What is the Need of Hiring an Escrow in Dubai?
An escrow account is a lawful
account where a commodity or a financial instrument is owned by a third party –
a person or an entity – on support of 2 other parties who are in the process of
making a commercial transaction. The Escrow agent shall keep the fund or funds
until the final responsibility has been met.
An account can contain shares,
funds, cash or other resources. It's an easy concept. Instead of going straight
to the developer's wallet, the interest you spend is deposited in a specially
controlled account opened in the interest of the construction of the property
in an official bank.
This is to discourage developers
from raising money at the outset of a project and using it to purchase another
plot or spend it somewhere else, instead of actually constructing a project. If
you are a person who is living in Dubai then you are very much lucky because
there are some of the best escrows present in Dubai from whom you can take all
sort of help. You can find a lot of Escrow Agent Dubai, who are very
much qualified and ready to help you at any point of time.
Advantages of Escrow
• The Escrow Dubai lets the
sellers and buyers monitor their goods.
• Preserves the transaction
• There is significant coverage
for one's own money or investments in the Escrow account
• Escrow reduces fast, long sales
processes and saves time
10 Things to Keep in Mind
about RERA/Escrow Account in Dubai
1. The escrow statute requires
owners to keep back 5% of the gross value of the account for a term of one year
in order to offset any faults that could occur in the property over that
period.
2. Any developer must seek
permission from Dubai Land Development prior to registering in the escrow
account.
3. Any project creator that does
not have an RERA license and an escrow account can be liable to substantial
penalties and incarceration.
4. No media outlets may include
advertising for unlicensed real estate investments.
5. Unregistered developers are
not entitled to engage in any exhibition to advertise their off-plan
properties.
6. Under the RERA rule, any
developer who has postponed the launch of a project for more than 6 months
after receiving the DLD approval can be de-registered.
7. Each licensed bank has a
dedicated team to review the execution and maintenance of Escrow accounts.
8. No lenders of land developers
shall be allowed to take any balance in the escrow account.
9. The licensed RERA developers
are to open a bank account in one of the accredited banks in the UAE; the bank
account must be used only for that specific project.
10. The purchaser can use the
unique reference number provided by the developer during payment to the Escrow
account.
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