Dubai Land Department Fines Developers For Breaking Off-Plan Property Rules
Real estate developers in Dubai were fined $407,400 by the DLD for violating off-plan property rules. Each of the three developers is to pay more than $136,000 for promoting and marketing their projects without completing the established procedure designed for off-plan properties.
Off-plan property developers are required to verify that their projects are licensed and registered with an escrow account. This account is used by buyers to deposit their installments or remaining dues. An Escrow account secures funds of buyers and makes real estate transactions more transparent and reliable. Developers cannot use funds except for development, sales, and marketing purposes.
By Law No. 8 of 2007 on Real Estate Development Escrow Accounts, The Dubai Land Department (DLD) fined three developers for promoting and marketing their off-plan projects without completing the required legal procedures.
Director of the Real Estate Control Department at RERA at DLD, Ali Abdullah Al Ali said, “The Real Estate Control Department continuously monitors the market in Dubai to ensure that all real estate companies comply with the laws and regulations governing real estate activities.
“We urge all to adhere to these laws and regulations to avoid any legal action.
“By doing so, we can create a secure investment environment. Investors must verify that off-plan projects are licensed and registered with an escrow account by checking through the Dubai REST application of the Land Department, and should not make any payments outside the project’s escrow account.”
The authorities ask investors to use escrow accounts to deposit their dues and not use any other medium because this system has been established to make the off-plan real estate system more transparent, reliable and secure. Real estate developers are also informed to adhere to the rules and regulations to avoid any legal problems.
