Where does an off-plan payment actually go?
Dubai regulates off-plan selling through a project escrow system. Under Law No. (8) of 2007 on escrow accounts%20of%202007.html), a developer wishing to sell units off-plan must apply to the Dubai Land Department to open an escrow account, and the payments made by purchasers or by project financiers are deposited with an escrow agent in the name of the development project itself rather than in the developer’s own trading account.
The same law controls who may sell at all. A developer must be entered in the Register of Real Estate Developers and licensed by the competent entities before carrying on development business, and advertising of off-plan units in local or international media is restricted.
The practical effect for a buyer is that instalments follow the project rather than the company behind it. Money held in the account is dedicated to the construction of that project, and withdrawals are a controlled process supervised by the Department rather than a matter for the developer alone.
How is the purchase recorded before the building exists?
A completed Dubai property is recorded in the Property Register. An off-plan unit is recorded separately in the Interim Property Register, created by Law No. (13) of 2008%20of%202008.html), in which sale contracts and other legal dispositions of off-plan units must be entered. In practice this is done through the Oqood system operated by the Land Department.
Once the completion certificate is issued by the competent entities, the Department registers sold units in the names of purchasers who have fulfilled their contractual obligations, moving the record from the interim register into the main one.
Escrow and registration do different jobs. One governs where the money sits; the other records the buyer’s claim to a unit that does not yet physically exist. A buyer needs both, and neither is optional.
What happens if the project stalls or is cancelled?
The Real Estate Regulatory Agency reviews project status periodically. The Land Department’s published guidance explains that where construction is stalled or progress is minimal the developer is contacted and given a period to correct the position, and that cancellation procedures may be started where there is no justification for the delay.
The Department’s explanatory notes on Article 11%20of%20Law%20No.%20(19)%20of%202017.html) state that where a project is cancelled by a reasoned decision of the regulator, the developer must refund the payments made by purchasers under the procedures set out in the 2007 escrow law. That law also provides that escrow money is dedicated exclusively to the project and cannot be attached for the benefit of the developer’s own creditors, and that where an emergency prevents completion the escrow agent must take measures to preserve depositors’ rights, including securing refunds.
Purchaser default sits on the other side of the same article. Article 11 of the 2008 law, as amended in 2017, sets out how a contract is unwound when the buyer fails to meet its obligations, with outcomes that turn on how far the project has progressed. The detail is contract-specific and is a question for a UAE-qualified lawyer.
What protection continues after handover?
Completion does not empty the account immediately. Under the escrow law the escrow agent must retain five per cent of the total value of each escrow account once the developer obtains the completion certificate, and the Land Department describes that sum as held for a year after completion so that defects can be addressed by the developer or contractor.
Release of the remaining project completion balance is itself a Department process with conditions attached, including clearance from the jointly owned property side where that applies. For a buyer, this is the part of the framework that reaches past the handover date.
What does escrow not cover?
Escrow answers one question well: whether the money is ring-fenced and released against progress. It does not tell a buyer whether the payment plan is balanced, whether the price is sensible against comparable evidence, how delay is treated in the contract, or what happens on specification changes. Those are commercial terms, and they are negotiated before signature or not at all.
Nor does it cover the buyer’s own funding chain. Registration fees and transaction costs sit outside the escrow structure, and money arriving from abroad must come through regulated channels with full know-your-customer checks and source-of-funds evidence. Where wealth is held in digital assets, conversion to dirhams runs through a VARA-regulated payment partner before any payment reaches a developer, and settlement can be handled through a DFSA-engaged escrow agent, which is a separate arrangement from the project escrow account required by Dubai law.
How can a buyer check all of this before paying?
Three checks come before any deposit. Confirm the developer and the project are registered, confirm that an escrow account exists for that project, and confirm that the payment instructions you are given name that project escrow account and no one else.
After that the work is contractual: milestone definitions, handover terms, penalties, and what the brochure does not say. Independent buy-side review is where those points are tested, because Revest acts for buyers and never for sellers or developers. Where a question is legal or tax-related, it belongs with a qualified adviser in that field.
