For real estate developers in Dubai, managing project funds efficiently is essential, especially when dealing with construction costs. In situations where the main escrow account has a shortfall, developers have the option to request a disbursement from the project completion account to keep the project moving forward. In such cases, developers can turn to the Dubai Land Department to ensure that construction continues smoothly, even in the face of temporary financial gaps. This can be done while maintaining strict regulatory oversight and compliance with DLD standards.
Here’s a quick guide to help developers understand how to request payment from an escrow account in Dubai, the necessary documentation and procedure.
Required Documents to Request Payment from the Escrow Account in Dubai
To initiate a disbursement request, the developer must submit a signed undertaking. It should state that the developer will continue the project without halting construction, regardless of payment dues or any pending financial claims (including those payable to consultants).
How to Request Payment from the Escrow Account in Dubai
Everything is managed through the Land Department’s digital portal, specifically via the Oqood system. Here’s how it works:
- Log In: Visit the Oqood Portal and sign in. Navigate to the escrow account section and select the relevant service.
- Submit Application: Fill in the required fields and upload all necessary documents.
- Initial Review by Account Trustee: The Account Trustee reviews the project’s financial solvency and uploads their findings via the system.
- Audit by Escrow Account Department: The escrow team at the Land Department will audit the application and either approve or reject it.
- Final Step: If approved, the Account Trustee is notified to carry out the fund disbursement process.
Terms & Conditions
Before submitting an application, developers must ensure they meet the following conditions:
- The project must be officially marked as ‘Active’ in the system.
- Developers must comply with the financial risk standards set for real estate projects.
- A recent technical report issued by the DLD Dubai (no older than four months) must be submitted. The report should confirm there were no ‘red flags’ during recent project milestones.
- The developer must pledge to continue construction, regardless of payment collection status. A clear, approved timeline from the project consultant is required.
- The developer must also commit to settling other outstanding payments, such as fees due to consultants.
- If the land is mortgaged, a NOC must be obtained from the financing bank.
Similarly, the DLD has established a streamlined process for transferring the escrow account, ensuring transparency and a seamless experience for all parties involved.
FAQs
Is there a fee for requesting a payment from the project’s escrow account?
No, there is no fee for requesting a payment from the project’s escrow account.
How long does it take to process a payment request from the escrow account?
The application may take up to 29 business hours to move from submission to initial review. Once reviewed and approved, the disbursement process will be completed within 28 business hours.
Can a developer request multiple payments from the escrow account in Dubai?
Yes, a developer in Dubai can request multiple payments from the escrow account, but only after completing verified construction milestones. Payments are also released gradually based on project progress to protect buyers and ensure funds are used appropriately.
Here is all you need to know about how to request payment from an escrow account in Dubai. By following the procedures and maintaining transparency, developers can keep their projects moving forward, even during challenging financial phases. This knowledge is essential for making informed decisions when investing in off-plan properties for sale in Dubai.
Stay tuned to dubizzle real estate blog for more insights into the processes shaping and streamlining Dubai’s real estate market.
