Escrow Accounts in Dubai: A Complete Guide for Property Buyers

What is an Escrow Account?

An escrow account is a regulated bank account in which a buyer's payments for an off-plan property are deposited throughout the construction period. In Dubai, escrow accounts are overseen by the DLD and RERA to ensure funds are used strictly for project-related purposes.

An escrow account acts like a secure intermediary between the buyer and the developer. The developer may only access funds after achieving specific, RERA-approved construction milestones. This system protects buyers’ money and ensures it is used only for the development of the registered project.

How Escrow Accounts Work

When a buyer purchases an off-plan property in Dubai, the developer must have a dedicated escrow account for that project. Buyers then make payments into this account according to the agreed payment plan.

Funds in the escrow account can only be used for core project expenses such as land payments, construction, consultancy and approved sales and marketing costs. These funds are released in stages once the relevant construction milestones are certified by the escrow account trustee. If a developer requires additional funds, they must comply fully with RERA’s conditions before requesting any further release.

Regulatory Requirements and Legal Framework

The DLD enforces strict regulations governing escrow accounts in Dubai to enhance transparency and safeguard buyers. Key legislation includes:

• Law No. 7 of 2007 Concerning Land Registration in Dubai (as amended): Legal framework for land registration, including provisions related to escrow practices.

• Law No. 13 of 2017 Regulating the Real Estate Sector in Dubai (as amended): Mandates the use of escrow accounts for off-plan projects and outlines compliance obligations for developers.

Any payment made by a buyer for an off-plan property must be deposited into the project’s designated escrow account. Developers cannot access these funds until they meet the defined regulatory requirements and verified construction progress benchmarks.

Why Escrow Accounts Protect Buyers and Investors

Escrow accounts offer significant security and transparency for buyers investing in Dubai’s off-plan real estate market. They minimise the risk of misuse of funds, fraud or project abandonment, as money is released only once contractual milestones are achieved.

In the event of serious delays, cancellation or bankruptcy of the developer, escrow regulations ensure that buyers’ investments are protected and funds can be recovered in accordance with RERA rules.

How to Set Up an Escrow Account

Only licensed real estate developers can set up an escrow account for an off-plan project in Dubai. A separate escrow account must be opened for each development. The process typically involves:

1. Logging into the Oqood system and selecting the “Escrow Account Link” option.

2. Submitting the application, which is then transferred to the assigned escrow trustee.

3. The trustee reviewing documents, verifying compliance and forwarding the request to the TAS system.

4. The escrow account department approving or rejecting the application, with the outcome updated in the system.

The project payment plan is the primary document required when establishing an escrow account.

Benefits of Escrow Accounts in Dubai Real Estate

Escrow accounts offer several advantages for buyers, developers and the wider market:

• Stronger Security – Funds are protected under Dubai property law and safeguarded from misuse.

• Higher Transparency – Detailed terms for fund release are clearly defined, ensuring all parties understand obligations.

• Full Record of Transactions – Escrow trustees document and track all payments, reducing the risk of default or fraud.

• Smoother Transactions – Escrow services simplify complex multi-party agreements and ensure clarity at every stage.

Key Considerations for Investors and Developers

Buyers investing in off-plan property should conduct due diligence by reviewing:

• The developer’s reputation and track record

• Previous project quality and delivery timelines

• Developer financial stability

• Feedback and testimonials from past buyers

Developers must also ensure that buyers can meet their financial commitments throughout the payment schedule.

Conclusion: Invest Securely with Escrow-Protected Off-Plan Properties in Dubai

Escrow accounts are a cornerstone of buyer protection in Dubai’s off-plan real estate market. By ensuring funds are held securely and released only in line with verified construction milestones, they provide transparency, financial security and confidence for both local and international investors. Backed by strict RERA and DLD regulations, escrow accounts help safeguard your off-plan investment and minimise risk, making Dubai one of the most secure and well-regulated property markets in the world.

If you are considering buying an off-plan property in Dubai, choosing developments with strong escrow compliance and reputable developers is essential for maximising long-term returns. Engel & Völkers can guide you towards high-ROI, escrow-protected investment opportunities with trusted developers and secure payment plans.