ARRA/ Escrow accounts and repayments
Hello again everybody
Having just heard about the set up of Escrow accounts I decided to Call my developer LakeViewTowers. After the usual run around talk on the phone and 5 tranfers to god knows who, I was still none the wiser on LVT shift towards setting up an escrow account. Furthermore I was unable to speak with anyone worthwhile. I have to call back after 15.00 as they take there lunch break from 14.00-15.00. Having seen the number for ARRA on this website I decided to call and ask a few simple Questions. Great, the lady i spoke to on the phone said that all developers in Ajman have to reg. with them. ARRA has contacted all developers in Ajman and informed them to set up an escrow account. They can not receive anymore payments from investors until escrow account is set up. They must set up an escrow account however there has been no deadline put in place for them to do so, or there was a deadline but they have extended it.
I hope to get some info from LVT when i call back. Because i´m a bit unsure wether or not to make the next payment. Ofcourse i will make it if LVT have an escrow account in place, but if not what should I do???.Should I make the payment if they don´t have that escrow account??? And how can we as investors confirm the account numbers they give us are actually for a escrow account??? Also not paying means i´m defaulting on the contract of payment. But I´m doing so on the advice from ARRA. Where do we stand on that??? Is ARRA the higher power and or we liable to LVT to finish our payment as per contract????
Any advice???
Riku_007: I had the same
Riku_007:
I had the same exact advice from ARRA - someone visited them on my behalf. ARRA website is www.arra.ae
For anyone planning to go there - the office is where the old Ajman Immigration Office used to be.
As for how will you know when the escrow account has been set up - I was told that the escrow account name usually contains the name of the project. In any event, I would not transfer any funds / issue cheques till I have independently confirmed with ARRA that the new account number is in fact valid for the project.
In addition, ARRA says (not sure if they will enforce & specifics ) that developers can tap the escrow account only when construction progress has caught up to the payment level. In my case, they have 35% of the payment - and very little to show for it.
By the way, as to how ARRA will mediate when the developer tries to enforce the terms of the contract, which at the time was OK, but now run against certain clauses in the new law - I do not know. Time will tell, if they ultimately are on the side of the buyers, on the side of the developers or truly and independent regulatory body. So far, looks good.
Regards
By the way, having paid up
By the way, having paid up 35% and sitting and waiting all this time - on ARRA's advice, I stopped any further payments.
I have also documented it via email, and told the developer why I was stopping it. ie - because they had not set up the escrow account. I'd recommend you document as much as possible.