How does it work?
For an off-plan purchase, the buyer pays instalments in accordance with the sale and purchase agreement (SPA). In a regulated project, the relevant payments are deposited into the project’s designated escrow account and administered under the applicable emirate’s rules. The account is intended to keep project funds separate and ensure they are used for the permitted development purposes.
Why should buyers care?
Escrow arrangements improve transparency and provide controls over how project money is handled. In Dubai, the Dubai Land Department explains that project escrow accounts receive amounts paid by purchasers for off-plan units and are intended to regulate development and protect investors. Abu Dhabi has its own legal and regulatory framework, so buyers should check the project’s registration and escrow arrangements with the relevant authority.
What should I check before paying?
Ask for the project’s registered name and number, the escrow account details, the account trustee, the payment instructions and confirmation that the beneficiary and unit references match your SPA. Do not transfer instalments to a personal account or an unrelated beneficiary. Independently verify payment instructions with the developer using a trusted contact channel.
Does escrow guarantee delivery?
No. Escrow is a financial control, not a promise of completion by a particular date. Delays, disputes, cancellation procedures and buyer remedies depend on the governing law, project status, contract and facts. Keep receipts, payment schedules, correspondence and copies of all notices.
A note for UAE buyers
Rules differ between Abu Dhabi, Dubai and other emirates. Do not assume a Dubai procedure applies to an Abu Dhabi project. Before taking action over a delayed or cancelled project, obtain advice from the relevant real estate regulator or a qualified UAE lawyer.