An escrow account is that which acts as a third-party funding medium wherein the merchant receives access to the transferred money (by the buyer), once an escrow agreement has been fulfilled. If the agreement is not fulfilled by the merchant, the fund is then returned to the buyer.
In terms of the UAE real estate market, an escrow account serves a very specific function. The developers of the various projects have to open different escrow accounts for every project, as per the Escrow Account Law in UAE.
Opening an Escrow account has a lot of benefits, especially for buyers and investors. This law primarily is in the best interests of the real estate investors.
When purchasing an off-plan property in the UAE, always ensure that you get all the important and required details about the escrow account of the developer to which you will be making all the payments. The designated bank acts as a trustee to you, the buyer, as well as the developer. They are responsible for ensuring that your funds are put into good use, and only for the construction of the project. UAE has witnessed a massive growth in the real estate market, and the Escrow Account Law has aided the process.
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