Your money is protected: escrow explained

What an escrow account is

Escrow is a special bank account that sits in the middle between you and the developer. Every dirham you pay for an off-plan home goes into this account, not into the developer's own pocket.

Think of it as a safe that needs the government's permission to open. The developer built the project, but they cannot just reach in and take your money whenever they want.

The law behind it

This is not a promise or a favour. It is the law. Abu Dhabi Law No. 2 of 2025 (which updated the earlier Law No. 3 of 2015 and came into force on 2 August 2025) requires every off-plan project to run a protected escrow account, supervised by ADREC, the Abu Dhabi Real Estate Centre.

The three big protections

1. The developer can't touch the money early.

The developer cannot draw your money out until at least 20% of the construction is actually built. No shortcuts. If they want any money before that point, they first have to hand the bank a guarantee worth at least 20% of the construction cost, under a separate rule (Administrative Decision No. 24 of 2025). Either way, your money is covered.

2. The money can only pay for building your home.

Escrow money can only be spent on the actual construction and finishing of the project. By law it cannot be used to buy the land or pay broker commissions. Your instalments go toward building the thing you paid for, nothing else.

3. Money is released only as work gets done.

The developer draws funds in stages, and only after real construction progress is proven. If the building isn't going up, the money isn't coming out. Your payments are tied to actual bricks and concrete, not empty promises.

What if the deal falls apart

If a project is cancelled, the law says buyers must be refunded from escrow within 15 working days. And if a developer ever collected money outside the escrow account in breach of the rules, that money has to be returned within 30 days. The system is built so your money can find its way back to you.

The simple version

Your money sits in a locked account. The developer only gets it, bit by bit, as they actually build. They can never spend it on land or commissions. And if things go wrong, the law puts you first in line to be paid back.