People buying properties off plan in Dubai will make their payments into special escrow accounts managed by banks, auditors and Land Department instead of directly to the property developers.
A new escow account law came into effect on 28 June 2007. It applies to any developments where off-plan sales were launched after that date. For developments that are already 70-80 per cent completed, the developer will not be required to open an escrow account. For developments where work has started on site and passed the shoring stage, an escrow account will need to be opened by the end of December 2007. For developments that have not reached shoring stage, a trust account will need to be opened immediately, the Land Department said.
The funds paid to these escrow accounts can only be used for the project for which they were intended and will be released to the developer in stages only when certain levels of construction are completed.