Dubai off-plan: how escrow accounts and Oqood protect buyers

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Kooky

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Buying a home that has not been built yet means paying for a promise. In Dubai, that promise is framed by two laws of the emirate, both written for exactly this situation. The first, Law No. (8) of 2007, decides where the money goes: into a bank account that belongs to the project and to nothing else. The second, Law No. (13) of 2008, decides when the purchase exists in law: once it is entered in a register the Dubai Land Department keeps for homes that are still off-plan.

This guide goes through both, article by article where it matters, as they read on the Dubai Legislation Portal and in the legislation compilation published by the Rental Disputes Centre. It covers what a developer must do before selling, what happens to each payment, what the interim register records, what follows completion, and what the rules provide when a project stops. It also says plainly where the text that could be read is not the latest one. That is the case for the rule on buyers who stop paying, which has been amended more than once.

Law No. (8) of 2007 of the Emirate of Dubai, Articles 14, 17 and 16, as published on the Dubai Legislation Portal.

Two laws, two different jobs

The two laws are often mentioned in one breath, yet they protect different things. One follows the money. The other follows the title.

Law No. (8) of 2007 on escrow accounts for real estate development was issued in Dubai on 6 May 2007. Its Article 3 says whom it binds: developers who sell units off-plan and receive payments from buyers or from financiers. Law No. (13) of 2008, which regulates the Interim Property Register, was issued on 14 August 2008. It governs the recording of off-plan sales and of anything else done with an off-plan unit before the building is finished.

A third text completes the pair. Executive Council Resolution No. (6) of 2010 is the implementing by-law of the 2008 law. It was issued on 14 February 2010 and runs to 28 articles in the Rental Disputes Centre's compilation. Most of the practical detail sits there: handover, area differences, the cancellation of a project and the refund timetable.

The words carry precise meanings. Article 2 of the 2007 law defines the escrow account as the bank account of a real estate development project, into which the payments of off-plan purchasers or of the project's financiers are deposited. The escrow agent is a financial or banking institution accredited by the Land Department to manage such an account. A developer is any person licensed to buy and sell real property for development, and the definition covers master developers and sub-developers alike. A unit is any designated part of the property that the developer sells to third parties.

Before a developer may sell

The protection starts before the first buyer signs. Under Article 4 of the 2007 law, the Land Department keeps a Register of Real Estate Developers, and nobody may carry on development without being entered in it and licensed by the competent authorities. Article 5 adds that a developer needs the Department's written authorisation before advertising off-plan sales in the media or showing them at exhibitions.

The 2008 law closes the door on selling too early. Its Article 4 says a master developer or sub-developer may not start a project or sell off-plan before taking possession of the land and obtaining the required approvals. Article 10 goes further: no developer or broker may enter a private off-plan sale contract for a project that has not been approved, and a contract made before approval is null and void. The by-law's Article 4 spells out the preconditions: the developer must hold the plot and its demarcation certificate, have actual control of the plot, and hold the approvals.

The opening of the account itself is a file, not a formality. Article 6 of the 2007 law lists eight documents the developer must supply with the request:

1. A certificate of membership of the Dubai Chamber of Commerce and Industry.
2. The trade licence.
3. The title deed of the land.
4. A copy of the contract between the master developer and the sub-developer.
5. The initial architectural designs and engineering plans, approved by the competent authorities and the master developer.
6. A financial statement of the project's estimated costs and revenues, certified by an accredited auditor.
7. An undertaking to start construction once the master developer approves off-plan sales.
8. The standard sale contract between the developer and the purchaser.

The last item deserves attention. The contract a buyer is later asked to sign is, in principle, a standard document already filed with the Department when the account was opened.

Registering the project in 2026

The Dubai Land Department's "Register Project" service page shows how this works today. The service lets a developer register a project and open an escrow account for off-plan sales. The page lists the conditions. The land must lie in a freehold or long-term lease area. There must be an ownership deed, and the page says preliminary sales certificates are not accepted. The developer's registration in the Department's Trakheesi system must be complete. The units must be uploaded to the survey department with the approved plans. And a 30% guarantee must be provided.

That guarantee can take one of three forms, according to the page: completion of 30% of construction, a bank guarantee covering 30% of construction, or a cash deposit equivalent to 30%.

The page sets out six steps:

1. The developer submits the request in the Department's Oqood portal and uploads the documents.
2. It opens a unit survey request and a technical report request.
3. It asks the account custodian to open the escrow account and enter the account data.
4. The Department receives, audits and reviews the request, then accepts or rejects it.
5. The developer pays the registration fee.
6. It receives the project approval certificate electronically.

Oqood, then, is the name the Department gives to the portal through which a developer's off-plan work passes. The documents required include a consultant's letter with the project details, the final building permits, a bank guarantee, a no-objection certificate from the main developer approving the project name, the off-plan sale and the marketing, and a document the page calls an investor compensation mechanism.

The cost falls on the developer. The page gives a project registration fee of AED 150,000, plus a knowledge fee of AED 10 and an innovation fee of AED 10, which makes AED 150,020. Where the owner of the land is not the developer, the development agreement is registered too, for a fee of 4% of the land value.

Where each payment goes

Article 7 of the 2007 law says the escrow account is opened under a written agreement between the developer and the escrow agent, in the name of the project. The agreement sets out how the account is run and the rights and duties of each side, and a copy goes to the Land Department.

Article 9 is the heart of the law. Each account is dedicated exclusively to the construction of its own project. A developer with several projects must hold a separate account for each one. And the developer's creditors cannot attach the money deposited there. For a buyer, that means an instalment paid for one tower may not be used to finish another, and a developer's difficulties elsewhere do not expose the project account to unrelated debts.

Lenders are held to the same discipline. Under Article 13, when a developer mortgages a project to raise a loan, the lender must deposit the loan into the project's escrow account.

Brokers are covered by the by-law. Its Article 12 says a broker marketing a project must deposit sale proceeds into the project's escrow account, not into the broker's own account, and may not deduct commission first. Any agreement to the contrary is void. An agent's commission on an off-plan sale is therefore a matter between the agent and the developer, settled separately from the buyer's payment. The 2007 law backs this with its Article 16, which makes it an offence for a developer to deal with a broker who is not registered with the Department.

Who watches the account

An account is only as safe as its supervision. Article 10 of the 2007 law has the Land Department keep a Register of Escrow Agents, and requires those agents to be qualified to manage the accounts. Article 11 obliges them to send the Department regular statements of revenue and expenditure. The Department may ask for information at any time and may call in outside auditors. Where a breach is established, it notifies the agent in writing and sets a deadline to put it right.

Buyers have a right of their own. Article 12 lets depositors, or their representatives, consult and copy the account records that concern them.

The penalties are criminal. Article 16 provides for a jail term, a fine of at least AED 100,000, or both, for anyone who develops without a licence, supplies false documents to obtain one, knowingly sells units in fraudulent projects, or steals or misappropriates project funds. The same article reaches the professionals around the project: an auditor who deliberately prepares a false report or hides essential facts, and a consultant who knowingly certifies false project reports.

Article 17 adds an administrative sanction. A developer is struck off the register if it is declared bankrupt, if its licence is revoked, if it commits certain of the Article 16 offences, or if it fails without an acceptable reason to start construction six months after obtaining permission to sell off-plan.

The subject remains live in 2026. The Department's list of rules and circulars carries a circular dated 8 January 2026 titled "Compliance with Law No. (8) of 2007 on Real Estate Development Escrow Accounts", and one dated 19 March 2025 on the marketing of real estate projects. The list gives the titles; the content of those circulars was not read for this guide.

What the interim register records

The 2008 law defines the Interim Property Register as the Department's records, electronic or written, in which off-plan sale contracts and other dispositions of off-plan property are entered before they move to the Property Register. An off-plan sale, in the law's words, is the sale of units that are off-plan or unfinished.

Article 3 states the rule that gives the register its force. Every disposition of an off-plan unit must be entered in it, and a sale or any other act that transfers or restricts ownership, or a right attached to it, is void unless it is entered. The entry is what makes the purchase exist against everyone else.

When the law arrived, developers who had already sold units were given 60 days from its entry into force to apply for registration. The by-law dealt with those who missed the period: the Department would still register the sale, and fine the developer AED 10,000. A developer who filed in time was treated as compliant even if the Department itself was late.

Registration also turns the unit into something its buyer can deal with. Article 6 says units entered in the interim register may be sold, mortgaged or otherwise legally disposed of.

On financing, a separate federal rule applies. The Central Bank of the UAE's mortgage loan regulations cap finance for an off-plan purchase at a loan-to-value ratio of 50%. As a worked example, on an off-plan home priced at AED 2 million, the cap gives a maximum loan of AED 1 million, and the remaining AED 1 million comes from the buyer.

Article 5 of the 2008 law leaves the application itself to the Department's forms and procedures. Article 7 bars master developers and sub-developers from charging fees on sales, resales or other dispositions of units, completed or off-plan, apart from administrative costs the Department approves. The by-law says the same in its Article 8.

Fees that could be confirmed, and one that could not

The Land Department's fees are set by Executive Council Resolution No. (30) of 2013, issued on 18 September 2013. Its schedule gives a fee of 4% of the value of the sale contract for registering a real property sale contract, shared equally by seller and purchaser unless they agree otherwise. The by-law of the interim register, in its Article 9, says developer and buyer pay registration fees in the percentages set by the applicable legislation, again unless they agree otherwise.

The schedule also lists AED 250 per unit for amending an entry in the interim register, and AED 500 for authorising the cancellation of the registration of a unit sale contract.

What the schedule does not contain, in the form in which it could be read, is a separate line for entering an off-plan sale in the interim register, nor a deadline for doing so. The amount a buyer pays at that stage, and when, is therefore not stated here. It depends on the contract and on the Department's current practice.

At completion: registration, area and the 5%

The interim register is temporary by design. Under Article 8 of the 2008 law, once the developer has the completion certificate it must enter the finished project in the Property Register, and register each unit in the name of a purchaser who has met the contractual obligations. If the developer does not, the Department may do it at the purchaser's request or on its own initiative.

The by-law tightens this. Its Article 7 says that after the completion certificate, a developer cannot refuse to hand over or register a unit when the buyer has met the obligations of the contract, even if other sums are said to be owed. Amenities such as car parks must be registered too.

Size is the other recurring question. Article 12 of the 2008 law deems the area of a sold unit correct. The developer cannot charge more if the finished unit turns out larger. If it turns out smaller, the developer must compensate the purchaser, unless the difference is inconsequential. The by-law's Article 13 puts a number on that: the net area governs, and the developer must indemnify the buyer for a shortfall of more than 5% of the net area, calculated on the contract price for the part beyond that threshold.

A worked example shows one way of reading that rule. Assume a contract for 1,000 square feet of net area at AED 2 million, or AED 2,000 per square foot, and a finished unit of 920 square feet. The shortfall is 80 square feet, or 8%. The 5% threshold is 50 square feet, so 30 square feet lie beyond it, and 30 times AED 2,000 gives AED 60,000. The figures are illustrative, and how the calculation is applied to a real contract is a matter for the Department or a court.

Then comes the retention. Article 14 of the 2007 law says that when the developer obtains the completion certificate, the escrow agent keeps back 5% of the total value of the account, and releases it to the developer one year after the units are registered in the buyers' names. The Land Department's frequently asked questions page, read on 10 October 2026, words the same rule more loosely, as a retention for one year after the completion of the project; the text of Article 14 on the Dubai Legislation Portal counts the year from registration. On an account that has received AED 200 million in total, to take an illustrative figure, AED 10 million stays with the agent for that year.

When a project stalls or is cancelled

Article 15 of the 2007 law covers the case every off-plan buyer thinks about. If an emergency leaves a project unfinished, the escrow agent must consult the Land Department and take the steps needed to protect the depositors. The law names the two acceptable outcomes: the project is completed, or the depositors are refunded.

The by-law describes the formal route. Under its Article 23, the Real Estate Regulatory Agency, the Department's regulatory arm, may cancel a project on the basis of a reasoned technical report, in nine listed circumstances. They include a failure to start construction without valid reason, bankruptcy, and a proven lack of intent to carry out the project. Article 22 gives examples of what counts as a developer's negligence, among them unjustified delay in taking the land or obtaining approvals, and a failure to register the project. Article 21 lists circumstances treated as beyond a developer's control, such as expropriation of the site or a suspension for re-planning.

After a cancellation the agency issues a technical report, notifies the developer in writing and appoints a certified auditor at the developer's cost. If the developer does not refund, Article 27 has the agency take the necessary steps, including referral to the judicial authorities.

The by-law also gives the buyer a route to the court. Its Article 20 lists cases in which a purchaser may ask for the contract to be terminated, including a developer's refusal to deliver the final sale agreement, a material change to the specifications, and a handover made unfit by material defects. Article 14 allows the Department to attempt conciliation first; a settlement binds the parties once it is confirmed in writing and approved by the Department.

When the buyer stops paying: read the date on the text

The same framework protects developers against buyers who default, and this is the part of the law that has moved most. It is also the part where an old figure is most often repeated as if it were current.

The Dubai Legislation Portal's page for Law No. (13) of 2008 shows Article 11 in this form: the developer notifies the Department of the breach, the Department gives the purchaser 30 days' notice to perform, and if the purchaser still does not comply the developer may revoke the contract and refund the purchaser after deducting up to 30% of the payments made. The page carries no note of later amendment. That is the 2008 wording.

The Rental Disputes Centre's compilation shows that Law No. (9) of 2009 replaced that article. In the version read there, and in Article 15 of the 2010 by-law, the 30-day notice remains but the single figure gives way to bands tied to how far construction has advanced. With at least 80% of the project complete, the developer could keep the payments and ask for the unit to be auctioned, or terminate and keep up to 40%. With at least 60% complete, it could terminate and keep up to 40%. Below 60%, up to 25%. Where the project had not started for reasons beyond the developer's control, up to 30%. The by-law required the percentage of completion to be confirmed by a technical report from an approved consultant, and any sum due back to the buyer to be returned within one year of termination or 60 days of resale, whichever came first.

That is not the end of the story. The Dubai Legislation Portal publishes two later laws that each replaced Article 11 in full: Law No. (19) of 2017, issued on 18 October 2017, and Law No. (19) of 2020, issued on 24 November 2020. In the 2020 text the developer may act only after the Department's 30-day notice and an official document from the Department stating the project's percentage of completion. Where completion exceeds 80%, the developer may keep the agreement and claim the balance, ask the Department to sell the unit by public auction, or terminate and keep up to 40% of the value of the unit stipulated in the sale agreement. Between 60% and 80%, it may terminate and keep up to 40% of that value. Under 60% with work commenced, up to 25% of that value. The excess is refunded within one year of termination or 60 days of resale, whichever is earlier. And where the project has not commenced for reasons beyond the developer's control, the 2020 text allows no deduction: all payments made by purchasers are refunded under Law No. (8) of 2007.

One thing holds across the versions that were read: the developer cannot act alone, because the notice comes from the Department, with 30 days to respond.

What the texts read here leave open

Besides the buyer's fee for the interim entry, one more gap remains, and it concerns the contract. The 2007 law requires a standard sale contract to be filed when the account is opened, yet no primary page read lists what a Dubai off-plan sale agreement must disclose to the buyer.

One related document is described in the Real Estate Brokerage Practice Guide published by the Department and its regulatory agency in November 2024. It presents Contract F as the sale agreement between seller and buyer, and says disputes about it can go to amicable settlement through the Trakheesi system. The guide read here does not set out the content of that form.

Kooky, from Shaka

Kooky edits Agents Estate and builds Shaka, the payment router he made for real estate professionals. One payment comes in, and every agent, agency and party in the deal receives their signed share on closing date.

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