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Jun 07 , 2022

Are Escrow Accounts Mandatory in Dubai

If you are buying real estate in Dubai, you may be wondering if you need an escrow account. The short answer is, no. You as an individual do not need an escrow account. However, you may interact with one when buying a property from a developer and here’s what you need to know.

An escrow account is a legal account held by a third party to protect two parties that are involved in a business transaction together. In the case of real estate, it protects the buyer and the seller. 

In 2007, the Dubai government introduced the escrow law. This requires all developers to open an escrow account, monitored by the Dubai Land Department, and deposit 100% of funds for each specific project launched. It is a way to protect the buyer when buying an off-plan unit, which is a unit that is not built yet. In case, a developer cancels a project and the Dubai Land Department considers it cancelled, you can file a petition to get your money back. 

The government launched this to help increase security and reliability of the real-estate market. This law helps ensure that investors wont lose their funds if a project is cancelled or a developer goes bankrupt. 

It is important to note that escrow accounts should be managed by the Dubai Land Department. If you need help verifying a developer’s escrow account, we are more than happy to help!

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