Saturday, August 18, 2007

Foreign developers should submit a series of documents for setting up Real Estate Trust Accounts

A major loop hole that had been pointed out in the new law on Escrow accounts, has now been clarified by the Dubai Land Department.

The department officials have announced that "a special arrangement" has been made to permit foreign developers registered as offshore companies, to develop trust (Escrow) accounts that were introduced last month to safeguard the payments of the investors.

According to the conditions pertaining to Law No.8, mentioned that for setting up Real Estate Development Trust Accounts, the developers who wish to set accounts, are required to submit certain documents along with a trade license. Thereafter, various legal experts pointed out that the licenses for land transactions in Dubai, have been so far granted only to GCC or UAE nationals by Dubai Economic Department (DED), while the freezone companies are issued documents by the freezone authority. This actually indicates that the foreign companies with a title deed to own a plot of land will have to go through 'local' companies, to obtain the appropriate license for building developments on the plots.

The Dubai Land Department has now announced the submission of the following documents for setting up escrow accounts by offshore companies in Dubai.

An official certificate issued by a competent authority in the country, in which the company has been registered. The certificate will imply that the company is registered and incorporated in that country, the legal status of the company and the capital amount.

  • Original certificate of property ownership contract.
  • The competent administrative authority in the company should issue a copy of decision concerning the sale/purchase of the property, along with authorization issued to the nominee/agent in this regard.
  • A Power of Attorney, authenticated, authorizing the representative of the company to sell or purchase the property and to register the same at the department in the name of the company.
  • The list of partners/incorporators, names of managers and addresses to be submitted.
  • A certification of the name and address of the approved agent in the country.

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