Buying off-plan: how escrow and payment plans protect you

Buying off-plan means paying for a home over two or three years before it exists. Dubai's answer to the obvious question, what happens to the money, is two laws and a register. This guide explains what they do, what they do not do, and what to check before each instalment, using the Dubai Legislation Portal's English text and the Dubai Land Department's (DLD) own pages.

Law No. 8 of 2007: the escrow account

Any developer who sells off-plan in Dubai must be entered in DLD's Register of Real Estate Developers and may not advertise units without DLD's written authorisation. Before selling, the developer applies to DLD to open an escrow account, filing the land title, approved designs, an audited cost and revenue statement and its standard sale contract.

The account is opened in the name of the project with an escrow agent, a bank or financial institution accredited by DLD. Under Article 9 it is dedicated exclusively to the construction of that project, and no attachment may be placed on it for the benefit of the developer's creditors. Each project has its own account. If the developer borrows against the project, the lender must pay the loan into the same account. DLD's FAQ adds that payments out of the account go only to the project's contractors, consultants and marketing, and that marketing is capped at 5% of total sales.

Payments are released against progress. DLD's FAQ describes the mechanism: the escrow agreement lists the construction stages, the developer requests a release when a stage is done, and the escrow agent's engineer visits the site and verifies it before the agent disburses.

After the completion certificate, Article 14 requires the escrow agent to hold back 5% of the total value of the account for one year from the registration of units in the buyers' names. DLD's FAQ describes this as security for defects that appear at completion or within the first year.

Article 15 covers the emergency case. If a project is not completed, the escrow agent, in consultation with DLD, must act to preserve depositors' rights, by completing the project or refunding them. A developer that fails to start work within six months of permission to sell is struck off the register.

Law No. 13 of 2008: the interim register

Every off-plan sale must be entered in DLD's interim real property register, the record most buyers know as Oqood. Under Article 3, a sale that is not registered is void. Under Articles 4 and 10, no developer may sell off-plan before it holds the land and the approvals. DLD's service page requires the sale contract to be registered within 90 days of signing. Article 12 protects the area: if the delivered unit is smaller than sold, the developer must compensate the buyer, unless the shortfall is inconsequential.

Every off-plan sale must be entered in DLD's interim real property register, the record most buyers know as Oqood.

If you stop paying: Article 11, as amended by Law No. 19 of 2020

The 2020 amendment replaced the original Article 11 with a procedure the developer must follow, in this order.

1. The developer notifies DLD of the breach on DLD's form.
2. DLD verifies it and serves the buyer a written 30-day notice to perform. Where possible, DLD mediates a settlement, which is attached to the contract.
3. If the notice expires without payment or settlement, DLD issues a document confirming the developer followed the procedure and stating the project's percentage of completion, calculated under RERA's rules.

What the developer may then do depends on that percentage:

• Over 80% complete. Keep the contract, retain what has been paid and claim the balance; or ask DLD to sell the unit at public auction, with the buyer liable for the costs; or terminate, retain up to 40% of the unit's contract value and refund the rest.
• Between 60% and 80%. Terminate, retain up to 40% and refund the rest.
• Under 60%, with construction started. Terminate, retain up to 25% and refund the rest.

In each termination case the refund is due within one year of termination or within 60 days of the unit's resale, whichever comes first.

If the developer never started work for reasons beyond its control, or RERA cancels the project by a final reasoned decision, Article 11(b) requires the developer to refund all payments under the procedures of Law No. 8 of 2007. Article 11(g) preserves the buyer's right to go to court or arbitration. DLD's FAQ adds the practical side: once a project is cancelled, DLD's liquidation section takes over the escrow account and asks the developer to repay buyers within 60 days of the cancellation decision.

What the laws do not do

DLD's FAQ is direct about one point: DLD has no power to terminate a contract at the buyer's request. A buyer who wants out of a project that is late but not cancelled goes to the real estate court. The laws ring-fence the money and set the rules for default; they do not promise a delivery date.

Before each payment

• Pay only into the escrow account. DLD's FAQ says the escrow account details are printed on the invoice. Match them before you transfer.
• Check the completion percentage. DLD's FAQ says a buyer receiving a payment request is entitled to a letter from the DLD-approved project consultant stating the current completion percentage, and is not obliged to pay until the project has reached the stage the schedule ties the instalment to. The percentage can be tracked on DLD's project status service.
• Check the registration. Confirm the project and the developer are registered with DLD and that the Oqood registration is in your name within 90 days.
• Keep the 5% retention in mind. Report defects in the first year after handover while the retention still sits in escrow.

Sources

• Law No. 8 of 2007 Concerning Escrow Accounts for Real Estate Development in the Emirate of Dubai (escrow account, retention, emergency measures): https://dlp.dubai.gov.ae/Legislation%20Reference/2007/Law%20No.%20(8)%20of%202007.html. Checked 29 September 2026.
• Law No. 13 of 2008 Regulating the Interim Real Property Register in the Emirate of Dubai (Articles 3, 4, 10 and 12): https://dlp.dubai.gov.ae/Legislation%20Reference/2008/Law%20No.%20(13)%20of%202008.html. Checked 29 September 2026.
• Law No. 19 of 2020 Amending Law No. 13 of 2008 (the replaced Article 11): https://dlp.dubai.gov.ae/Legislation%20Reference/2020/Law%20No.%20(19)%20of%202020%20Amending%20Law%20No.%20(13)%20of%202008%20Regulating%20the%20Interim%20Real%20Property%20Register%20in%20the%20Emirate%20of%20Dubai.html. Checked 29 September 2026.
• Dubai Land Department, Frequently asked questions, Development services (disbursement, retention, completion letters, liquidation, invoices): https://dubailand.gov.ae/en/frequently-asked-questions/. Checked 29 September 2026.
• Dubai Land Department, Request to register the initial sale (90-day registration): https://dubailand.gov.ae/en/eservices/request-to-register-the-initial-sale/. Checked 29 September 2026.

Figures from official sources as checked on 29 September 2026. Not financial, legal or immigration advice.