Escrow, RERA and Oqood: how buyers are protected in Dubai

Dubai’s buyer protections are stronger than most overseas investors assume, and worth understanding precisely rather than in the abstract. Here is the chain your money actually passes through. This is general information, not legal advice.

1 · Who regulates the market

The Dubai Land Department is the government body that registers property and oversees the sector. RERA (the Real Estate Regulatory Agency) is its regulatory arm: it licenses developers and brokers, regulates the escrow accounts that hold off-plan money, and runs the rental index. Every protection below flows from these two.

2 · What you can actually own

Under Law No. 7 of 2006, freehold ownership across Dubai is reserved for UAE and GCC nationals. Non-GCC foreign buyers can still own (freehold, or a lease of up to 99 years) but only in the areas the Ruler has designated (set out under Regulation No. 3 of 2006). Most of the communities investors ask about (Dubai Marina, Downtown, Palm Jumeirah, Business Bay) are designated freehold.

You do not need residency to buy; you need a valid passport. Because the designated-areas list is updated administratively, confirm a specific community’s status before you commit.

3 · Where your money sits

This is the mechanism that matters most off-plan. Under Law No. 8 of 2007, a developer must deposit off-plan payments into a project-specific escrow account held by a RERA-approved bank. The funds are ring-fenced to that project, released to the developer only against verified construction progress, and protected from the developer’s other creditors. The escrow agent holds back a portion (commonly cited as 5%) until around a year after the units are registered to buyers.

In plain terms: your staged payments are tied to the building actually going up, not handed over for the developer to spend as it likes.

Escrow protects how your money is used. It does not protect you from a bad decision.

4 · The register that stops double-selling

A second layer records who owns what. Under Law No. 13 of 2008, every off-plan sale must be entered in the DLD’s interim property register, the Oqood system. An off-plan sale that is not registered there is void. This logs your contractual right to the finished unit and blocks the same unit being sold twice. Importantly, it is a right to future ownership, not yet a freehold title.

5 · From interim right to title deed

On completion, the unit moves from the interim register to the permanent property register, and the DLD issues a title deed, your proof of ownership. Registration carries the DLD transfer fee of 4% of the price (legally split 2% / 2% between buyer and seller, though in practice the buyer usually pays it), plus smaller administrative fees for the title deed and the trustee office. The fee applies to ready and off-plan alike. Treat the exact figures as administratively set, and verify them at the time.

6 · What these protections do not do

The mechanisms are strong, but know their edges. Escrow protects how your money is used; it does not guarantee a return, or that a project finishes on time. Stalled and cancelled projects do occur, which is why Laws No. 19 and No. 33 of 2020 gave the authorities and a judicial committee powers over cancelled projects. Oqood protects your record of ownership, not the quality of what you bought. And none of it replaces diligence on the developer and the area.

The practical takeaway: before you transfer a dirham, confirm the developer and project are RERA-registered, and that you are paying into the project’s escrow account, not a private one.

Frequently asked questions