In off-plan properties, an escrow account holds funds until the transaction is completed. Developers can utilise a certain amount from the escrow account after achieving a milestone set by the authorities. They are also required to submit an application to withdraw from an escrow account, even if the withdrawal is their profit. That said, the withdrawal of surplus amounts is only possible when the application is approved.
Here is how to submit an application for project profit withdrawal in Dubai.
How to Apply for Project Profit Withdrawal in Dubai
An escrow account for off-plan project payments is established to safeguard the rights of buyers and developers. That said, property developers are more responsible for the escrow account and therefore, require approval to withdraw their profit.
Following are all the details regarding the application submission for project profit withdrawal in Dubai.
Service Procedure
To submit an application for project profit withdrawal in Dubai, developers are required to follow these steps.
- Step 1: Login ‘Oqood Portal’ and search ‘Escrow Account Link’
- Step 2: Fill in the required information and submit the application
- Step 3: The application will be scrutinised by the Account Trustee and forwarded to the Escrow Account Department
- Step 4: The application will be verified by the Escrow Account Department. If the application is approved, the Account Trustee will take the necessary actions
Application Process Time and Fee
The service delivery time for the project profit withdrawal application process in Dubai is around 33 business hours. Whereas, the waiting time is around 29 business hours. The service is free of cost for the developers.
Terms & Conditions to Submit Application for Project Profit Withdrawal in Dubai
Developers submitting the application to withdraw profit from the escrow account must cater to the following terms and conditions.
Profits from Under Construction Project
If the profit withdrawal is from an under-construction project, the following conditions must be fulfilled.
- The status of the project should be active.
- The developer must comply with the risk criteria and solvency before submitting an application.
- Make sure 5% of the net amount collected in an account is present. This amount serves as a completion guarantee and can only be withdrawn after permission from RERA Dubai.
- Recently issued (maximum 4 months) issued by the Land Department and absence of red flag in the last milestone is necessary.
- The amount remaining in the escrow account must be enough to cover the remaining project cost.
- The developer is obligated to declare work continuation, regardless of the money collection after withdrawal.
- An undertaking by the developer is required to agree to cover all the financial claims.
- In the case of a mortgage, an NOC from the financing bank is required.
Profits from a Completed Project
For completed projects, the terms and conditions to withdraw profits are as follows.
- Project status must be completed
- The technical report from the Land Department shows the project is 100% completed.
- The confirmation and transfer of 5% amount equivalent to the net collection in the completion guarantee account to the establishment’s escrow account.
- In the case of a mortgage, an NOC from the financing bank is required.
- Escrow account closure or transfer to the company’s account and update the title deed.
FAQs
Can the developer withdraw all the profit from an escrow account?
No, 5% of the net amount must be present in an account, if the project is under construction.
Can I withdraw profit from the escrow account without achieving milestones?
No, removing the red flag from the previously achieved milestone is necessary for withdrawing profit.
What is the fee for submitting an application for project profit withdrawal in Dubai?
The application for project profit withdrawal in Dubai is free of cost.
This was all about how to submit an application for project profit withdrawal in Dubai. The process of project profit withdrawal is convenient, yet it requires developers to fulfil a number of requirements. The requirements not only protect the rights of buyers but also increase transparency. This is one of the major reasons for Dubai’s fast-growing real estate market. If you are also planning to invest in an off-plan, here are some new developments in Dubai that you can browse through and choose from.
Besides, if you are new to the market, here are a few risks when buying off-plan in Dubai that you must be aware of.
Stay tuned to dubizzle’s property blog for more information on off-plan projects.
