In Dubai, off-plan payments go into an escrow account in the project's name, managed by an escrow agent accredited by the Land Department (Law No. 8 of 2007, Art. 7).
Advances under the preliminary contract go into a separate account of the developer, dedicated to the project. It is in the developer's name: not an escrow, not a trust.
The developer may spend up to 25% of the price on the structure, then up to 20% on the installations, with the site supervisor's stamp. Your schedule is set by the contract.
Using buyers' advances for anything other than the project is prohibited and fined at 1% of the developer's previous-year turnover, unless it is a crime (Art. 422(11)).
A letter of guarantee is a bank's irrevocable, unconditional promise to pay (Civil Code, Art. 2321). Romanian law does not require one, so it is negotiated.
Payment protection in Romania: the short answer
Romania has no escrow like Dubai's: no bank appointed as escrow agent that holds the buyers' money in the project's name. Protection is built from layers instead. The preliminary contract is signed before a notary and noted in the land register. Advances go into a dedicated project account in the developer's name, with caps on what the developer may spend at each stage. And your contract should tie every payment to a stage you can verify.
Two more layers are not required by law, but you can ask for them: payment through the notary at the final contract, and a bank letter of guarantee.
Put simply: in Dubai, the law holds the money. In Romania, the law limits how it is spent, and the rest is up to your contract.
Dubai, Greece and Romania side by side
| Dubai | Greece | Romania | |
|---|---|---|---|
| Legal basis | Law No. 8 of 2007 on escrow accounts | No statutory escrow for off-plan sales, according to Greek law-firm guides | Art. 422(6)–(11) of Law 169/2026 (ex-Law 207/2025, the "Nordis law") |
| Where the money goes | An escrow account opened with an escrow agent accredited by the Land Department, in the name of the project (Art. 7) | As agreed in the contract | A separate bank account of the developer, dedicated to the project (Art. 422(10)) |
| What it may be used for | Exclusively the construction of that project; a separate account for each project (Art. 9) | As agreed in the contract | Only that project. Spending: up to 25% of the price on the structure, then up to 20% on the installations, with the site supervisor's stamp (Art. 422(10)) |
| Misuse | Jail, a fine of at least AED 100,000, or both, for misappropriating money paid for the project (Art. 16) | As agreed in the contract | A fine of 1% of the developer's previous-year turnover, unless it is a crime (Art. 422(11)) |
| After completion | The escrow agent keeps 5% for one year from registration of the units in the buyers' names (Art. 14) | As agreed in the contract | No statutory retention |
| If the project is not completed | The escrow agent, after consulting the Land Department, acts to have the project completed or the buyers refunded (Art. 15) | As agreed in the contract | No statutory completion or refund mechanism. The developer is responsible for completing the project (Art. 422(6)) |
| The buyer's contract in the register | The buyer may ask the Land Department to update the plot's entry (Art. 8) | Notarial deed and registration | A notarial preliminary contract, which the notary sends for noting in the land register by the next working day (Art. 422(7)–(8)) |
| Bank guarantee | Not required by Law 8/2007 | Can be negotiated, according to the same guides | Not required. Can be negotiated as a letter of guarantee (Civil Code, Art. 2321) |
The Greek column is general and based on practitioners' guides, not on a statute we reviewed. If you are comparing a specific project in Greece, ask a Greek lawyer. For the wider comparison, see Romania or Dubai and Romania or Greece.
The five layers that protect you in Romania
1. The note in the land register
The developer may promise to sell a future home only after the building permit is noted in the land register (Cartea Funciară, CF) and a CF sheet is opened for the future unit (Art. 422(6)). The preliminary contract is signed only before a notary, and the notary requests its note in the land register on the day of signing or by the next working day (Art. 422(7)–(8)).
A note in the land register makes your contract effective against third parties (Civil Code, Art. 902). In practice, a second sale of the same home shows up on the extract. What to ask for: an extract for your unit before signing, and a new one a few days after.
2. The dedicated project account
Advances paid under the preliminary contract go into a separate account of the developer, dedicated to the project you paid for (Art. 422(10)). The account is in the developer's name. It is not an escrow and not a trust. The developer may spend from it only on that project, and only with the "good to pay" stamp of the site supervisor (diriginte de șantier).
What to ask for, in writing: the bank, the account holder, the account number as it appears in the contract, a bank letter confirming the account, and the supervisor's name. We go through it in detail in our Nordis law checklist.
3. Payments tied to stages
The law caps the developer's spending from the account: 25% of the price for the structure, then 20% for the installations. It does not cap how much you pay, or when. The payment schedule is set by your contract.
What a good schedule looks like: each payment is tied to a stage that the supervisor's stamp can confirm, not to a calendar date. If a Romanian bank finances up to 70% of the price, your equity is at least 30%, and the contract should say at which stage the bank pays its part and into which account. See our guide to developer payment plans.
4. Payment through the notary
At the final contract, some buyers ask for the price, or its balance, to be paid through the notary and released to the seller only once the sale is registered. The law does not require it, and not every notary offers it. If it matters to you, ask the notary in advance how they hold the money and when they release it. We explain the notary's role in our guide to the Romanian notary.
In Dubai, the law holds the money. In Romania, the law limits how it is spent, and the rest is up to your contract.
5. A bank letter of guarantee
A letter of guarantee is a bank's irrevocable, unconditional promise to pay a sum to the beneficiary on the terms it sets (Civil Code, Art. 2321). It is independent of the sale contract. Romanian law does not require a developer to provide one, so it is a matter of negotiation. If one is offered, have your lawyer read when, and against which documents, you can call it.
And in our project? In Compass on the Lake in Balotești, payments under the preliminary contract go to the dedicated project account, under the law. We do not offer a guarantee beyond what Romanian law provides. Ask every developer, us included, the same written question: "What security is there for my money, beyond the law?"
What Romanian law does not give you
- A guarantee of completion. The developer is responsible for completing the project (Art. 422(6)), but the law does not require a guarantee or insurance for your advances.
- A cap on what you pay. The 25% and 20% caps limit the developer's spending, not your payments.
- A statutory retention after completion, like Dubai's 5% for a year.
- A shortcut in insolvency. What happens to a buyer's contract if the developer becomes insolvent is set by the insolvency law and its conditions. We explain them in our article on developer insolvency.
From the field: when the escrow money becomes bait
Attorney Ilan Leibovitch recalls a call from the head of a marketing company selling a project abroad, which his office was to handle:
The developer wanted the buyers to sign their consent to use the money they had deposited in escrow with us to pay his advance to the landowners. That was not in the contract we had prepared, and not in the deal as agreed. Escrow money is there to secure the buyers' money, not to finance the developer.
On a conference call I asked him what security the buyers would get. He was only paying an advance, he did not own the land yet, and we might not buy it in the end. He offered his personal guarantee. The marketer said no one would agree to that, not even for 10,000 euros. I told him that as the escrow holder I would find it hard to agree too, and suggested he pledge a property in the buyers' favour instead.
That story took place under a contractual escrow, not under Romanian law. In Romania the same move is prohibited by statute: advances in the dedicated account may be used only for that project, and other uses are fined at 1% of turnover. But the lesson is the same everywhere. Read what the contract says about the money, and who decides how it is used.
Six questions to ask in writing
- In which bank is the dedicated project account, and in whose name?
- Is that account number the one written in the preliminary contract?
- Who is the site supervisor who stamps each payment out?
- Is the building permit noted in the land register, and is there a CF sheet for my unit?
- Which construction stage is each of my payments tied to?
- What security is there for my money beyond the law: a bank guarantee, payment through the notary, or nothing?
Then give the answers to a lawyer of your own. Our company lawyer represents the company only, and we recommend that every buyer hire an independent lawyer.
Frequently asked questions
Is there escrow for off-plan property in Romania?
Not like Dubai's. Under Article 422(10) of Law 169/2026, advances paid under the preliminary contract go into a separate bank account of the developer, dedicated to the project, and may be spent only on that project with the site supervisor's stamp. The account is in the developer's name; there is no escrow agent.
Who holds my advance until handover in Romania?
The developer, in the dedicated project account. The developer may spend up to 25% of the price on the structure and then up to 20% on the installations, with the site supervisor's stamp. Using the money for other purposes is fined at 1% of the developer's previous-year turnover.
Is a Romanian developer required to give a bank guarantee?
No. Romanian law does not require a bank guarantee for buyers' advances. A letter of guarantee (Civil Code, Art. 2321) can be negotiated, and your lawyer should read its terms.
How is Dubai's escrow different?
Under Dubai's Law No. 8 of 2007, buyers' payments go into an escrow account opened in the project's name with an escrow agent accredited by the Land Department. The agent keeps 5% for a year after the units are registered, and if the project is not completed, acts to have it completed or the buyers refunded.
Can the notary hold my money in Romania?
At the final contract, some notaries can receive the price and release it once the sale is registered. It is not required by law and not every notary offers it, so ask in advance.
The bottom line
Romania did not copy Dubai's escrow. It built something different: a register that shows your contract, an account that limits spending, and a contract that should tie your money to the work.
Each layer only protects you if you check it. If you are about to sign for an off-plan home in Romania, with us or with any other developer, book a 30-minute call with me and we will go through the six questions against your documents.
Moti Azulay, Compass Group Romania
Sources: Planning and Construction Code, Law 169/2026, Art. 422(6)–(11), Monitorul Oficial no. 661, 10 August 2026 · Romanian Civil Code, Art. 902 and 2321 (legislatie.just.ro) · Dubai Law No. 8 of 2007 Concerning Escrow Accounts for Real Estate Development, Dubai Legislation Portal (English translation; the Arabic text prevails) · Law 169/2026: what moved where
This article is for general information only and is not legal, tax or financial advice. The rules are correct as of 17 October 2026. The descriptions of Dubai and Greece are general; for a specific project, consult a local lawyer in that country, and for Romania, an independent Romanian lawyer.
Now you know more.
This article is general information, not legal, tax or financial advice. Consult local professionals before any transaction.
