Escrow and Oqood: What Protects Your Off-Plan Money
Buyers from markets with deposit insurance or completion guarantees often assume Dubai's escrow works the same way. It does not. Escrow in Dubai is a control on how the developer spends your money, not a guarantee that you get it back or that the building is finished. Understanding that difference is the point of this article.
Escrow: a spending control, not a guarantee
Dubai Law No. 8 of 2007 requires every registered off-plan project to have a dedicated escrow account at an approved bank. Buyers pay into that account, and the bank releases funds to the developer against certified construction progress. The developer cannot move your money to another project or to its general account.
What that gives you: if the project is cancelled by RERA, the money still on the account is returned to buyers through a supervised liquidation, and the developer is obliged to refund all payments. What it does not give you: protection against delay, against a developer who builds to the minimum, or against a market that falls while you wait. Escrow also does not hold money "for you" — it is the project's account, and releases go to the developer as construction advances.
Oqood: your name on the unit
Oqood is the provisional registration of the sale in the Dubai Land Department's interim register. It records the unit, the buyer, the price and the payment plan. Until the building is complete and a title deed is issued, the Oqood entry is your evidence of ownership rights, and it is what allows you to resell before handover.
The DLD's 4% fee is paid at Oqood registration and not charged again on handover, when the entry converts into a title deed. There is a separate small processing fee; we confirm the amount at the transaction date.
The five checks that make the protection real
The protection exists only if you pay correctly. Before the first dirham:
- The project is registered with the DLD and has a project number and an escrow account.
- The escrow account is named in the SPA, with the bank and account number.
- Your payment goes to that account. Not to the developer's corporate account, not to a broker, not to a "group company".
- The developer is registered with RERA and licensed to sell this project.
- Oqood is issued in your name within a reasonable time after signing, and you receive the registration confirmation.
How international buyers lose the protection
- Reservation fees to the broker. Paid by card or cash "to hold the unit" before any contract. Outside escrow, often unrecoverable.
- Payments via a "payment agent". Some marketing chains ask overseas buyers to pay a local intermediary who "forwards" to escrow. If the money never arrives, the developer has no record of you.
- Buying from a reseller without re-registration. You pay the previous buyer; the Oqood stays in their name. Until the DLD transfers it, you own nothing.
- Unreferenced transfers. International wires with no unit number or buyer name in the reference can sit unallocated for weeks.
- Escrow "waivers" for early phases. No legitimate project sells before registration. A promise that "escrow opens next month" is a request to pay unprotected.
What to keep
Oqood confirmation with the unit number, the SPA and schedules, and every receipt showing the escrow account and reference. You will need them for a resale, for a dispute, for a Golden Visa application based on the property, and for the conversion to title deed at handover.
If Oqood is not registered
Write to the developer asking for the registration date and reference. Check the DLD's services to see whether the unit is recorded in your name. If nothing happens, complain to RERA through the DLD's channels. An unregistered sale is one the developer, in theory, could make again to someone else.
Frequently asked questions
Is my deposit insured?
No. There is no deposit insurance scheme. Escrow limits misuse of funds; it does not insure them.
Can I pay into escrow from a foreign bank?
Yes. Use the exact account details from the SPA and put the project, unit number and your name in the payment reference.
Does escrow protect me if the developer goes bankrupt?
It keeps the project's funds separate from the developer's own estate, which is the point. What you recover depends on how much is on the account and the liquidation outcome.
The developer asks me to pay the 4% DLD fee to its own account. Normal?
The fee is paid to the DLD and the DLD issues the receipt. Ask for the DLD receipt before paying anything to the developer "on behalf of" the department.
This is a general framework, not legal advice. UAE law changes, and procedures differ between emirates and free zones. We review each situation individually.