Uae (Escrow) Trust Account Law No 8 (2007)

Only available on StudyMode
  • Download(s) : 127
  • Published : June 4, 2010
Open Document
Text Preview

For the Law (8) of 2007

October, 2008

Second Version


Page Descriptions Serial
1 Index 1
2 Introduction 2
2 Definitions 3
3 Basic Concepts 4
4 Opening Trust Account 5
4-11 Trust Account Operation 6
12-14 Trust Account Records 7
15-16 Trust Account Reports 8
17 Trust Account Auditing 9
18 Closing Trust Account 10
18 Mechanism Amendments 11

2- Introduction

This Guide has been issued to assist trust agent and developer to establish, maintain and control the trust account and its recording system which should complies with the Law No. 8 of 2007.

These Regulations require setting the record of the trust account which shall shows the officers of the LAND DEPT and RERA the status of trust account.

3- Definitions

Trust Account: a bank account designated for a property development in which the amounts paid by buyers of units off the plan or the project financing parties will be deposited.

Developer: A natural or legal person licensed to carry on the activity of buying and selling properties for developing and that includes the master developer and sub-developer.

Purchaser: A natural or legal person purchased unit(s) off plan from a registered developer.

Trust Agent: A bank or financial institution certified by the Lands Department for the management of the Trust Account.

Project Revenue & Cost statement: Financial statement shows project details including cash inflows and outflows. (R/T/01) & (R/T/02).

Ongoing Project: Existing project where the selling of the units have already been done before opening trust account for this project.

New Project: Selling of units has been commenced after opening the trust account.

Trust Ledger: Standard form used to report the units sale prices and collections received from purchasers (R/T/04)

Order for payment form: Standard form used to release payments from the trust account. (R/T/03)

Assigned Engineer: A technical inspector appointed to certify percentage % of completion of project to developer.

3- Basic Concept

Money received from investor (Purchaser) by the registered developer or his representatives for sell-off plan for approved project will be considered as trust money under the law (8) of 2007 and these regulations.

There are a number of duties and responsibilities imposed on trust agents for the management of the trust account.

Monies received from Investor (Purchaser) must be deposited in trust account shall be given "Deposit Reference".

Monies shall be released from the Trust account in accordance with these regulations.

4- Opining and Activation of Trust Account

The developer must obtain a written approval from Trust Account Department at RERA before opening the trust account.

Trust agent must obtain a written approval from the Trust Account Department at RERA before activation of the trust account.

5- Trust Account Operation

5.1: Receiving Funds

5.1.1- Create the ledger The Trust Ledger (Form R/T/04) shall be opened in accordance with Approved forms of “Project Revenue & Cost “by RERA. Existing (ONGOING) projects (Form R/T/02): where sales commenced before the formation of the law, the developer shall direct the Purchasers to deposit the installments into the trust account.

Currently, no ongoing project will be accepted for registration by RERA, and fines will be imposed on non complied developers.

Trust Agent can accept any funds that have been transferred from the bank account of the developer. New Projects (Form R/T/01): installments should be deposited directly into the trust account.

5.1.2- It is the Trust Agent responsibility to comply with the Central bank procedures concerning (AML) forms.

5.1.3-Reference No: the Trust Agent shall give a reference No. to all and every installment before...
tracking img