---
title: "The escrow account and your commission: what is actually linked"
description: "What Dubai's off-plan escrow law actually means for agents, when and how developer commission is paid, and why split agreements must be signed before the client pays."
category: "off-plan-developers"
readingTime: 12
---
## The phone call every off-plan agent dreads

The client has just transferred the booking deposit. The SPA is days away from being signed. You have spent three weekends showing the project, driven two hours each way to the sales centre twice, and stayed up late sending floorplan comparisons and payment-plan breakdowns. Then your phone rings. It is the co-agent from the other agency — the one who technically introduced the client eight months ago at a property exhibition — telling you the commission is theirs, all of it, and they have the developer's ear.

Or maybe it goes the other way. The developer's sales team releases commission in two tranches, and your agency got the first one. The co-agent who brought the buyer is now asking when their share arrives, and you do not have a signed split agreement to point to because both sides assumed the arrangement was obvious.

These conversations are not rare. They are the recurring friction of Dubai's off-plan market, and they almost always begin with a misunderstanding about what the escrow account is, what it does for agents, and how commission actually moves through an off-plan transaction.

## What the escrow account is — and what it is not

Start here, because the confusion around this word is significant.

Developers are required to open a project-specific escrow account with a RERA-approved bank, and all buyer payments must be deposited into this account — not into the developer's general operating accounts. The developer may only access those funds after achieving specific, RERA-approved construction milestones. Developers draw escrow funds only against construction progress certified by an independent engineer; the escrow agent releases funds only after receiving the engineer's completion certificate for that stage plus RERA approval.

The legal basis for this is straightforward. Law No. 8 of 2007 established mandatory project-specific escrow accounts for all off-plan developments in Dubai. RERA oversees the registration of developers and projects, approves trustee banks, and monitors inflows and outflows from each escrow account against construction progress.

Here is what this means for you as an agent: **the escrow account is a buyer-protection mechanism, not a commission-holding mechanism.** It governs the relationship between the buyer's payments and the developer's right to use those funds for construction. Your commission is not held inside it. Your commission does not flow out of it. The two things — the escrow account and your commission — operate on completely separate rails.

This matters because agents often speak loosely about escrow in the context of getting paid, and that loose language breeds false assumptions. When an agent says "the money is in escrow," they usually mean one of two things: either the buyer's funds have been lodged in the developer's DLD-registered project account, or the 10% deposit in a secondary resale transaction is being held by a conveyancer or the developer pending transfer. Neither of those situations is the same as your commission being protected or guaranteed.

When a project is mortgaged to raise finance, the mortgage proceeds must also be paid into the escrow account, so that all construction funding is subject to the same controls. This structure means the account buyers pay into is not a general corporate account but a monitored pool reserved for the project they have purchased.

Your commission, by contrast, is a separate commercial obligation the developer owes to your brokerage, governed by the terms of your agency agreement — not by the escrow law. Understanding that distinction changes how you think about protecting what you earn.

## How developer commission actually reaches an agent

Buyers do not pay commission on off-plan properties in Dubai — developers usually pay the brokerage directly to market and sell the project. Developers pay commissions for primary off-plan property sales, meaning buyers in that segment often pay zero commission.

The mechanics of that payment vary considerably by developer. Some developers pay the agency soon after booking. Others release commission only after the buyer clears a set payment milestone. Most developers release 50% of the commission after the buyer's first payment clears and the remaining 50% after the second or third installment.

These are developer-set policies. They are written into the agency or broker appointment agreements — the documents that govern your right to sell a particular project. There is no standard across the market. What one developer pays at booking, another holds until post-completion. Read those terms before you dedicate your team's time to a project launch.

The RERA framework for off-plan transactions requires that the formal structure be documented. RERA does not fix a commission rate, but it regulates how brokerage agreements must be structured. For off-plan deals, Form A is signed between the developer and the broker; Form B may apply if the buyer has a broker representation; the commission is disclosed and is paid by the developer; no additional fee should be requested from the buyer.

Every transaction involving a RERA-licensed broker must reference the broker BRN number. Agents without a valid BRN cannot legally receive commission. That is non-negotiable. An agent operating without a current BRN has no standing to claim fees regardless of how much work they did on the deal.

What the system does not do — and this is the gap where most disputes live — is say anything precise about how commission should be split between two brokerages when one listed the project and the other brought the buyer.

## The co-broke reality: where the split lives and where it does not

Dubai's off-plan market runs substantially on collaboration between agencies. In Dubai's highly competitive real estate market, agent-to-agent collaboration is not only common — it is essential. Whether you are working with another broker to close a sale or share a rental lead, knowing how to properly negotiate your commission split is key to building trust, protecting earnings, and creating long-term arrangements.

The developer pays one party: the registered selling broker, whichever brokerage has the active appointment. That brokerage receives the full commission and then — in theory — pays the co-agent's agency their agreed portion. When two brokers collaborate on a deal, the commission structure must be agreed upon in advance. Without a clear agent-to-agent agreement, commonly known as Form I, many agents end up in costly disputes or losing their commission entirely.

In Dubai, there is no official law dictating the exact split for agent-to-agent commissions, but the following are commonly accepted standards: sale transactions usually involve a 50/50 split of the total commission; rental transactions are usually 50/50 but sometimes negotiable depending on the effort involved; exclusive listings sometimes see the listing agent offer a smaller split such as 60/40 if they hold exclusive rights.

None of these percentages carry the force of regulation. They are market norms, not law. Which means the only thing that protects your share is your own signed agreement with the other brokerage — agreed before the buyer pays, before the SPA is signed, and before the developer's commission clock starts running.

### Why the split agreement must precede the client's payment

Here is where timing becomes everything.

Once the buyer signs the SPA and the booking deposit clears, the deal is done. The developer begins processing the commission to the registered broker. The pace and structure of that payment are set by the developer's own policy and your agency agreement. At that point, if there is no documented split between your brokerage and the co-broker, you are in a negotiation with someone who already has the cash — or who is waiting for it — and no written obligation to share.

The other brokerage is not necessarily acting badly. They may genuinely believe their share is larger. They may have a different recollection of who did the work. They may be in a dispute themselves about which of their agents gets credit. The absence of documentation does not mean anyone is dishonest. It means the situation is inherently unstable, and it will stay unstable until someone agrees to take less than they expected.

Negotiating verbally is not enough. You should always secure the commission split with a written agreement — typically using Form I.

Form I is the RERA-prescribed agent-to-agent agreement form. It sets out the parties, the property, the agreed percentages, and the conditions. Get it signed. Get it signed before you introduce your client. If the deal moves fast and introductions happen before paperwork, you have a narrow window — get Form I signed before the SPA is executed. Once the SPA is signed and funds move, the window is effectively closed.

## The timing problem — and why it compounds in off-plan

In a secondary market sale, the commission timing is relatively clear. The key milestones are: MOU signing (Form F), when most agents consider commission earned; this is the standard expectation and is supported by RERA in disputes. Title transfer at DLD is when some agents agree to collect, but this is the exception. If a deal falls through after the MOU is signed, the agent may still claim their commission.

Off-plan is more complicated. The SPA replaces the MOU as the binding document, but the commission does not always land at SPA signing. As already noted, many developers stagger payment in line with the buyer's installment schedule. A project with a 40/60 payment plan — 40% during construction, 60% at handover — may see the second tranche of your commission held for years.

This creates a specific tension in co-broke arrangements. Agency A is the registered broker. Agency B brought the buyer. Agency A receives the first commission tranche from the developer when the buyer's initial installments clear. Does Agency B get their share of that tranche immediately, or do they wait for the full commission to arrive before the split is calculated? This is exactly the kind of detail that needs to be written down before any money moves.

If your Form I does not address staged payments — if it only says "50/50 on commission" without specifying when and in what sequence — you will have this conversation again when the second tranche lands. Or you will not have it at all, because the first agency will consider the matter closed after their own internal accounting is done.

Write the split agreement to mirror the developer's payment schedule. If the developer pays in two tranches, the split agreement should specify how each tranche is divided and when the receiving agency pays the other. Vagueness is not neutral — it always favours the party who receives the money first.

## What happens when there is no written split

The consequences of an undocumented split are not abstract.

If a commission dispute arises, RERA's Rental Disputes Settlement Centre handles the case. Having a written agreement is essential to win any dispute. Without a signed split agreement, an agent presenting a commission claim to the RDSC is relying on WhatsApp messages, email threads, and testimony. That is not necessarily hopeless — courts and tribunals evaluate evidence, not just paper — but it is dramatically harder than pointing to a signed document that says exactly what was agreed.

Commission disputes are fact-specific — who introduced whom, what was signed, what was paid. That specificity is a sword when you have documentation and a liability when you do not.

Having proper documentation of your agency agreement and any communications makes your case much stronger. For significant disputes involving substantial sums, you may need to pursue resolution through Dubai Courts or the DIFC Courts if your agreement specified that jurisdiction.

The regulatory framework can help, but only to a point. RERA provides formal channels for resolving commission disputes with registered agents. However, RERA's channels are not a substitute for a contract. They are a place to take your contract when the other party refuses to honour it. Bring nothing and you are asking a regulator to reconstruct an agreement that was never made.

There is also a practical reputational cost that no regulator addresses. An agent who pursues a commission dispute through formal channels against a co-broker ends a working relationship. Dubai's broker community is not as large as it looks. The agencies that collaborate cleanly, pay fast, and never create ambiguity around splits get more referrals than those who do not. This is not sentiment — it is market logic.

## The VAT layer and why it belongs in the split agreement

Agent commission carries 5% VAT, per RERA licensing requirements. This is not a minor detail in a split agreement.

If the developer pays the registered agency AED 200,000 in commission plus 5% VAT, the agency issues a tax invoice for AED 210,000. When that agency pays the co-broker their 50% share, is that share AED 100,000 or AED 105,000? Who accounts for the VAT on the payment to the co-broker? Which entity issues the tax invoice?

Each RERA-licensed brokerage is its own VAT-registered entity. A payment from one licensed brokerage to another in connection with a shared deal is a taxable supply. Both parties need to know, before the money flows, who is invoicing whom, at what amount, and on what basis. Getting this wrong does not just create an accounting headache; it can create a liability with the UAE's Federal Tax Authority.

Commission rates must always be stated in the official RERA forms and invoices issued by licensed agencies. Aligning the RERA form with the tax invoice is the responsible approach. If the Form I says 50/50, the invoices should reflect that math, inclusive of the VAT treatment both parties have agreed.

## Oqood registration and what it does not do for your commission

When the buyer's SPA is registered with the DLD through the Oqood system, the buyer receives an interim title certificate confirming their registered ownership interest. The SPA is registered in the DLD interim register via Oqood, giving the buyer an interim title. The developer registers the signed SPA in the DLD provisional register through the Oqood portal, and the DLD requires this registration within 90 days of signing. Oqood records the buyer's interest, the price, the payment plan, and projected handover date, and is the buyer's registered evidence of an enforceable claim until the title deed is issued.

This registration protects the buyer. It does not protect the agent. Your name, your agency's name, the split arrangement, and the agreed commission figure do not appear in the Oqood record. If the developer stops paying mid-project, or goes into dispute, the Oqood registration tells you what the buyer owns — it tells you nothing definitive about what you are owed.

Funds can only be released based on verified construction progress, and developers cannot use funds for other projects. If a project is cancelled, buyers receive refunds from the escrow account. Agents, in that scenario, are unsecured creditors of the developer — their claim for unpaid commission lives outside the escrow structure entirely.

This is an important risk to understand on high-volume launch days. When a developer sells 400 units at a weekend launch and agent invoices pile up, the developer's obligation to those agents is a commercial one, not a DLD-secured one. The escrow account protects buyers. Agent commission is an operational cost that the developer owes from their general cash flow or from the portions of escrow released at construction milestones.

Knowing that, the quality of your developer appointment agreement matters enormously. It should specify when commission is triggered (booking? SPA? first installment clearing?), when it is paid (within how many days of the trigger?), what happens if the buyer cancels at different stages, and what rights the agency has to pursue unpaid tranches. A poorly drafted appointment letter is not supplemented by the escrow structure — there is no backstop.

## Project cancellation: what agents need to know

Under Article 14 of Law No. 8 of 2007, once a completion certificate is issued for a project, the escrow agent must retain 5% of the total value of the escrow account. This retained amount is released to the developer only one year after units are registered in the purchasers' names, functioning as a warranty fund for post-handover defects and issues.

If a project is cancelled before handover, the situation for buyers is regulated. The escrow agent, in consultation with the DLD, takes the measures needed to preserve buyers' rights, including refunds from the remaining account balance. The Special Tribunal for Unfinished and Cancelled Real Property Projects has exclusive jurisdiction to settle disputes, order completion or transfer to a new developer, or oversee liquidation and refunds.

Again, note what is missing from that framework: the agent. Commission already paid to a brokerage before cancellation is generally not clawed back — the agent rendered the service, the transaction occurred, and the commission was a cost incurred by the developer. But commission not yet paid at the point of cancellation — the second or third tranche that was tied to future milestones — is an unsecured claim against a project that has failed. Recovery is difficult and uncertain.

The practical implication: when working with a new developer or an unfamiliar project, stage your reliance on future commission tranches. Do not structure your agency's cash flow around milestone-dependent payments from a developer whose delivery history you have not verified. The escrow account protects the buyer's principal; it does not protect your earnings pipeline.

## The principle that removes the friction

Most of the disputes described in this article — the co-broke argument, the missing split documentation, the VAT ambiguity, the tranche timing disagreement — have the same root cause: parties entered a commercial arrangement without reducing its terms to writing before the client paid.

That is the inflection point. Once the buyer's money is in motion — once the booking deposit is paid, the SPA is signed, the Oqood certificate is issued — the situation is fixed. The developer is processing to whoever they have on file. The commission is moving toward one entity. Everyone else's claim is a conversation that has to happen after the fact, without leverage, often under time pressure, sometimes under legal fees.

The opposite of that is not complicated. It is an agreement — specific, signed, counter-signed, covering the split percentage, the payment sequence, the VAT treatment, and what happens if the buyer cancels — that exists before the client makes any payment at all. When every party knows exactly what they will receive, when they will receive it, and what document proves it, the deal closes cleanly. The commission lands where it was supposed to land. The relationship between the brokerages survives.

Only RERA-licensed brokers and agents can legally earn commission in Dubai; using an unlicensed individual puts the transaction at risk. RERA expects all commission arrangements to be documented in Form A or Form B. The same principle applies to agent-to-agent arrangements: documentation is not a formality, it is the thing itself.

The market has enough deal flow to make every agent busy. The agents who get paid consistently, and who avoid the RDSC waiting room, are not the ones who close the most deals. They are the ones who agree the terms in writing before the money moves — every time, on every deal, without exceptions for people they trust. Trust is not a substitute for documentation. In a market where most transactions involve agencies that have no exclusive mandate over each other, documentation is the only thing that makes trust operational.

The escrow account protects the buyer. A signed agreement protects you.