When buying property in Dubai, especially off-plan developments, one of the most important protections for buyers is the use of an escrow account. Escrow accounts are a legal requirement for developers in Dubai and are designed to ensure that buyer funds are safe and only used for the intended project.

An escrow account is a special bank account where the money paid by property buyers is deposited during the construction phase of an off-plan project. Instead of going directly to the developer, these funds are held securely by an escrow account manager who is registered with the Dubai Land Department (DLD). The developer can only access the money in stages, and only after meeting specific construction milestones.

Escrow accounts give buyers confidence that their payments are being handled transparently. They prevent developers from misusing funds for purposes other than building the project. This system also protects buyers in case of delays or if a project is cancelled, as the unused funds can be returned according to Dubai’s real estate regulations.

When you purchase an off-plan property, your payments are deposited into the project’s dedicated escrow account. The Dubai Land Department monitors these accounts closely, ensuring that withdrawals by the developer match the actual progress of construction. This means that if a developer wants to access funds, they must provide proof that a certain stage of the project has been completed.

Escrow accounts add a layer of security to the buying process. They make sure your money is protected until your property is completed and handed over. This gives international and first-time buyers peace of mind, knowing that Dubai’s regulatory system is designed to protect their investment.

Escrow accounts are a key feature of Dubai’s property market, especially for off-plan purchases. By ensuring that buyer payments are safeguarded and used only for the approved project, they create transparency, reduce risk, and build trust between buyers and developers. Understanding how escrow accounts work is essential for anyone considering buying an off-plan property in Dubai

As a property buyer, you do not open the escrow account yourself. Escrow accounts in Dubai are created and managed by developers who are selling off-plan properties. Every project must have its own dedicated escrow account that is registered and approved by the Dubai Land Department (DLD).

The Process for Buyers

1. When you agree to buy an off-plan property, your payments do not go directly to the developer.

2. Instead, you make payments into the project’s official escrow account.

3. This account is managed by an approved escrow account manager, usually a recognized bank in Dubai.

4. The developer can only withdraw funds from the escrow account once certain construction milestones are certified by engineers and approved by the DLD.

The Process for Developers

1. A developer must be registered with the DLD and RERA (Real Estate Regulatory Agency).

2. To launch a project, the developer applies to the DLD for approval and is assigned a project-specific escrow account.

3. All buyer payments for that project must go into this account.

Escrow accounts are designed to protect buyers by keeping control in the hands of regulated authorities and banks, not individual developers or buyers. For you as the buyer, your responsibility is to make sure:

• The project is registered with the Dubai Land Department.

• The escrow account details you are given match the official records.

• Payments are made only to the designated account, not to a private developer account.