Escrow accounts

A Escrow account is a fiduciary account that is mandatory in Dubai for secure property transactions. It is managed by an authorised bank and serves to protect all parties involved by ensuring that payments are only made according to agreed terms. This system is a central component of the Dubai Land Department (DLD) established security measures.

In Dubai, the Escrow system plays a fundamental role in property transactions and has been made mandatory by the Real Estate Regulatory Agency (RERA) to ensure maximum transparency and security.

The most important features of an escrow account are

  • All payments for property projects must be processed via this account
  • The developer has no direct access to the deposited funds
  • Payments are only made after defined construction progress has been achieved
  • Regular monitoring by the RERA

For Property investors the system offers several important advantages:

  • Protection against misuse of deposited funds
  • Transparent use of payments
  • Reduced risk of project delays or cancellations

The practical implementation is such that, in the case of a property purchase, all payments are made to the Escrow account are paid in. The managing bank monitors compliance with the contractually agreed conditions. Only when certain milestones have been reached - such as the completion of a construction phase - are the corresponding instalments released to the developer.

The system is particularly relevant for New construction projects (off-plan properties). Here it protects buyers from potential risks such as construction delays or developer insolvency. The RERA has established strict guidelines for the management of these accounts and only licensed banks are allowed to act as trustees.

For international investors, this is Escrow system an important confidence factor that strengthens Dubai's position as a safe property location. It is a key component of modern property regulation in Dubai and contributes significantly to the stability of the market.

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