Escrow, Madhmoun and Buyer Protections on Abu Dhabi Off-Plan

Off-plan accounted for roughly 89% of Abu Dhabi's residential sales value in the first half of 2026. So the most important question for many buyers isn't which project to choose, but how my money is protected while the building goes up.

Abu Dhabi has a clear framework for this, and it was strengthened in 2026. This guide explains the main protections in plain language. It draws on the official ADREC announcement on Madhmoun and on Trowers & Hamlins' April 2026 analysis of four new administrative decisions.

The legal basis

Abu Dhabi's property sector is governed by Law No. 3 of 2015 on the regulation of the real estate sector, as amended by Law No. 2 of 2025. In early 2026, the Department of Municipalities and Transport (DMT) issued four administrative decisions putting key parts of that law into practice. We cover each one below.

1. Project escrow: your payments are ring-fenced

The Real Estate Law requires developers to keep a project-specific escrow account, and buyer payments are deposited into it. Developers are not allowed to draw from it until at least 20% of construction is complete.

The 2026 change: early release backed by a bank guarantee (Decision 24/2025)

ADREC can now approve withdrawals before the 20% milestone, but only under strict conditions:

• A bank guarantee: the developer must provide an unconditional, irrevocable bank guarantee worth at least 20% of the total construction cost.
• Approved costs: every withdrawal must be supported by approved cost estimates.
• Track record: only developers registered in Abu Dhabi for at least four years, with at least three projects delivered on time and a clean regulatory record over the previous 12 months, are eligible.
• Ongoing cover: the guarantee must be kept topped up. It's released only when the project is complete, or earlier if the developer shows at least 60% progress and enough money in escrow to finish.

What it means for you: if your developer uses early release, your deposits are backed by enforceable security. You can ask whether the project has used this mechanism.

2. Madhmoun: EOIs are now regulated

The riskiest moment used to be before a project officially launched, when buyers paid an expression of interest (EOI) to secure a place in the queue.

Since 17 February 2026, all developers of new projects must register buyers' off-plan EOIs digitally through Madhmoun, ADREC's platform. EOI funds go into a government-managed preparatory escrow account, and refunds are handled digitally. ADREC says this removes the risks that came with intermediaries holding the money. The first project to use it was Manchester City Yas Residences by Ohana.

What it means for you: if someone asks for an EOI on a new Abu Dhabi project, it should go through Madhmoun. Don't pay EOI money any other way.

3. If you have to cancel: compensation and refund rules (Decision 165/2025)

This decision sets out what happens when an off-plan buyer defaults and the developer cancels and resells the unit:

• Project not started: if the project hasn't started for reasons outside the developer's control, the buyer gets a full refund.
• Graduated retention: as construction advances, the developer can keep a graduated portion of the price, typically from 10% in early stages up to 40% once the project is 60–100% complete.
• Larger payments: where the buyer has paid 60% or more, ADREC can decide the retention case by case.
• Refund timing: refunds, after permitted deductions, must be processed within 15 working days.
• Money held outside escrow: any amount collected outside escrow in breach of the law must be refunded within 30 days of the cancellation notice, before the developer receives any escrow funds.

What it means for you: before you commit, be realistic about whether you can keep up with the payment plan. Defaulting late in construction can be expensive.

4. After handover: service charges and building management (Decision 25/2025)

The protections continue after you get the keys:

• Disclosures: developers must make disclosures for off-plan sales and remain liable for materially inaccurate or incomplete pre-sale disclosures for two years after transfer.
• Service charges: charges are strictly controlled, and unapproved fees are prohibited. Annual service charges must be payable monthly or quarterly, not demanded as a single lump sum.
• Arrears follow the unit: unpaid service charges stay attached to the unit even when ownership changes. That's another reason to check for arrears when you buy resale.
• Management companies: they must be ADREC-accredited and appointed within 30 days of the first unit being handed over.

5. Owners' committees (Decision 26/2025)

Once at least 30% of units in a development are registered to multiple owners, an owners' committee of five to nine resident owners must be formed.

• Who can join: developers are excluded, even if they still own unsold units.
• Voting: members are elected electronically, one owner one vote, and ADREC approves them.
• Its role: the committee reviews budgets, monitors the management company, and can ask DMT to compel a change of management company if there is evidence of negligence.

Buyer checklist

1. Make sure any EOI goes through Madhmoun.
2. Pay instalments only into the project escrow account named in your sale agreement.
3. Keep copies of all pre-sale disclosures, including the brochure, plans and specification.
4. Read the cancellation clauses with Decision 165/2025 in mind.
5. Ask for the expected service charges and the payment schedule after handover.
6. Check the project is in an investment zone open to your nationality. ADREC lists 50 such zones.

Strong rules don't remove every risk, because delays and market changes still happen. They do mean Abu Dhabi off-plan buyers have much clearer protection than many people assume.