA). Your money cannot legally be redirected to the developer's other projects.

The legal framework

  • Law No. 8 of 2007 requires developers to open an escrow account for each off-plan project and to deposit buyer payments into it.
  • Law No. 13 of 2008 created the interim real estate register, known as Oqood, where off-plan sales are recorded before a title deed can be issued. It has since been amended, including rules on what happens when a buyer misses payments.

Law No. 19 of 2017, which replaced Article 11 of Law No. 13 of 2008, sets out what happens if a buyer defaults. The Dubai Land Department first gives the buyer 30 days' notice to pay and can mediate a settlement. If the default continues, what the developer may do depends on how far the unit is built:

  • More than 80% complete: keep the contract and claim the balance, have the unit sold at public auction, or terminate and retain up to 40% of the unit's value.
  • 60% to 80% complete: terminate and retain up to 40% of the unit's value.
  • Under 60% complete, construction started: terminate and retain up to 25% of the unit's value.
  • Not started, for reasons outside the developer's control: terminate and retain up to 30% of the amounts paid.

Any amount above these limits must be refunded to the buyer. If RERA cancels a project, buyers are refunded in full. Read the default and termination clauses in your sale and purchase agreement carefully.

What escrow does not cover

  • Delays. Escrow controls how funds are released. It does not make a developer build faster.
  • Quality. Funds released against progress do not guarantee finishes or workmanship.
  • Market value. The price at handover may be higher or lower than what you paid.
  • Payments made outside escrow. Money paid to the wrong account may not be protected.

This is why the developer's track record still matters as much as the legal protection.

Checklist before you pay

  1. Confirm the project is registered with the Dubai Land Department, through official channels such as the Dubai REST app.
  2. Check that your sale and purchase agreement names the project escrow account.
  3. Pay only into that escrow account, and keep every receipt.
  4. Make sure your purchase is registered on Oqood and keep the certificate.
  5. Read the clauses on delays, default and termination before signing.

This guide is general information, not legal advice. For a specific contract, take advice from a qualified UAE lawyer. I can walk you through the practical side.