How escrow accounts work for Dubai off-plan developers

The purpose of escrow

Escrow protects off-plan buyers by ring-fencing their money for the project they bought into. It also gives developers a clear, regulated route to fund construction from sales.

Opening the account

The developer applies to an approved trustee bank once the project is ready to be registered. The bank reviews the developer, the project and its documents. Escrow opening is often on the critical path to launch, so start early.

How money moves

1. In: buyer instalments are paid into the escrow account and allocated to units.
2. Out: the developer submits release requests for construction and permitted costs, supported by the consultant’s progress certification.
3. Held back: a retention (typically 5%) is kept after completion before final release.

Reconciliation is where problems start

Escrow balances should match what the receivables ledger and Oqood say each buyer has paid. When they drift apart, release requests stall and audits become painful. Monthly reconciliation keeps the three in step.

Common pitfalls

• Buyers paying into the wrong account, which then needs correcting.
• Release requests submitted without matching progress evidence.
• Unallocated payments that cannot be tied to a unit.

Fifth Consultancy handles escrow and TAS management for developers and has processed more than AED 750 million in trust account payments.