In the first of its meeting in years, the Dubai Land Department (DLD) answered queries of developers to even assuring them that “escrow accounts cannot be attached by any order”.
The announcement will ensure that developers will have access to funds and a single legal dispute will not stop funding to a project with the developer having to seek alternative funding options.
“It is good news for us since any order/judgment cannot stop the Real Estate Regulatory Agency (Rera) from releasing funds from the escrow account. Lack of funds from the escrow account does delay the project,” a developer, who attended the developers meet on last Thursday, told Emirates24|7.
Law No. (8) of 2007 concerning Guarantee Accounts of real estate developments in Dubai provides checks to prevent developers from misusing monies paid in to the escrow account with Article 9 of the law stating that a developer is obliged to use the payments made into the escrow account exclusively for the project for which the payments were made.
Legal experts have previously confirmed to this website that opening of an escrow account does not guarantee completion of a project with investors having the right to examine the account records.
During the meet, developers raised concern over project cancellation, citing delay by master developers, to which the department said they (developers) have the right to file legal claims against the master developers.
Referring to individual investors in their projects filing cases against the developer, the department suggested that developers should also seek legal resource for losses incurred by them due to delays by a master developer.
In the base prospectus, released on January 17, Rera, the regulatory arm of DLD said 187 projects have been completed since the beginning of 2009; 253 projects are on hold; 232 projects are likely to be completed in due course.
Each of these 253 registered projects are likely to qualify for either the Tayseer or the Tanmia initiative, the DLD has stated in the planned sovereign bond prospectus.
Dubai has 596 registered developers and 852 registered brokers as of March 31 2012.
Earlier this month, Knight Frank, a global property consultant, revealed that property prices in Dubai rose 18.3 per cent in the past one year (March 2012 to March 2013), with the emirate maintaining it's position among the top five best performing real estate markets in the world.
According to its first quarter 2013 Prime Global Cities Index, the emirate was ranked fourth in the list of 29 global cities with prices rose 5.4 per cent in the last three months (December 2012 to March 2013), the third highest in among the global cities compared.
Dubai is the only city from the Middle East on Knight Frank list and is ranked higher than prime markets such as Monaco, London, Hong Kong and Moscow.
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