news law no 8 of 2006 trust account law

 

 
 
 
 
 
 
 



News Releases
 
Law No. 8 of 2006
– Trust Account Law
 

His Highness Shaikh
Mohammad Bin Rashid
Al Maktoum, Vice
President, Prime
Minister of the
U.A.E. and Ruler of
Dubai, has issued
Law No. (8) of 2006
concerning guarantee
accounts of real
estate developments
in the emirate of
Dubai.



The Law (8) on
Guarantee Accounts
or commonly known as
Trust or Escrow
Accounts applies to
any company or
individuals
receiving ‘off plan"
payments for
property that is not
yet completed.
However, at this
early stage only
properties that are
launched from the
affectivity of this
law will be subject
to the law,
according to the
Dubai Land
Department. Under
the new law, people
buying properties in
Dubai off plan will
make payments into
special accounts
managed by banks,
instead of directly
into property
developers’ end.
From now on
developers launching
new residential or
commercial
multi-storey
buildings and
compounds shall now
apply to Dubai Land
Department for a
guarantee account by
submitting the title
deed of the plot
being developed,
approved
architectural
designs and lay
outs, a letter of
approval from the
master developer and
a trade license.
Payments made by the
buyers or financers
towards properties
will then be
deposited to this
guarantee accounts
opened by the
developers under the
name of the property
development in an
approved bank. In
order for the
developers to gain
access to the
guarantee accounts,
they have to apply
for an approval from
the trust account
manager by producing
certificates proving
that the building
work has reached the
required stages. The
trust account
manager must then
inform the Dubai
Land Department for
the application of
the developer for an
access to the trust
account stating the
sum amount applied
and released to the
developer. According
to the Dubai Land
Department, they
will keep 10% of the
project value on the
account for one year
after completion
until all units are
registered in the
names of the buyers
and title deeds are
issued under the
buyers’ name. Fines
of no less than AED
200,000 is to be
imposed upon
violation of any
requirements of this
new law.

 


 
 


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