Dubai's off-plan framework is one of the most buyer-protective in the region — but only if the buyer understands how it works. The same broad principles apply in Abu Dhabi (DMT/ADREC) with local variations.
The escrow account
Under Law No. 8 of 2007 every off-plan project in Dubai must operate a project-specific escrow account at an approved bank. Buyer payments flow into the escrow account, not the developer's general treasury. Funds are released only against verified construction milestones certified by an independent engineer.
RERA's intervention powers
If a project stalls, the Real Estate Regulatory Agency (RERA) — a regulatory arm of DLD — can:
- Audit the project and the escrow account
- Order the developer to remedy delays within a set period
- Appoint a replacement contractor funded from the escrow account
- Transfer the project to another approved developer
- Cancel the project under Decree No. 21 of 2013, refunding buyers from remaining escrow funds and developer guarantees
The Special Tribunal for the Settlement of Real Estate Disputes (the "Cancelled Projects Tribunal") handles wind-down and refund disputes.
What buyers typically recover
In cancelled projects, recoveries depend on how much was in escrow at the point of cancellation:
- If escrow holds the bulk of buyer payments and the developer's bank guarantee is intact, refunds approach 100% of paid amounts.
- If construction had drawn down significant escrow funds, recoveries are partial and the Tribunal allocates pro-rata across buyers.
Mortgaged off-plan units
Mortgage buyers should pay particular attention. The bank disbursed funds to the escrow, but the borrower remains liable on the loan. In cancellation scenarios the bank typically receives refund proceeds first, with any surplus passed to the buyer.
Practical buyer protections
- Only buy from developers with a strong escrow track record — the top six developers in Abu Dhabi and the top tier in Dubai (Emaar, Damac, Sobha, Nakheel, Meraas, Dubai Holding, Ellington, Select Group) have decades of escrow-completed projects.
- Check Oqood registration immediately after signing the SPA — without it you have no DLD-registered interest.
- Verify the escrow account number matches DLD's project record.
- Avoid material payments outside the escrow flow — any request to wire funds direct to the developer is a red flag.
For pre-purchase due diligence, speak with our advisory team.