Dubai escrow law is Law No. 8 of 2007, and it requires every developer selling off-plan to pay buyers’ money into a project account controlled by a bank. The developer cannot sell or advertise without being on the DLD register and holding a permit, must open one account per project and only gets paid as the bank checks on site that each stage has been built. The developer’s creditors cannot seize that account, and on completion the bank holds back 5% until one year after the homes are registered to the buyers. Anyone who commits fraud with this money faces prison and fines from AED 100,000, and the developer can lose its registration. What the law does not cover is the handover date or anything you pay outside the account. We handle every step of your purchase with you, and show you how to check the account before each payment.
In this guide12 sections
- What Law No. 8 of 2007 is and who it applies to
- Dubai escrow law, article by article
- How your money is released as construction progresses
- The 5% retention: when it is held and when it is released
- How the law protects you as a buyer
- Penalties: what happens if a developer breaks the law
- If the project stalls or is cancelled
- What Dubai escrow law does not cover
- How to check the developer complies, before you pay
- Buying from the UK, the US or elsewhere
- Things to keep in mind
- Frequently asked questions
| What the law requires of the developer | How it protects you | Article |
|---|---|---|
| Being on the developer register and licensed | You know who is building before you pay | 4 |
| A DLD permit to advertise | Legal ads carry their permit | 5 |
| One escrow account per project | Your money is not mixed with other projects | 9 |
| Getting paid only for verified work | Money leaves as the building progresses | 7 |
| Leaving 5% held back on completion | Money remains to fix defects | 14 |
| Paying its project loans into the account too | Financing is watched | 13 |
| Answering for fraud | Prison or a fine from AED 100,000 and removal from the register | 16 and 17 |
What Law No. 8 of 2007 is and who it applies to
Law No. 8 of 2007 governs the escrow accounts of property developments in Dubai. It was signed on 6 May 2007 and has been in force since its official publication on 28 June that year. It is the rule that made buying off-plan in Dubai very different from before: buyers’ money stopped going to the developer and started going into a project account controlled by a bank.
It applies to every developer that sells homes off-plan in Dubai and receives payments from buyers or from whoever finances the project. That includes both the master developer of an area and the one building each tower. Developers already selling in 2007 had six months to comply, and had to pay into the account what they had already collected.
What an escrow account is and how to check a project’s account is covered in the glossary page on the escrow account. Here we focus on what the law makes the developer do and how it protects you as a buyer. It is overseen by RERA, the property regulator that sits within the DLD.
Dubai escrow law, article by article
The law is short: 22 articles. The first ones define terms and the last ones deal with fees and entry into force. These are the ones that matter to you as a buyer:
| Article | What it says | What it means for you |
|---|---|---|
| Art. 3 | The law applies to every developer selling off-plan and taking payments from buyers or financers | If you buy off-plan, your purchase is covered |
| Art. 4 | Nobody can develop without being on the DLD developer register and licensed | You can check the developer on the register |
| Art. 5 | Advertising or exhibiting off-plan homes needs written DLD permission | An ad without a permit is a warning sign |
| Art. 6 | To open the account the developer files its licence, land title, approved plans, audited costs and revenues, and its standard contract | The project is reviewed before it can be sold |
| Art. 7 | The account is opened by agreement with a trustee bank, in the project’s name, with a copy to the DLD | The bank controls the money, not the developer |
| Art. 8 | The buyer can ask the DLD to note the purchase on the plot’s register entry | Your purchase is tied to the land |
| Art. 9 | One account per project, only for building it and safe from the developer’s creditors | Your money does not fund other projects or debts |
| Arts. 10 and 11 | Trustee banks are on a DLD register and send it statements of income and spending | Someone outside watches the account |
| Art. 12 | Depositors, or their representatives, can see their own accounting records and ask for copies | You can ask for the detail of your payments |
| Art. 13 | If the developer borrows against the project, the loan money goes into the account | Financing is watched too |
| Art. 14 | With the completion certificate, the bank holds 5% until one year after the homes are registered | Money is set aside for defects |
| Art. 15 | If the project is not completed, the bank, with the DLD, acts to finish it or refund the money | The law has a plan B |
| Art. 16 | Prison, a fine of at least AED 100,000, or both, for the frauds it lists | Breaking it has criminal consequences |
| Art. 17 | Removal from the register for bankruptcy, not starting work within 6 months without reason, or fraud | A developer can lose the right to sell |
Notice two things. First, the law puts control of the money in the hands of an approved trustee bank, not the developer. Second, before selling a single home the developer has to file the project documents, the land title and audited accounts. That does not guarantee the project will go well, but it does filter out anyone with no land and no plans.
How your money is released as construction progresses
The account is run under an agreement between the developer and the bank. That agreement sets out the main construction stages that must be finished before money is released. When one is complete, the developer notifies the bank and requests payment to its suppliers. An engineer from the bank visits the site and, if the stage is confirmed as done, the bank pays.
The money in the account cannot be used for just anything. As a general rule it only pays the project’s contractors, consultants and marketing, and marketing is capped at 5% of total sales. The developer’s other costs do not come out of it. If the developer borrows against the project, that loan also goes into the account and follows the same rules.
As a buyer, you are entitled to know the completion percentage before paying an instalment tied to a milestone. You can see it in the Dubai REST app or the DLD project status page, with the date of the latest inspection. And the implementing bylaw of Law No. 13 of 2008 lists, among the grounds on which a buyer can ask the court to terminate the contract, a developer failing to link payments to the construction milestones proposed by RERA.
To see what you would pay at each stage, the off-plan calculator already has an AED 1,000,000 example on a 60/40 plan. How payments are split in the most common plans is in the guide to off-plan payment plans.
The 5% retention: when it is held and when it is released
This is Article 14 and one of the most quoted. When the developer obtains the completion certificate, the bank must hold back 5% of the total value of the escrow account. That money stays in the account and is only released to the developer one year after the homes are registered in the buyers’ names.
Its purpose is to make the developer or contractor fix promptly the defects visible on completion and those that appear in the first year after handover. For example, if AED 200 million has gone into a project’s account, AED 10 million stays set aside during that year.
Watch out for two common mix-ups. The 5% is of the whole project account, not 5% of your price paid back to you. And it is separate from the developer’s legal liability, which covers structural defects for 10 years and installations for 1 year. To make the most of both, inspect the home with snagging before signing handover, as explained in the guide to handover and snagging in Dubai.
How the law protects you as a buyer
Read from the buyer’s side, the law gives you several specific protections:
- Your money is ring-fenced. The account is exclusive to the project and the developer’s creditors cannot seize it.
- Each building has its own account. If the developer has several projects, money from one does not pay for another.
- There is a bank in the middle. The trustee bank must be on the DLD register and send it statements of what comes in and goes out. The DLD can ask it for data at any time and audit it.
- You can see your own records. Depositors, or their representatives, have access to their own accounting records and can ask for copies.
- Your purchase is registered. The developer records your purchase in Oqood, and the law lets you ask the DLD to note it on the plot’s register entry too.
- There is a plan if work stops. If the project is not completed, the bank, in consultation with the DLD, must act to finish it or refund the buyers.
All of this works if you pay the right account. RERA forbids developers from collecting any project payment outside its escrow account, and registered agents like us must tell buyers to pay only into that account. Before each transfer, compare the number on your payment letter with the one on the project page. We help you do it for every payment.
Penalties: what happens if a developer breaks the law
Article 16 punishes with prison, a fine of at least AED 100,000, or both, anyone who:
- develops property without a licence;
- gives false documents or information to obtain one;
- knowingly sells homes in a fraudulent project;
- misappropriates money handed over to build;
- as an auditor, signs a false report or hides essential facts;
- as a consultant, certifies false reports on a project;
- as a developer, works with agents who are not on the DLD register.
These penalties apply on top of any in other laws. In addition, Article 17 strikes a developer off the register if it goes bankrupt, fails to start work within six months of its off-plan sales permit without an acceptable reason, loses its licence or commits some of the frauds above. Without registration, it cannot sell. And the implementing bylaw of Law No. 13 of 2008 lets RERA cancel a project for breaches of that Article 16.
RERA has repeated this in two recent circulars. In March 2025 it warned developers that marketing a project before registering it and opening its escrow account breaks the law, that every ad must carry its permit QR code and that they may not collect anything outside the account. In January 2026 it told agents not to promote any off-plan project without checking that it is registered with the DLD, has an approved escrow account and holds a RERA permit, on pain of fines, suspension or removal from the broker register. We work by those rules, and the guide to checking a Dubai real estate agent shows you how to check anyone.
If the project stalls or is cancelled
Here escrow law works together with Law No. 13 of 2008 and its bylaw. Only RERA can cancel a project, with a technical report. If it does, the money is refunded from the escrow account within 14 days, and if the account falls short the developer has 60 days to pay the rest before RERA takes it to court. The DLD liquidation section moves the money from the account into a DLD trust account and pays it out in full or pro rata, depending on what is there.
That is why it matters so much that your money is in the escrow account: what is there is what can be refunded. The full process, the deadlines and what you can claim for a delay are in the guide to off-plan delays and cancelled projects, and the other risks in the one on off-plan property risks in Dubai.
What Dubai escrow law does not cover
The law protects the money, not everything else. It helps to know where it stops:
| Situation | Does escrow law cover it? | What you do |
|---|---|---|
| What you pay the developer for an off-plan home | Yes: it goes into the project’s escrow account | Only pay into the account on your payment letter |
| The money being spent on your building | Yes: one account per project and milestone payments | Check the completion percentage before each milestone |
| Defects at completion | Partly: the 5% held for a year | Do your snagging before signing handover |
| The handover date | No: your contract sets it | Read the deadline and compensation in the SPA |
| A payment made outside the escrow account | No: that money is not ring-fenced | If asked to pay another account, stop and ask |
| A ready or resale home | No: the law covers off-plan sales | Payment goes through the DLD service centre |
| Prices going up or down | No | Run prudent numbers |
The handover date, the delay allowance and what you get if it is exceeded are set by your SPA, and vary from contract to contract. We go through it clause by clause in the guide to the Dubai SPA. And if you buy a ready home, your protection comes from DLD registration and payment on transfer day, not from an escrow account.
How to check the developer complies, before you pay
It is all done online, in minutes and from any country:
- The developer. That it appears on the DLD developer register in Dubai REST.
- The project. That it is registered, active and has its escrow account number.
- The account. That the number on your payment letter or SPA matches the one on the project page.
- Progress. The completion percentage and the date of the latest inspection before each milestone instalment.
- The ad. That it carries its permit and QR code, and that the QR opens that project.
These are the same checks as in the guide to checking a Dubai off-plan project is safe. What the law does not tell you is whether a developer delivers on time: that shows in its track record, as covered in the guide to choosing a Dubai developer.
Buying from the UK, the US or elsewhere
Dubai escrow law protects you in the same way wherever you live: it makes no distinction between residents and foreigners. What changes is how your money reaches the account. Make each transfer in dirhams to the escrow account on your payment letter, with the reference you are given, and keep every receipt, because you will need it for your records and when you sell.
You do not need to open an account in Dubai to pay, or travel to do it. If your money is in pounds, euros or another currency, each instalment costs you more or less depending on that day’s rate; in dollars there is no currency risk, as the dirham is pegged to the dollar. How to send money is in the guide to sending money to Dubai for property.
Things to keep in mind
- Dubai escrow law is Law No. 8 of 2007 and binds every developer selling off-plan.
- Without DLD registration, a licence or an advertising permit, a developer cannot sell off-plan.
- Each project has its own account, the bank controls it and the developer’s creditors cannot seize it.
- Money is released when a bank engineer checks each stage on site, and marketing cannot exceed 5% of sales.
- On completion, the bank holds back 5% until one year after the homes are registered.
- Fraud with this money is punished with prison, a fine from AED 100,000 or both, and the developer can lose its registration.
- The law does not set the handover date or protect anything you pay outside the escrow account.
If you are thinking of buying off-plan, we handle every step with you: we show you how to check the registration, the account and construction progress, go through the payment plan and the SPA and support you up to registration and handover.
Frequently asked questions
What does Dubai escrow law say?
That every developer selling off-plan must pay buyers’ money into a project account controlled by a bank, which only releases it as construction progresses. It is Law No. 8 of 2007.
What does Dubai escrow law require of developers?
To be registered with the DLD, get permission to advertise, open one escrow account per project, be paid only for verified work and leave 5% held back on completion.
When does the bank release money from the escrow account?
When construction completes one of the stages set in the agreement with the bank and a bank engineer confirms it on site.
What is the 5% retention under Dubai escrow law?
On the completion certificate, the bank holds 5% of the account until one year after the homes are registered, to cover defects.
What penalties does Dubai escrow law set?
Prison, a fine of at least AED 100,000, or both, for the frauds in Article 16, and removal from the developer register in the cases in Article 17.
Can a developer spend escrow money on advertising?
Only up to 5% of the project’s total sales. The rest pays contractors and consultants.
Does escrow law apply to a ready home?
No. It covers off-plan sales. On a resale, payment is made on transfer day at a DLD service centre.
Can I see the escrow account transactions?
The law gives depositors, or their representatives, access to their own accounting records and copies. Progress and the account number are in Dubai REST.
What happens to my money if the project is cancelled?
It is refunded from the escrow account within 14 days and, if that falls short, the developer has 60 days to pay the rest.
Does Dubai escrow law protect me if I buy from abroad?
Yes, just as it protects a resident. Always pay in dirhams into the escrow account on your payment letter and keep every receipt.
