Does a Dubai developer have to take my payments into escrow?

Yes. According to DLD, the escrow law applies to every developer in Dubai that sells units off-plan and receives payments from buyers or project financiers. All of those payments go into the project's escrow account.

Where can I see a project's escrow account?

In the Dubai REST app: Services → Project Status (Mashrooi), then search for the project by name. The project record has an escrow account section, and DLD states that the app shows escrow account numbers.

Can the developer spend escrow money on anything it likes?

No. Payments go mainly to contractors, consultants and project marketing, and marketing is capped at 5% of total sales. Money is released milestone by milestone, after the trustee bank's engineer has checked the site.

What happens to my money if the project is cancelled?

According to DLD, the account passes to the project liquidation department, which requires the developer to repay investors within 60 days of the cancellation decision. RERA can extend that period, and if the developer still doesn't pay, the case goes to court.

Dubai Escrow Accounts: How They Work and How to Check Yours

When you buy off-plan in Dubai, your instalments go into a bank account that belongs to the project, and the developer can only draw on it in stages as construction actually moves forward. For a buyer, that is the main safeguard in the whole system. Below I explain how escrow works under DLD rules and how to check your own project's account in about five minutes.

What a project escrow account is

DLD describes it as the bank account of a specific project. Money from off-plan buyers and from the project's financiers is paid into it (DLD, FAQ ↗).

The legal basis is Law No. 8 of 2007 on escrow accounts for real estate development in Dubai. DLD says it came into force on 28 June 2007 and covers projects announced both before and after it was published.

From DLD's FAQ:

the law applies to every developer in Dubai that sells off-plan and receives payments from buyers or financiers;
the account is opened in the project's name, and the money in it can only be used to build that project;
the developer's creditors cannot have the funds seized;
buyer payments must be deposited into escrow, including anything collected before the account was opened;
if the project is mortgaged, the loan amount also has to be paid into the escrow account.

Who runs the account

A trustee bank, known as the account trustee. Under DLD's FAQ, this can be a bank or financial institution operating in Dubai, licensed by the UAE Central Bank to accept third-party deposits and approved by RERA. The trustee signs a written agreement with RERA.

The account can only be opened once RERA has approved the project. These days the system does that automatically as soon as approval comes through.

DLD keeps the current list of approved banks on its Approved escrow account trustees ↗ page.

What the developer can spend it on

The list is narrow. Under DLD rules, escrow payments go to contractors, consultants and marketing for the project, and plenty of other developer costs are not eligible at all. Marketing spend is capped at 5% of total sales.

How money leaves the account

The developer's project manager tells the trustee that a milestone has been completed and asks for payment to the service providers.
The trustee's engineer goes to the site to confirm the construction stage really is done.
After that, and only after that, the trustee releases the money.

The 5% retention

By law, 5% of everything paid into the account stays there for a year after completion. That money is held so defects get fixed promptly, both the ones visible at completion and anything that shows up in the first year after handover.

If a project stalls or is cancelled

DLD covers several situations in its FAQ ↗.

The project is cancelled. The account moves to the project liquidation department. The department requires the developer to repay investors within 60 days of the decision, and RERA can extend that if there are grounds. If the developer doesn't comply, the matter goes to court.
Cancellation is under way. There are several steps: a grievance, a review, then a committee for incomplete projects. DLD says this takes at least three months.
The project hasn't been cancelled, but you want your money back. In that case you have to go to court. DLD does not terminate contracts between developers and buyers; it helps the two sides reach a settlement.
Completion is at or below 5%. RERA checks progress from time to time. A developer whose project has stalled is given time to put things right, and if it doesn't, cancellation proceedings start.

Once liquidation is complete, the funds are moved to DLD's trust account and paid out to beneficiaries, either in full or proportionally, depending on what is left in the account.

None of this makes off-plan risk-free. Escrow lowers the chance that your money gets spent on something other than construction. Delivery dates and build quality need checking separately.

Checking the escrow account, step by step

It takes me a few minutes each time.

Download Dubai REST from the App Store or Google Play.
Tap Services at the bottom of the screen, then Project Status (Mashrooi) (DLD guide ↗).
Search for the project by name and open its record.
Scroll through the project details, status, developer details and escrow account details.
The arrow next to the percentage on the building image opens the inspection details.

According to DLD, Dubai REST shows completion percentages, actual photos of the project, escrow account numbers and the payments owners owe on projects they've bought into (DLD, Dubai REST ↗).

DLD's Project Status Enquiry page ↗ lists what a project record contains: project number, area, number of units, registration, start and completion dates, remarks, developer and management company details, and the name of the escrow bank.

What to match

The bank and account number in Dubai REST are the same as in your SPA and on the payment request.
That bank appears on DLD's approved trustee list.
The project named on the bank details is the one you see in Dubai REST.
The money is going to the project escrow account, and not to a personal account or some "partner" company.

If anything doesn't line up, stop and hold the payment until it's sorted out. Raise it with the developer in writing, and message me straight away.

From my practice. A non-resident family with no UAE bank account wanted to wire money straight to the seller before transfer. I talked them out of it, and the funds went through a conveyancing company, which issued manager's cheques to the seller. That was a resale deal with no escrow involved. The logic carries over, though: pay only through an official route you can verify, even when sending it "directly" looks quicker.

Paying the developer properly

Escrow protects only the money that actually lands in it. Getting the payment there is on you.

Use bank details from the developer's official documents only, meaning the SPA and the payment request. If details arrive by messenger, check them against Dubai REST first.
Pay from your own account, and put the project and unit number from your contract in the payment reference.
Keep the paper trail: transfer confirmation, receipt and the developer's acknowledgement.
Keep an eye on the balance. DLD says Dubai REST shows owners what is due on their projects, so if the app and your own records disagree, ask the developer for a statement of account.
Cash and payments through an "intermediary" are out, even if someone offers a discount for paying quickly.

Mistakes I see most often

Money sent to a developer's "partner" company when it should have gone to the project escrow account.
Bank details copied from an old invoice after the developer had already announced new ones.
A payment reference with no unit number, so matching the payment takes ages.
Paying before checking whether the construction stage has actually been reached.

Stage payments and your right to check

Off-plan payment schedules are often tied to construction stages. DLD's FAQ ↗ is clear on this. When you receive a payment request, you are entitled to know the current completion percentage through a letter from the DLD-approved project consultant. Until it is confirmed that the project has reached the stage in the agreed schedule, the investor is not obliged to pay.

If you need a formal report, you can get a completion report from RERA's technical auditor. The fee is AED 15,000 per unit or villa.

I explain how to read completion figures and inspections in how to check construction progress.

Escrow and off-plan mortgages

If you're financing an off-plan purchase, the Central Bank requires the lender to pay your own equity portion to the developer first, before any of the loan money goes out. Payments then follow completion milestones that the bank or an independent qualified professional has physically confirmed (CBUAE ↗). LTV on off-plan is capped at 50%.

Off-plan buyer checklist

You can find the project in Dubai REST under Project Status (Mashrooi).
The escrow bank is on DLD's approved trustee list.
The bank details in your SPA match Dubai REST.
The completion figure fits the stage you're being asked to pay for.
The project record and inspection details were updated recently.
The payment goes to the project escrow account and nowhere else.

There's a fuller developer checklist in how to check a Dubai developer. Projects I've looked into myself are in the off-plan catalogue.

Want me to look at your project?

Send me the project name and the bank details from your contract on WhatsApp. I'll check them against Dubai REST and tell you what to look at before you pay. If you're buying off-plan from a developer, my help costs you nothing.