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Why Investments in Dubai Real Estate are safe through Escrow

Posted by admin on February 27, 2014
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Dubai Real Estate has been a significant investment vehicle for investors around the globe. Investments in Dubai Real Estate does not only offer safety and security, but also offers tax free investment opportunities that are lucrative for any kind of investor seeking better returns. When it comes to investment in Dubai, Dubai Land Department has setup Real Estate Regulatory Agency (RERA) that looks after and ensures security of investments within the real estate sector. The Real Estate industry, categorizes investors into two different groups. Firstly there are investors who are aiming on immediate returns on investment, and secondly the investors who aim at better capital appreciation which is long term investment generally. The later ones are often attracted towards off plan investments, which after completion offer better capital appreciation. However, as the experts say that greater returns are associated with greater risks, and similarly for off plan investments where the returns are better, the risks involved are higher as well.

The risks involved on off plan investments can be chunked down to major and minor risks, the major risk with off plans are the stall projects which in the past have affected the industry drastically. The introduction of Escrow accounts by RERA has actually mitigated a lot of risks that are involved in off plan investments. Initially, the escrow accounts were opened after verification of all compliances from the developer side. The escrow account is fully in control of RERA and not the developer, and payments are released based upon the progress of the construction. Hence, whenever an investor purchases any unit the investment initially goes to Dubai Land Department escrow account for that associated development. And in anyway, if the developer is not able to deliver the unit or the project gets stalled, the investor would be able to get their investment back safe and secure.

The other major risk involved with the off plan developments are the delays in delivery. Hence, in order to cope up with this, RERA also ensures that the developer starts to pay the rent to the developer as returns on their investment according to the market, until the property is handed over. Although the rents do not start the next day of the delivery if the developer is not able to deliver the unit, as there is some grace period (varies from 6 months to 12 months) involved, but this actually ensures that the investment would not go in vain even if the developer is not able to meet the deadline of handover.

Viridian at The Fields, MBR City, Dubai is one such development that follows all compliance and has an approved Escrow Account number through Bank of Sharjah and SPF Realty is the exclusive agency to sell the development. If you wish to meet SPF Team and consult about your investment requirements, you can call on 800 773(SPF).

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