An escrow account is mandatory for every off-plan project in Dubai. It is the mechanism that protects buyers' money while giving developers access to funds as construction progresses.
Understanding how escrow works and structuring it correctly is essential to a smooth launch and healthy project cash flow.
What is a project escrow account?
A project escrow account is a dedicated trust account held with a RERA-approved trustee bank and operated through the Trust Account System (TAS). All buyer payments for an off-plan project must flow into this account.
Funds are not freely available to the developer. They are released against verified construction progress, ensuring buyers' money is used to build the project they purchased into.
How drawdowns work
As construction reaches verified milestones, the developer can request drawdowns from the escrow account. The trustee bank releases funds in line with the approved payment plan and construction progress.
This is why the escrow structure must match the payment plan from the outset a mismatch creates drawdown problems that can choke project cash flow.
Why escrow protects everyone
- Buyers know their payments are ring-fenced and tied to construction
- Developers gain credibility and investor confidence
- Regulators have transparency over project finances
- Disputes are reduced because fund flow is documented and rule-bound
Getting escrow right
Selecting the right trustee bank, structuring the account to your payment plan, and managing drawdowns and reporting are ongoing responsibilities, not a one-time setup. Developers who treat escrow as a living compliance obligation avoid the problems that stall less-prepared projects.
Frequently asked questions
No. Funds are released against verified construction progress in line with the approved payment plan, through the trustee bank. This protects buyers and ensures money is used to build the project.
