Investors must conduct due diligence before committing to an off-plan property. This guide covers checking project legitimacy, ensuring escrow account security, evaluating project progress, and validating developer credentials.
- Validate Project Legitimacy: Verify project registration with Rera to ensure compliance with regulations.
- Ensure Escrow Account Security: Confirm the existence of an escrow account for fund protection during development.
- Assess Project Progress: Determine completion percentage and expected completion date for informed investment planning.
- Verify Developer Credibility: Ensure Rera registration, ownership of development land, and necessary permits.
- Confirm Legal Compliance: Verify developer permits and approvals from DLD and Rera for off-plan sales.
Understanding Investor Rights: Consult Law No (8) of 2007 for Escrow Accounts, emphasizing the escrow account’s role in ensuring transparency and accountability.
- Article (6): Developers must open and maintain an escrow account for each project.
- Article (9): Developers must maintain the escrow account throughout the development process.
Key Escrow Account Provisions:
- Article (7): Ensure all investor payments are deposited into a designated escrow account.
- Article 12: Depositors have access to account records for transparency.
- Article (15): In case of non-completion, the escrow agent safeguards depositors’ rights, ensuring project completion or refunds.
Guidance in Non-Delivery Scenarios: Investments in legitimate off-plan units are protected by the escrow agent if developers fail to deliver on time. Seek guidance from the DLD in such situations.
Understanding Sale Purchase Agreement Terms: Thoroughly review terms related to project completion, time extensions, and other crucial matters before finalizing the agreement.
Legal Consultation is Advisable: Consult with a Dubai legal practitioner for expert advice on sale purchase agreements and related matters.