Which entities are required by law to open a real estate escrow account?
In Dubai's real estate sector, Law No. (8) of 2007 Concerning Escrow Accounts for Real Estate Development mandates that developers selling off-plan properties must establish escrow accounts. This requirement applies to:
Master Developers: Entities overseeing large-scale developments, responsible for the overall project and any sub-developers involved.
Sub-Developers: Entities undertaking specific portions of a larger development, operating under the master developer's umbrella.
Both must comply with the escrow account regulations to ensure transparency and protect investors' funds. The Real Estate Regulatory Agency (RERA) oversees the implementation of these regulations, ensuring that all developers adhere to the law.
By mandating escrow accounts, Dubai aims to enhance trust in its real estate market, ensuring that funds are used appropriately and projects are completed as promised.
