Escrow accounts in Dubai: how your payments are protected

When a purchase is made off-plan, the buyer pays money before the property exists. In Dubai, a legal mechanism governs these payments: the escrow account.

The principle

Every project under construction must have a dedicated escrow account, opened with an approved bank. Buyers' payments are deposited there, not into the developer's current account. Funds are only released as construction progresses, after verification by an independent consultant, under the supervision of the Dubai Land Department.

What this protects

• Amounts paid are allocated to the project, not to the developer's other activities.
• Release is tied to the actual progress of works, which limits the risk of funds being spent without construction taking place.
• In the event of default or the project being halted, remaining funds in the account are protected and can be used to compensate buyers, under the applicable regulations.

What this does not guarantee

The escrow account does not guarantee the handover date or the absence of any dispute. It does not replace analysis of the developer, their track record and the quality of the project. The exact terms of reimbursement in the event of cancellation depend on the contract and the applicable law.

Good habits to adopt

• Check the name of the bank and the project's escrow account number in the contract.
• Never pay into a different account, even at an intermediary's request.
• Keep receipts and payment notices.
• Make sure the project is properly registered with the Dubai Land Department.

What about the secondary market?

An already-built property is bought through a trustee office, which receives the funds, checks the documents and carries out the transfer of ownership at the time of payment, providing comparable security for the buyer.

To review your project and check the conditions currently in force, book an appointment with Arzouni Properties.