In Dubai, escrow account trustees, typically approved banks or financial institutions, are responsible for managing funds allocated for specific real estate development projects. Their primary role is to ensure that these funds are used exclusively for the project's construction and related expenses, as mandated by Law No. (8) of 2007 Concerning Escrow Accounts for Real Estate Development in the Emirate of Dubai.
Provision of Financing by Escrow Account Trustees:
The law does not explicitly prohibit escrow account trustees from offering additional financing to real estate development projects. However, any such financing would be subject to standard banking regulations and due diligence processes. It's essential to note that the funds held within the escrow account are strictly designated for the specific project's development and cannot be used as collateral or diverted for other purposes.
Key Considerations:
Segregation of Funds: Monies deposited in the escrow account are solely for the construction of the designated real estate project. These funds are protected from claims by the developer's creditors and cannot be used as security for loans.
Regulatory Compliance: Any financing provided by the escrow account trustee must comply with the Central Bank of the UAE regulations and the guidelines set forth by the Dubai Land Department (DLD) and the Real Estate Regulatory Agency (RERA).
