Ajman escrow account agreement signed

From now on, investors' monies can only be used for construction of the project for which they paid.

The newly established Ajman Real Estate Regulatory Agency (ARRA) has signed an agreement with the Ajman Bank to accept obligatory escrow payments from developers, officials said on Tuesday. The escrow requirement, already in place in Dubai, requires developers to place all monies from investors into an account that can only be used for construction of the designated project. "It is the first agreement that we have signed for an escrow account so far," Omar al Barguthi, the director general of ARRA said. At least 900 projects have been planned in the emirate, and many have sold off-plan units to buyers. Developers of these projects will now have to transfer deposits to escrow accounts. Without an account, developers will be refused registration and a licence to build from ARRA. "We have already 22 registrations awaiting and from tomorrow, we will be ready to open all accounts, said Yousif Saleh Khalaf, the chief executive of Ajman Bank. The bank was expecting up to 50 developers to open escrow accounts within the next six months. The bank is owned 25 per cent by the Government of Ajman and is 55 per cent public, on the Dubai bourse. [e-mail]