What Is Escrow account and how to check

The concept of escrow accounts in Dubai has been introduced to streamline off-plan real estate transactions and manage fund disbursement. This account acts as a third party or middleman in real estate transactions in Dubai, Abu Dhabi, UAE. A buyer deposits funds or payments in an escrow account which secures this payment and transfers it to the developer only when the property is handed over to the buyer, reducing the risk of fraud and ensuring transparent transactions.

Dubai’s real estate market is growing rapidly and attracting investors worldwide. It offers a luxurious ambiance to live, work and create memories. Given its splendid skyline, unparalleled structure and modern facilities, it is one of the best places to feel the epitome of luxury and serenity. This trend has also increased the demand for off-plan properties in Dubai. So, to secure and protect the investments of investors, the authorities in the Emirates took several measures and of them is the concept of Escrow Account Dubai.

What Is An Escrow Account?

An Escrow Account is basically a safekeeping account in which deposits of off-plan properties’ buyers are deposited until the property is handed over to them or all installments are paid. The government authorities manage these accounts to create a safe and secure environment for real estate business, prevent the possibility of fraud and forgery and maintain the trust of investors.

How Does This Account Work?

RERA Dubai and TAMM Abu Dhabi are responsible for establishing Escrow Accounts in their respective domains. It is normally created when an agreement for buying an off-plan property is signed and buyers are then required to deposit installment payments in escrow accounts until the complete payments are paid or properties are handed over to them. On the other hand, developers can use this payment only for sales, consultancy, marketing and land payments. Besides these expenses, developers are not allowed to use these deposited payments.

Benefits Of Escrow Accounts In Dubai, UAE:

Enables A Hassle-Free Transaction Process

As we understand this account serves as a middleman, it keeps the fund until all installments are paid. A buyer is responsible for depositing the remaining funds and the developer is prevented from using these funds except for construction, selling, marketing, etc. No party holds the submitted funds, making the transactions more smooth and secure.

A Reliable Transaction Process

The purchase of off-plan properties in Dubai involves installment plans, stretching the payment plan over multiple years. A buyer is responsible for paying monthly installments. He has to deposit these payments in an escrow account, making transactions secure for both buyer and developer.

Reduces The Risk Of Frauds And Financial Discrepancies

An escrow account serves as a middleman or third party and the government authorities manage such accounts, reducing the risk of fraudulent activities. Both parties understand that their finances are secured and if there is any breach or violation of the agreement, they would be compensated.

Keeps The Record Of Installment Payments

This is also a legal record of installment payments made by the buyer. This record can also be used in legal matters.  It means this record can be invaluable in resolving disputes because this record can be used as critical evidence in legal matters, ensuring a verifiable history of payments.

Assures The Completion of A Project

Developers can use these funds to develop that project, limiting the risk of delays and ensuring timely completion. This method makes sure that a developer has enough resources to adhere to project schedules and quality standards and he is less likely to encounter financial hurdles.

How To Set Up An Escrow Account?

It is quite easy to create an Escrow Account in Dubai. The developer who is selling an off-plan property needs to contact the relevant authority in order to activate an Escrow account. 

You Need To Consider The Following Points To Open An Account

• First of all, you need to log in to the Oqood portal and select the escrow account link
• Now, choose the required services and then submit your application
• Trustee Account will receive and overview your application
• The trustee then uploads and sends the documents of findings via this system
• The Escrow department will evaluate and select or reject your application
• Upon the approval of the application, the system will be automatically updated

How To Check Approved Escrow Account Trustee?

Check the Dubai Land Department (DLD) website and select the “All Services” option

Now, clinic on the “Information Services” tab and select “Approved Escrow Account Trustees”

Click on “Access The Information” and view your required details

Summing Up:

An Escrow account ensures transparency and reliability in off-plan property transactions in Dubai. A developer has to establish an escrow account to receive funds from the buyer. This account serves as a third party. This initiative has reduced the possibility of fraud and makes off-plan real estate transaction processes more transparent and smooth. An investor deposits his remaining installment in an escrow account. This payment will not be released unless the property is handed over to the buyer. A developer can use that amount for development, sales and marketing purposes.

Considering An Off-Plan Real Estate Investment? Let Us Assist You!

Kelt & Co Realty offers all sorts of real estate services and facilitates real estate transactions in Dubai. If you want to invest in an off-plan commercial or residential property then our experts can find the most viable investment option based on your preferences and interests. Kelt & Co Realty’s professionals believe in a win-win situation and strive hard to bring about the desired results for our clients because they are dedicated and enthusiastic to bring value.

FAQS: