Off-Plan Property in Dubai: 7 Risks, Escrow and Oqood

The short answer

In Dubai your off-plan payments do not go to the developer. By law they go into an escrow account in the project’s name that may only be spent on building that project, and the developer’s creditors cannot touch it.¹ Your purchase is registered with the Land Department through Oqood.⁵ What the law does not remove are delays, the risk of missing your own payments, resale limits and service charges. Those are the seven risks below.

Why this matters more this autumn

Off-plan homes made up 72% of all residential purchases in Dubai in Q3 2026 and 65% of the value, according to Cavendish Maxwell. At the same time the total value of sales fell 47% year on year.¹¹ The large developers are selling more slowly but sit on big order books: Emaar reported AED 34.7 billion in group sales for the first nine months of 2026 and a backlog of AED 158.8 billion, and describes its launch pace as measured.¹² Aldar’s group sales fell 34% to AED 18.9 billion over the same period.¹³ For buyers that means more choice and better terms, which makes it worth knowing exactly what is protected and what is not. Our Dubai property market update has the wider picture.

72%Off-plan share of Dubai residential purchases in Q3 2026¹¹

90 daysDeadline for the developer to register your purchase in Oqood⁵

5%Held back in escrow after completion, released one year after units are registered to buyers¹

41.3%Share of homes planned for H1 2026 that were actually delivered⁸

Where your money goes: the escrow account

Dubai’s Law No. 8 of 2007 sets the rules for every off-plan project. The developer must be registered with the authority and needs written approval before it may advertise off-plan units.¹ To sell, it must open an escrow account in the name of the project, held by a bank or financial institution accredited by the authority, with one separate account for each project.¹

Ring-fenced money. Payments from buyers may be used exclusively to build that project. The developer’s creditors cannot seize them.¹
A back stop if the project stalls. If a project is not completed, the escrow agent works with the authority to have it finished or to refund the buyers.¹
A retention after completion. Once the completion certificate is issued, 5% of the account stays in escrow and is only released to the developer one year after the units are registered in the buyers’ names.¹ That money is there for defects that show up after handover.
Real penalties. Misusing project money can lead to prison and fines of at least AED 100,000. A developer can also be struck off the register if construction does not start within six months of approval without good reason.¹

Escrow protects where your money goes. It does not guarantee that a building is finished on time, and it does not protect a payment you made outside the account.

Oqood: your registration before the title deed

Oqood is the Land Department’s register for off-plan sales. The developer files your purchase through the Oqood system, and it must do so within 90 days of signing the contract. You then receive an electronic certificate by email.⁵ Until the finished unit receives a title deed, this certificate is your official record of ownership.

The registration fee is 4% of the price. The Land Department’s own fee schedule splits it into 2% for the seller and 2% for the buyer, plus small service fees.⁵ In practice developers usually pass the full 4% on to the buyer, which is why fee waivers are such a common launch incentive.⁶ Check in your contract who pays which part. Our guide to off-plan payment plans shows what a waiver really saves.

New in 2026: one platform for registration and escrow

On 3 September 2026 the Land Department launched Initial Registration, an AI supported platform on which developers handle project registration, the registration of sales and their escrow accounts in one place.⁷ Part of it is Project 360, a full view of each project with the status of units, escrow accounts and financial data, plus early warning indicators.⁷ It is a tool for developers and the regulator, not a buyer portal, but it means the authority sees problems in a project’s finances earlier than before.

The 7 real risks, and what protects you

1. The handover is late

Delays are the most common problem, and they are normal rather than rare. Of all homes scheduled for completion in Dubai in the first half of 2026, only 41.3% were actually delivered, which Cavendish Maxwell calls broadly in line with historical trends.⁸ There is no fixed legal compensation for a late handover. What applies is your Sales and Purchase Agreement, which usually includes a grace period, and beyond that a claim under civil law.²⁰ What helps: read the completion date and grace period clause, and do not plan a move or a tenancy around the first date in the brochure.

2. The project is cancelled

This is the scenario most buyers fear, and the one where the law is clearest. Since a 2020 amendment, if the regulator cancels a project, or it was never built for reasons outside the developer’s control, the developer must refund the full amount paid.⁴ Decree No. 33 of 2020 created a special tribunal for the liquidation of cancelled projects. Its decisions are final and it can instruct the escrow trustees directly.⁴ What helps: make sure every payment went into the project’s escrow account, because that is the money the tribunal can reach.

3. You cannot pay an instalment

The law also protects the developer. If you miss a payment, the developer reports it to the Land Department, which gives you 30 days to pay. If you still do not, the developer may cancel the contract and keep part of what you paid, depending on how far the building has progressed:²³

Construction progress	What the developer may do
Started, below 60%	Cancel and keep up to 25% of the purchase price
60% to 80%	Cancel and keep up to 40% of the purchase price
80% or more	Keep the amount paid and claim the rest, or apply for a sale of the unit

Anything above the retained amount must be refunded within one year, or within 60 days of the unit being resold, whichever comes first.² What helps: budget for the largest instalment, usually the one at handover, before you sign. On a 30/70 plan that can be 70% of the price on a single date.

4. The finished unit is not what you bought

Off-plan means buying from plans and renders. Sizes, layouts, finishes and views can change during construction, and most contracts allow a tolerance on the final area. What helps: keep the floor plan and specification sheet that are attached to your contract, check the clause on area variation and what happens if it is exceeded, and book an independent snagging inspection before you accept the keys.

5. You cannot sell when you want to

There is no legal minimum in Dubai for reselling before handover. The rule is set by each developer: most only allow a resale once a set share of the price has been paid, often 30 to 40%, and require a no objection certificate before the transfer can be registered.¹⁸ What helps: if you might want to sell before completion, find the resale clause and the developer’s fee for the certificate before you reserve.

6. Service charges come in higher than expected

Service charges start at handover and are paid every year for the life of the building. In Dubai the approved rates are published in the RERA Service Charge Index and managed through the Mollak system.¹⁷ For a new project the final figure is only known after handover, when the budget for the building is submitted and approved. What helps: ask the developer for its estimate per square foot, compare it with completed buildings by the same developer in the index, and include it in your yearly budget.

7. Many similar homes are finished at the same time

Dubai is heading into its largest wave of completions since 2008. Cushman & Wakefield Core expects about 55,600 homes in 2026 and more than 60,000 in 2027.⁹ On paper the 2027 pipeline is far larger: Cavendish Maxwell counts about 162,500 planned units, although planned and delivered are not the same thing.⁸ Of about 525,000 units planned until 2030, only some 186,000 had passed 20% construction progress.⁹ If your building is handed over in a month when many similar units in the same area are, resale prices and rents can be under pressure for a while. What helps: look at what else completes nearby around your handover date, and favour areas where supply stays limited. Our article on whether Dubai property will crash looks at what the forecasts say.

Abu Dhabi and Sharjah compared

Abu Dhabi regulates off-plan sales under Law No. 3 of 2015, amended by Law No. 2 of 2025. Developers may only draw on escrow funds once construction has reached 20%. Decision No. 24 of 2025 allows earlier access only against an unconditional bank guarantee covering at least 20% of the construction cost, and only for developers with at least four years of registration and three projects delivered on time.¹⁴¹⁵ According to BSA, the decision has applied since 28 February 2026.¹⁵ Under Decision No. 165 of 2025, buyers of projects that were never built receive a full refund, and the amount a developer may keep after a buyer defaults is graded by completion.¹⁴ That framework applies to projects such as Aldar’s Talay on Saadiyat Island.

Sharjah presented its first escrow framework for real estate projects at the opening of ACRES 2026 on 21 January 2026: buyer payments go into bank accounts and are released according to construction progress.¹⁶ The detailed rules are less widely published than Dubai’s, so for a Sharjah project such as Linar in Al Mamzar ask the developer for the escrow account and the registration under Sharjah’s rules in writing before your first payment.

What sources disagree on

Defaults above 80% completion: the text of the law says the developer keeps the amount paid and may claim the rest or apply for a sale.² A 2020 article on Chambers describes a 40% retention for this stage instead.¹⁹ We follow the legislation.
Homes delivered in H1 2026: Cavendish Maxwell counts 24,800 units.⁸ Cushman & Wakefield reported more than 20,400 for roughly the same period.¹⁰ The firms count differently, so always quote the source with the number.
Who pays the 4% fee: the Land Department’s fee schedule splits it 2% and 2% between seller and buyer.⁵ Most off-plan contracts put the full 4% on the buyer.⁶ Your contract decides.
Oqood admin fees: broker and developer sites quote anything from AED 40 to several thousand dirhams. We have not printed a figure. Ask the developer for the exact amount in writing.

Before your first payment: a checklist

Check the developer and the project against the Land Department’s records, for example in the Dubai REST app.
Match the escrow account. The account number in your contract must belong to this project.
Pay only into that escrow account, never in cash, to an agent or to a personal or company account.
Get your Oqood certificate within 90 days of signing, and follow up if it does not arrive.
Read four clauses line by line: completion date and grace period, missed payments, area variation, and resale before handover.
Plan your cash for the largest instalment, the 4% fee and the first year of service charges.

Before you reserve, our advisors can check the registration, the escrow details and the contract terms with the developer for projects such as Talay to The Wilds and Linar. Message us on WhatsApp or get in touch.

Frequently asked questions

Is buying off-plan property in Dubai safe?

Dubai has one of the strongest legal frameworks for off-plan buyers in the region. Under Law No. 8 of 2007, buyer payments must go into an escrow account in the project's name that may only be used to build that project. The main risks that remain are delays, your own ability to pay on time, resale limits and service charges, so check the contract and the project registration before you pay.

What is Oqood in Dubai?

Oqood is the Dubai Land Department's register for off-plan sales. The developer must register your purchase within 90 days of signing the contract, and you receive an electronic certificate. It is your official proof of ownership until the finished unit receives a title deed.

What happens if an off-plan project in Dubai is cancelled?

If the regulator cancels a project, or it was never built for reasons outside the developer's control, the law requires the developer to refund the full amount paid. Disputes over cancelled projects go to a special tribunal set up by Decree No. 33 of 2020.

Can a developer keep my money if I stop paying?

Only within legal limits. The developer must report the default to the Land Department, which gives you 30 days to pay. If you still do not pay, the developer may keep up to 25% of the price if construction has started but is below 60%, and up to 40% between 60% and 80% completion. Above 80% the developer may keep the amount paid and claim the rest or apply for a sale of the unit.

Can I sell an off-plan property before handover in Dubai?

Usually yes, but the developer decides when. Most developers require a set share of the price to be paid, often 30 to 40%, and issue a no objection certificate before the sale can be registered. The threshold is in your Sales and Purchase Agreement, not in the law.

How do I check if an off-plan project is registered?

Ask the developer for the project number and escrow account details and check them against the Dubai Land Department's records, for example in the Dubai REST app. Pay only into the escrow account named in your contract, never to an agent or a personal account.

Sources

Figures are taken from the sources above as of the date shown. This article is general market information, not investment advice. STOREYS does not provide financing advice.

Off-Plan Property in Dubai: 7 Risks and How Escrow and Oqood Protect You (2026 Guide)