Yes, in Dubai, real estate developers are required to open escrow accounts for certain types of real estate transactions. This is part of the regulations put in place by the Dubai authorities to protect the interests of buyers and ensure the completion of real estate projects according to the agreed terms.
According to rules established by the Dubai Land Department (DLD), real estate developers must open escrow accounts for real estate development projects. Funds from buyers, such as advance payments and down payments, are deposited into these escrow accounts rather than being paid directly to the developer.
The purpose of this requirement is to protect buyers' funds by separating them from the developer's funds and shielding them from any financial or legal risks related to the developer or the project. Funds in the escrow account are gradually released to the developer in accordance with the progress of the project or according to the terms agreed between the parties.
Escrow accounts must be opened with DLD-approved banks, which act as escrow agents and oversee financial transactions related to real estate projects. This helps ensure transparency and security in real estate transactions in Dubai.