The Dubai Land Department (DLD) takes the initiative to secure the rights of the parties involved in property transactions. One such initiative is an escrow account for property developers. It safeguards the instalments paid by buyers and manages the account until the project’s completion and handover. That said, real estate developers can request an escrow account transfer if the project is delayed or if they want to finance it directly.
However, developers must apply for an escrow account transfer in Dubai. Here’s the complete procedure and terms and conditions for transferring escrow accounts.
Escrow Account Transfer Application in Dubai
Governed by the Real Estate Regulation Authority (RERA), an escrow account help buyers pay the instalments of an off-plan project. After signing the purchase agreement, the buyers have several off-plan property payment plans in Dubai.
These plans have instalment options. Buyers can transfer these amounts to the developer’s escrow account. Moreover, developers can transfer their escrow account and inform the new account number to the buyers. However, they must submit an escrow account transfer application with DLD in Dubai.
Terms and Conditions
The real estate developers in Dubai must meet the following requirements when they apply for escrow account transfer with Dubai Land Department in Dubai.
- The project must be under development, and its status must be active.
- Developers must have a technical report from the DLD that is at most four months old.
- There must not be a red flag on the project’s achieved milestones.
- The escrow account transfer must have the purpose of direct financing.
- A written provision approval must be provided for financing.
- When developers apply for an escrow account transfer in Dubai, they must upload all the details, documents and financial data from the existing account to the new escrow account.
- The trustee must submit a No-objection certificate (NOC) to open a new account.
- A signed undertaking must be provided that states the account will remain open for not less than three months and not more than one year.
- Developers must provide another signed undertaking to transfer the collected funds from the old account to the new trustee.
- New Account’s trustee must submit a no-objection certificate (NOC).
- An undertaking must be signed to keep the project’s escrow account inactive until all transactions and amount transfers are completed from the previous account.
- All assets must be transferred from the old escrow account to the new one within three business days.
- RERA must approve the new escrow account.
Procedure
Since no documents are required, the process to apply for an escrow account transfer with DLD in Dubai becomes easier. Here are all the steps:
- Log in to the Oqood Portal
- Select the escrow account transfer service and submit the application
- The trustee will receive an application from the old account, which will be transferred
- The application will be forwarded
- An escrow account application audit will be conducted
- After approval, developers can use the new escrow account after the transfer
Fees
The application takes place through the Oqood portal. Besides, there is no fee to apply for an escrow account transfer with DLD in Dubai.
FAQs
Who Owns the Money in an Escrow Account?
The property buyer has the right to the money in an escrow account. In case of an off-plan project delay, a buyer can cancel their sales and purchase agreement and receive the money.
Who can apply for an Escrow Account Transfer?
In Dubai, only real estate developers can apply for an escrow account transfer.
What documents are required for the transfer of escrow account?
For the transfer of an escrow account in Dubai, no documents are required. The process is straightforward and does not require additional paperwork from the parties involved.
How long does the escrow account transfer process typically take?
The escrow account transfer process in Dubai typically takes 3 business days to complete
How do I set up an escrow account in Dubai?
To activate an escrow account, a real estate developer must submit the following documents:
- Membership certificate in the Dubai Chamber of Commerce and Industry;
- Developer’s trade licence
- Title deed
- Contract copy between the developer and sub-developer
- Approved initial architectural designs and engineering plans
- Certified financial statement of the project
- An undertaking to start the work as soon as the off-plan property sale is registered
- Sale-purchase contract between the developer and the purchaser
If you’re a developer looking to access funds from your project account, understanding the profit withdrawal process is just as important as escrow transfers. Explore how to apply for project profit withdrawal in Dubai.
These were all the details on how to apply for an escrow account transfer in Dubai. When you buy a property in Dubai that is an off-plan development, you must pay the instalments in the escrow account provided by the developer. Besides, if you want to terminate the agreement due to a delay in the project or other issues, you can learn from the guide to cancel sales and purchase agreements in Dubai.
If you’re dealing with mortgage-related transactions, it’s essential to understand how mortgage funds are deposited into an escrow account. Check out the details for depositing a mortgage into an escrow account application service and learn about the process.
Stay tuned to the dubizzle real estate blog to learn more about processes and requirements for different property processes.
