Emirates City Forum

Dubai issues new payment rule
United Arab Emirates: Wednesday, December 31 - 2008 at 11:27
Dubai's Real Estate Regulatory Agency (Rera) has issued a new rule which says developers can collect no more than 20% of the cost of a property from a buyer until construction begins, reported Emirates Business. 'We have sent out letters to 100 developers - as well as having meetings with them and lending banks and institutions - telling them to take payments from buyers worth only up to 20% of the contract value,' Essa Saeed Ahmed Al Mansoori, Head of the Trust Accounts Section at Rera's Real Estate Development Trust Account Department, told the daily. Rera has set up an 11-member Real Estate Development Trust Account Department that will supervise and monitor the construction process and ensure the escrow amounts are collected in accordance with the agreed schedule.'We have sent out letters to 100 developers - as well as having meetings with them and lending banks and institutions - telling them to take payments from buyers worth only up to 20 per cent of the contract value,' Essa Saeed Ahmed Al Mansoori, Head of the Trust Accounts Section at Rera's Real Estate Development Trust Account Department, told Emirates Business.'With properties that are already being built, developers who have collected more than 20 per cent of the contract value from buyers will immediately have to stop asking for further payments until they correlate the escrow amounts already collected to construction progress.'Rera has set up an 11-member Real Estate Development Trust Account Department that will supervise and monitor the construction process and ensure the escrow amounts are collected in accordance with the agreed schedule.