Law No. (8) of 2007
Concerning Escrow Accounts for Real
Property Development in the Emirate of Dubai
We, Mohammed bin Rashid Al Maktoum, Ruler of Dubai,
After perusal of:
Federal Law No. (5) of 1985 Issuing the Civil Code and its amendments;
Law No. (7) of 2006 Concerning Real Property Registration in the Emirate of Dubai; and
Regulation No. (3) of 2006 Determining Areas for Ownership by Non-UAE Nationals of
Real Property in the Emirate of Dubai,
Do hereby issue this Law.

Chapter One
Definitions and General Provisions

Article (1)
This Law shall be cited as “Law No. (8) of 2007 Concerning Escrow Accounts for Real
Property Development in the Emirate of Dubai”.

Definitions

Article (2)
The following words and expressions shall have the meaning indicated opposite each of
them unless the context implies otherwise:
Emirate : The Emirate of Dubai.
DLD : The Land Department.
Chairman : The chairman of the DLD.
Director General : The director general of the DLD.
Register : The register maintained by the DLD for registering Developers.
Escrow Account : A bank account of a Real Property Development project in
which the payments made by the purchasers of Units sold off
plan or by the financers of the project are deposited.
Developer : Any natural or legal person who is licensed to engage in the
purchase and sale of Real Property for Real Property
Development purposes. This includes master developers and
sub-developers.
Escrow Agent : A financial or banking institution certified by the DLD to
manage an Escrow Account.
Competent Entity : Any of the Government entities in charge of licensing
Developers.
Real Property Development: Projects for the construction of multi-storey buildings or
compounds for residential or commercial purposes.
Real Property : Anything which is fixed and cannot be moved without
damage or alteration of its structure.
Unit : A designated part of Real Property that a Developer sells to
others.

Article (3)
This Law shall apply to Developers who sell Units off-plan in Real Property Development
projects in the Emirate and receive payments from purchasers or financers in return for
the same.

Article (4)
The DLD shall maintain a register known as the “Real Property Developers Register”
in which the names of Developers licensed to conduct the Real Property Development
activity in the Emirate shall be recorded. No Developer may conduct the activity unless he
is recorded in that register and licensed by the Competent Entities in accordance with the
relevant requirements prescribed by them.

Article (5)
A Developer may not advertise in local or international media, or participate in local or
international exhibitions, to promote the sale of Units or Real Property off-plan unless he
obtains a written permit from the DLD. The Director General shall issue the resolutions
required for regulating advertisements in the media and participation in exhibitions.

Chapter Two
Opening Escrow Accounts

Article (6)
A Developer who wishes to sell Units off-plan must submit to the DLD a request to open
an Escrow Account. The request must be accompanied by:
1. the certificate of membership in the Dubai Chamber of Commerce and Industry;
2. the commercial licence;
3. the title deed of the land to be developed;
4. a copy of the contract concluded between the master developer and the sub-
developer;
5. the initial architectural designs and engineering plans approved by the Competent
Entities and the master developer;
6. a financial statement of the estimated cost and revenues of the project, which is
approved by a certified auditor;
7. an undertaking by the sub-developer to commence the construction works of
the project upon obtaining the master developer’s approval of off-plan sale, or an
undertaking by the master developer in case of no sub-developers; and
8. a sale contract template between the Developer and purchaser.

Article (7)
An Escrow Account shall be opened pursuant to a written agreement between the
Developer and the Escrow Agent whereby the payments made by off-plan Units purchasers,
or by the financers of the project, shall be deposited in a special account with the Escrow
Agent in the name of the Real Property Development project.
The agreement shall prescribe the account management terms and the rights and
obligations of contracting parties. A copy of this agreement shall be deposited with the
DLD.

Article (8)
The DLD may create an entry on the registry folio of the land owned by the master developer
to denote that a sale agreement is concluded between the master developer and the sub-
developer in respect of this land or any part thereof. A purchaser of an off-plan Unit may
apply to the DLD to create an entry on the registry folio of the land on which the project
is to be constructed to denote that a sale agreement is concluded between that purchaser
and the sub-developer.

Chapter Three
Management of Escrow Accounts

Article (9)
1. An Escrow Account shall be opened in the name of each Real Property project, and shall
be exclusively dedicated for the purpose of implementing that project. No attachment
may be imposed on the amounts deposited in this account in favour of the creditors of
the Developer.
2. In the event of multiple projects implemented by the Developer, each project must
have a separate Escrow Account.

Article (10)
1. The DLD shall maintain a special register known as the “Escrow Agents Register” in
which the names of Escrow Agents are recorded.
2. An Escrow Agent must be competent to manage Escrow Accounts.

Article (11)
1. An Escrow Agent must provide the DLD with periodic statements of the revenues and
expenditures of the Escrow Account. The DLD may, at any time, request the Escrow
Agent to provide any information or data it requires. In all events, the DLD may, as it
deems appropriate, seek assistance from any person to audit these statements and
data.
2. If it is proven to the satisfaction of the DLD that an Escrow Agent has committed any
violation of this Law or its implementing bylaws, the DLD must notify the Escrow
Agent in writing and grant him a time limit to remedy that violation.

Article (12)
Depositors, or their representatives, may have access to their accounting records and
request copies of these records. Representatives of official authorities may also have
access to, and obtain copies of, these records.

Article (13)
Where a Developer mortgages a project in order to obtain a loan from a finance institution
or company, this institution or company must deposit the loan amount in the relevant
Escrow Account to be managed in accordance with the provisions of this Law.

Article (14)
An Escrow Agent must retain five percent (5%) of the total value of the Escrow Account
after the Developer obtains the completion certificate. The retained amount shall be
released to the Developer only upon the lapse of one (1) year from the registration of Units
in the names of purchasers.

Article (15)
In case of any emergency resulting in non-completion of a Real Property project, the
Escrow Agent of that project must, upon consultation with the DLD, take the necessary
measures to preserve the rights of depositors by ensuring the completion of the Real
Property project and refund of the payments made by the depositors.

Chapter Four
Penalties

Article (16)
Without prejudice to any penalties stipulated in any other legislation, an imprisonment
sentence and a fine of not less than one hundred thousand Dirhams (AED 100,000.00), or
either penalty, shall be inflicted on:
1. any person who conducts the Real Property Development activity in the Emirate
without a licence;
2. any person who submits to the Competent Entities false documents or information in
order to obtain a licence to conduct the Real Property Development activity;
3. any person who knowingly offers for sale Units in fraudulent Real Property projects;
4. any person who embezzles, steals, or misappropriates any payments made to him for
the purpose of implementing a Real Property project;
5. any auditor who deliberately issues a false report on the financial position of a
Developer, or deliberately refrains from disclosing essential facts in his report;
6. a consultant who knowingly certifies false documents related to a Real Property
project; or
7. a Developer who deals with a broker who is not registered on the Real Property Brokers
Register maintained by the DLD in accordance with Bylaw No. (85) of 2006 Concerning
the Real Property Brokers Register in the Emirate of Dubai.

Article (17)
A Developer shall be struck-off the Register if:
1. he is declared bankrupt;
2. he fails, without a valid reason, to commence construction works within six (6)
months from the date on which he is granted the approval to sell Units off-plan;
3. the licence granted to him by the relevant licensing authority is revoked;
4. he commits any of the violations stipulated in sub-paragraphs (16)(2), (16)(3), (16)
(4), and (16)(5) of this Law; or
5. he violates any of the laws and bylaws regulating the Real Property Development
activity in the Emirate.

Chapter Five
Final Provisions

Article (18)
All Developers existing by the effective date of this Law must comply with its provisions
within six (6) months from the date on which it is published in the Official Gazette. The
DLD may extend this grace period as it deems appropriate.

Article (19)
The DLD may charge fees for any of the services provided under this Law.

Article (20)
Any provision in any other law or bylaw shall be repealed to the extent that it contradicts
the provisions of this Law.

Article (21)
The Chairman shall issue the resolutions required for the implementation of this Law.

Article (22)
This Law shall be published in the Official Gazette and shall come into force on the day on
which it is published.

Mohammed bin Rashid Al Maktoum
Ruler of Dubai
Issued in Dubai on 6 May 2007
Corresponding to 19 Rabi al-Thani 1428 A.H