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Off-plan
Off-plan property in Dubai: what escrow protects, and what it does not
Off-plan sales in Dubai are closely regulated: a mandatory escrow account, withdrawals tied to construction progress, registration on an interim register. This protects your money against misuse. It says nothing about timing or about the quality delivered.
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Law No. 8 of 2007: one escrow account per project
- Law No. 8, requiring an escrow account for each project
- 2007
- The DLD’s interim register for off-plan sales
- Oqood
- Registration fee, due as soon as the sale is recorded
- 4%
The short answer
Three checks do most of the work: the project is registered with RERA, your money goes into the project’s escrow account and nowhere else, and the sale is registered with Oqood at signing. The rest depends on the wording of the contract, not on the brochure.
The choice between off-plan and resale is set out in our guide to investing in Dubai. How an off-plan sale works comes down to three points: what you sign, when you pay, and what protects your money until handover.
The safeguard
The escrow account: what it covers and what it leaves out
Since Law No. 8 of 2007 on escrow accounts for real estate development, a developer selling off-plan in Dubai must open an escrow account for each project with an approved bank. Buyers’ payments are held there, the developer can withdraw them only as certified construction progresses, and part of the balance is retained after handover to cover remedial work.
The mechanism solves a specific problem, and it solves it well: your money cannot fund another of the developer’s projects, or its running costs. It does not, however, cover delay, which remains a contractual matter, or a gap in specification between what you were shown and what is delivered. A project can comply fully with the escrow rules and still be handed over eighteen months late.
When to stop
An intermediary who asks you to transfer a deposit anywhere other than the project’s escrow account is proposing a transaction outside the legal framework. There is no good reason for it, and nothing to negotiate.
The register
Oqood, or why a contract is not enough
In Dubai, an off-plan sale is not entered in the land register straight away: the title deed exists only once the building is delivered. Between signing and handover, the sale is recorded on an interim register kept by the Dubai Land Department, known as Oqood.
That registration makes your right enforceable. Until it is done, you hold a claim against a developer, not an identified right over a unit. The Dubai Land Department’s 4% registration fee is paid at that point, not at handover. We ask for the certificate and keep it on file.
The financing
Construction-linked or post-handover payment plan
Both formulas coexist, often in the same tower, with neither the same price nor the same risk profile.
| Criterion | Construction-linked | Post-handover |
|---|---|---|
| What triggers each payment | Construction milestones certified by an approved consultant | Calendar dates, after handover |
| Cash outlay before handover | All or nearly all of the price | Often only 50% to 70% |
| Advertised price | The lower of the two | Higher: the developer finances the difference |
| Effect of a construction delay | Payments move with the build | The schedule starts later |
| Selling before handover | Possible once a set percentage is paid, with the NOC | More restricted: a balance is still owed |
| Main risk | A fast build that brings payments closer together | A commitment that runs on after you move in |
| Bank financing | Rarely available before handover | Possible against the title deed, once delivered |
Scroll the table sideways to see every column.
A construction-linked plan ties each payment to a certified milestone: you pay for what has been built. Its drawback lies in the good scenario: a fast build brings the payments closer together, and a buyer who had planned on three years may have to pay within twenty months.
A post-handover plan defers part of the price until after you receive the keys. It is credit granted by the developer, and it is built into the price: between two identical units, the difference in the advertised price is the cost of that financing. You can project both, payment by payment, in the off-plan payment plan simulator; the projects we follow are listed under projects.
Project your payment plan, payment by payment
Choose the formula, enter the price and the announced handover date: the simulator sets out each payment on its own line, up to the handover of the keys.
The contract
What the contract must say, in black and white
- The contractual handover date and any grace period, separate from the estimated date in the brochure.
- What happens if the project is late: what is owed, from when, and what gives you a right to exit.
- The area tolerance and the specification schedule in an annex, with brands and product ranges.
- The project’s escrow account number, and the obligation to pay into that account only.
- The conditions for selling before handover: minimum percentage paid, cost of the no-objection certificate, processing time.
- The defects warranty, distinguishing snagging on finishes from structural defects, which carry a much longer warranty.
- What is due at handover: connection fees, deposits, the first year of service charges. A real sum, rarely mentioned at reservation.
The method
What we check before you reserve in a project
We check that the project is registered with RERA
A project on sale carries a project number, and the Dubai Land Department’s official app shows its status and declared progress. A project missing from that register is not one to reserve.
We ask for the project’s escrow account number
Each project has its own account, tied to that project alone. A request to pay into one of the developer’s operating accounts is a signal to stop immediately.
We read the contractual handover date, not the advertised one
The brochure gives an estimated date; the contract gives a binding date, sometimes with a grace period. Only the second one helps you if the project is late.
We check the area tolerance and the specifications
The permitted difference between the area sold and the area delivered must be stated as a figure, and the fittings listed by brand in an annex. Without that, “or equivalent” allows almost anything.
We look at the developer’s delivery record
How many projects delivered, how late and in what condition. Visiting a building handed over three years ago tells you more than a scale model.
We have the sale registered with Oqood at signing
Registration on the interim register is what makes your right enforceable against third parties. It happens at the sale, not at handover, and you receive a certificate.
Frequently asked questions
What off-plan buyers ask
What exactly does the escrow account guarantee?
Law No. 8 of 2007 requires the developer to open an escrow account for each project, into which buyers’ payments are placed, with withdrawals tied to certified construction progress. It protects your money against misuse, not against delay or against a finish below what you imagined.
What is Oqood, and what happens if it is missing?
It is the registration of an off-plan sale on the interim register kept by the Dubai Land Department, before the title deed exists. Without it, you hold a contract against a developer, not an enforceable right over a specific unit. It is the first document to ask for after signing.
What can I do if the developer delivers late?
It depends on your contract and on the length of the delay. A delay of a few months is common and rarely compensated. A significant delay may, depending on the clauses, give you a right to terminate, handled by the Dubai Land Department. Everything turns on the wording of the handover clause, which you read before you sign.
Can I sell before handover?
Yes, subject to two conditions: the developer issues a no-objection certificate (NOC), for which it charges a fee, and you have paid a minimum percentage of the price, often between 30% and 40%. The transfer is then recorded on the interim register in the new buyer’s name.
Is a post-handover payment plan a good deal?
It is credit granted by the developer, and you pay for it in the price. It makes sense if the property starts earning rent while you are still paying. It makes less sense if you compare instalments without comparing prices: the gap between two neighbouring projects is often the cost of that financing.
How do I check a developer properly?
Four checks: the project is registered with RERA and has a project number; a dedicated escrow account actually receives your money; the developer has already delivered buildings you can go and see; and its track record on delays is known and acceptable. A well-known brand does not exempt it from any of the four.
What costs are added to the price on an off-plan purchase?
The Dubai Land Department’s 4% registration fee is due as soon as the sale is recorded on the interim register, together with the Oqood administrative fees. When a developer pays it for you, that is a commercial discount, not an exemption. At handover you add connection fees, deposits and the first service-charge demand.
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