What escrow actually protects you from, and what it doesn't
Escrow is real, statutory and genuinely protective. It also covers far less than most buyers assume.
Dubai introduced escrow for off-plan property in 2007, and it works. Buyer funds go into a supervised account tied to a specific project. Money is released to the developer against certified construction milestones. The developer cannot take your payment for tower A and spend it finishing tower B.
This is a serious protection and it is why Dubai off-plan carries far less counterparty risk than most emerging markets. It is also routinely oversold, and understanding its edges matters more than celebrating its existence.
What escrow does cover
Misappropriation of buyer funds between projects. Developers disappearing with deposits. Construction funded by nothing but the next round of buyers. These were real problems and escrow substantially solved them.
What escrow does not cover
It does not guarantee your project completes. A developer can go insolvent with the escrow account intact and partially drawn; you become a creditor in a process, not a person with a finished apartment.
It does not guarantee timing. Milestones certify that work happened, not that it happened on schedule. Delay is compatible with a perfectly functioning escrow account.
It does not guarantee quality. Escrow releases against progress, not against workmanship. A certified milestone and a well-built floor are not the same claim.
It says nothing about value. Escrow is indifferent to whether you overpaid, whether the area is oversupplied, or whether anyone will buy the unit from you later. It is a fund-protection mechanism, not an investment-quality mechanism.
The honest summary
Escrow removes the risk of being defrauded. It does not remove the risk of being wrong. Almost all of the money that Indian buyers lose in Dubai is lost to the second category, and no amount of regulatory protection addresses it. That is what advisory is for.
A note on India
RERA requires seventy per cent of buyer funds for a registered project to sit in a designated project account. The principle is similar; the enforcement is less mature and the coverage more variable. Where no equivalent mechanism exists at all, the substitute is negotiating a payment schedule that tracks construction progress, so your exposure grows only as the building does.