Step-by-step guide to escrow account transfer with DLD
In the dynamic real estate market of Dubai, protecting the interests of all parties involved in property transactions is one of the government’s main goals. The Dubai Land Department (DLD) has established a system of escrow accounts to safeguard the funds of property buyers, especially in off-plan projects. However, there may be situations where a real estate developer needs to transfer the escrow account, particularly if a project is delayed or requires direct financing. This guide outlines the process to apply for an escrow account transfer with the DLD.
HOW TO APPLY FOR ESCROW ACCOUNT TRANSFER WITH DLD IN DUBAI
An escrow account is a financial arrangement regulated by the Real Estate Regulatory Authority (RERA) under the DLD. It primarily protects buyers’ interests when purchasing off-plan properties in Dubai. Here are the steps to apply for an escrow account transfer with DLD in Dubai.
Terms and Conditions
Real estate developers in Dubai wishing to transfer an escrow account must meet the following conditions:
- The project must be active and under development.
- A technical report from DLD, no older than four months, must be submitted.
- The project must meet all required milestones with no red flags.
- The purpose of the escrow transfer must be for direct financing.
- Written approval must be obtained for the financing plan.
- All data and financial details must be transferred from the old account to the new account.
- A No Objection Certificate (NOC) from the existing trustee is required to open a new account.
- The developer must provide an undertaking that the account will remain active for at least three months and a maximum of one year.
- Another undertaking is required to transfer the collected funds to the new trustee.
- The new trustee must submit an NOC, and the previous account must remain inactive until all transfers are completed.
- The transfer of all assets must be completed within three business days.
- RERA must approve the new escrow account before it can be used.
Escrow Account Transfer Procedure
The application process for an escrow account transfer with the DLD is streamlined and can be completed online. Developers are not required to submit additional documents, making the process more efficient.
Follow these steps to apply:
- Log in to the Oqood Portal: Access the Oqood portal to begin your application process.
- Select the Service: Choose the ‘escrow account transfer’ service and submit the necessary application.
- Trustee Processing: The trustee will receive the application from the old escrow account.
- Application Forwarding: The application is then forwarded for review.
- Audit and Approval: An audit of the application will be conducted by the DLD, usually within 24 working hours. The service delivery time is estimated at 45 working hours.
- Use of New Escrow Account: Once the transfer is approved, developers can use the new escrow account for the project.
Escrow Account Transfer Service Fees
One of the biggest advantages of applying for an escrow account transfer with DLD is that no fees are involved. The application is processed entirely through the Oqood portal without any additional charges.
FAQs
WHAT DOCUMENTS ARE REQUIRED TO APPLY FOR ESCROW ACCOUNT TRANSFER WITH DLD?
No specific documents are required for the application, as the process is handled through the Oqood portal.
WHO OWNS THE MONEY IN AN ESCROW ACCOUNT?
The buyer retains the right to the funds in an escrow account until the developer meets the required milestones. If a project is delayed or cancelled, buyers may cancel their sales and purchase agreements and recover the funds from the escrow account.
HOW MUCH DEPOSIT SHOULD I PAY TO BUY OFF-PLAN PROPERTY IN DUBAI?
The down payment for upcoming off-plan projects in Dubai varies from project to project. Typically, the value for off-plan apartments and villas in Dubai ranges between 5% and 20% of the total property value.
That concludes our guide on the escrow account transfer procedure. Transferring an escrow account in Dubai is a well-regulated and straightforward process designed to protect the interests of all parties involved in property development.
Don’t forget to check out the tips for buying off-plan property in Dubai to understand where to look for such properties and who the top and trusted developers in the market are.
