x Abu Dhabi, UAEFriday 28 July 2017

RERA freezes developer escrow accounts

This is the latest measure by the authority to safeguard the interests of property investors as the market grapples with a shortage of lending and declining property prices.

The Dubai Real Estate Regulatory Authority (RERA) has frozen the escrow accounts of some property developers as it awaits assurances that construction is progressing and that all homes sold have been registered with the Dubai Land Department. This is the latest measure by the authority to safeguard the interests of property investors as the market grapples with a shortage of lending and declining property prices.

Marwan bin Ghalita, the chief executive of RERA, said some developers needed to provide technical reports to the authority's trust account department detailing the progress of construction before they can withdraw money from the accounts. "There can be no withdrawal until they have completed the technical report," he said. "Payment needs to be linked to construction progress. They also need to prove to RERA that they have registered investors rights with the Land Department."

Mr bin Ghalita would not say how many accounts had been frozen. RERA introduced the escrow account law in February last year. agiuffrida@thenational.ae