Off-Plan Payments: Escrow, Stages and Developer Checks

Is it safe to pay for an apartment before it is built?

It is safe only to the extent that your money is protected until you receive what you paid for. The main risk is not that the building is never built, although that happens. It is that you hold a receipt but no title, and the developer has spent your money on the next project. Safe payment has three parts: the money sits in a separate account, it is released as the building is proved, and the last portion is released only when your unit title is delivered. The whole-purchase checklist is in buy apartment off plan. This page deals only with the money.

Does Uganda have escrow for off-plan buyers?

The nearest thing in statute is section 41 of the Condominium Property Act, 2001. It says a developer, or a person acting for the developer, must hold all money paid by a buyer under a sale agreement in trust, and must immediately deposit it in an interest-earning trust account at a financial institution licensed under the law on financial institutions, or insure the amount against loss. That is a trust duty, not a full escrow in which a neutral third party releases funds against agreed milestones.

We searched for a separate Ugandan law or regulator that requires escrow for off-plan sales and found none as of November 2026. If a developer says funds are "in escrow", ask for: the bank's name, the account name, a letter from the bank confirming the account is a trust or escrow account, and the written release conditions. Failing to comply with section 41(1) is an offence with a fine of up to 100 currency points, which is UGX 2,000,000 at the UGX 20,000 value in the Act's First Schedule (section 53). The fine is small next to the price of a flat, so do not rely on it as deterrence.

How should payments be tied to construction stages?

Section 41 gives a release rule that works as a floor: where the works on the unit and the common areas are substantially complete, the money may be paid to the developer when the title documents are delivered. Where the unit is substantially complete but the common areas are not, at most 50 percent of the money, less the interest earned, may be paid on delivery of the certificate of title, and the balance when the common areas are finished. The Act treats works as substantially complete when they are ready for use for the purpose intended (section 41(4)).

A contract can be stricter. Here is one structure to propose, with proof the buyer should ask for at each step.

No Ugandan statute we found prescribes percentages for these steps, so negotiate them. KCCA's development control FAQ says each stage of construction must be inspected and recorded on the job card, which gives you an independent record to match against payment requests.

What deposit is normal off plan?

We found no published norm in Uganda. A November 2026 listing in Naguru states "Deposit 50% and pay balance within 6 months" and other listings give dollar prices by unit size without stating terms (Land & Property listings, Nov 2026). Treat these as sellers' offers. A heavy deposit means that you carry the developer's risk, so if you accept one, insist it goes into the section 41 trust account and that refund terms are written into the contract. For comparison, our guide on how to pay for land in Uganda safely from abroad explains staged payments for plots, which follow the same principle.

What if the developer only has the title on the master?

Then the developer cannot give you a unit title until the condominium plan is registered, and your money is exposed in the meantime. Under section 3 the registrar opens a separate register for each unit when a plan is registered, and section 40(1)(f) expects you to be given the certificate of title for the unit or proposed unit before you buy. If the developer holds only the parent title, make three points part of the contract: the plan will be lodged by a stated date; unit titles will follow by a stated date; and the money stays in the trust account until your unit title is delivered. Read condominium title vs master title to see how to check which one applies. A Daily Monitor report of 2020 quotes sales staff describing a mother title held by the head of the association, so press for the written, registered position.

Which refund clauses should the agreement have?

• Cancellation right. Section 40(3) gives a 10-day right to rescind without liability in some cases, with a full refund within 10 days of written notice (section 40(5)). Ask for a similar right if title or approval proves defective.
• Late title. A date for the title, then interest or a right to cancel and be repaid in full if it is missed.
• Late completion. A handover date, with a stated remedy for delay.
• Interest. Section 41(2) says that if you take possession before getting title, the interest earned on your money from that day is applied against the price.
• Defects. A defects liability period after handover, covered in defects liability period.
• No waiver. Section 54 makes any waiver of the Act's protection void, and says your remedies under it are additional to other remedies. Do not sign a clause that tries to remove them.

If the developer stops responding after you have paid, see Developer Has Not Delivered Your Unit Title? Steps. Remember to budget for the building's running costs after handover: read Condo Service Charge in Uganda.

How do I check a developer's track record?

Ask for addresses of completed buildings and talk to owners there, not only to the developer's sales staff. Ask owners three questions: did you get your unit title, how long did it take, and does the building have an elected board and a managing agent? Under section 26 the developer must call the meeting that elects the first board within 90 days after half the units are sold, or within 180 days after the first sale, whichever is sooner, so a building with no board after that point is a warning sign. Owners of an earlier building can also use section 35 to ask the managing agent for information on court cases against the corporation and unsatisfied judgments. Combine this with a title search on each earlier project and an escorted visit: book an escorted site visit or browse apartment listings. Starting from houses and apartments for sale in Kampala helps you compare options.

Frequently asked questions

Related guides

• Buying an Apartment Off Plan in Uganda: 12 Checks
• Developer Has Not Delivered Your Unit Title? Steps
• Defects After Handover: Who Pays?
• Condo Service Charge in Uganda: How It Is Set
• Paying for Land in Stages: Escrow-Style Payments
• Condominium Title vs Master Title: Which Are You Buying?