Dubai’s real estate authorities have decided to retain the status quo on the percentage developers should put up in escrow before launching off-plan sales. But there could still be significant differences between what developers used to put up earlier and what they have to do now.
In a statement issued Thursday, the Dubai Land Department said developers need to place in escrow 20 percent of the “total project value”. Developers until now had been used to putting up a bank guarantee of the “value of the construction”.
Clearly, there will be a marked increase in developer guarantees if the “project value” is enforced. Project value is much more than the sum of the costs related to construction.
Developers will be awaiting further clarification from the real estate authorities on what this might mean.
There is a strong demand from developers to “deposit the 20 percent escrow of the total value of the future projects they intend to launch”, the Land Department statement had added.
Dubai’s real estate authorities have decided to retain the status quo on the percentage developers should put up in escrow before launching off-plan sales. But there could still be significant differences between what developers used to put up earlier and what they have to do now.
In a statement issued Thursday, the Dubai Land Department said developers need to place in escrow 20 percent of the “total project value”. Developers until now had been used to putting up a bank guarantee of the “value of the construction”.
Clearly, there will be a marked increase in developer guarantees if the “project value” is enforced. Project value is much more than the sum of the costs related to construction.
Developers will be awaiting further clarification from the real estate authorities on what this might mean.
There is a strong demand from developers to “deposit the 20 percent escrow of the total value of the future projects they intend to launch”, the Land Department statement had added.
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