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National Bank of Abu Dhabi (NBAD (signed an agreement with Abu Dhabi’s Department of Municipal Affairs (DMA) granting the bank a licence to open escrow accounts for developers of off-plan property projects in Abu Dhabi.
Since the promulgation of Abu Dhabi’s new Property Law – No. (3) of 2015, that took effect in January this year, the DMA has become Abu Dhabi’s new property regulator. All projects and off-plan sales across the Abu Dhabi emirate will now be registered on a centralised database. Under the new regulation, developers selling off-plan units in Abu Dhabi or units that have not reached 70% completion will be required to set up an escrow account for the project. The proceeds from off-plan sales will be paid into this account and taken out in stages exclusively to fund the project’s development.
Only banks that have signed an agreement with the DMA will be allowed to hold such Escrow accounts.
Mark Yassin NBAD’s Co-Head of Wholesale Banking and Senior Managing Director of Global Banking said: “We are very excited to comply with this new Property Law that will provide security, stability and transparency in the market, increasing investors’ confidence. By holding Escrow accounts NBAD supports Abu Dhabi’s property sector and economic vision. We look forward to working with all the developers under the new legal environment and provide new opportunities for our customers.”
Ramana Kumar, NBAD’s Head of Global Transaction Banking Business & Product Management said: “The law requires those working in this sector to meet high professional standards. NBAD has a proven track record in providing escrow services. The escrow mechanism complements and brings together NBAD’s strong proposition across Government Relationships, Real Estate and Retail for the benefit of all stakeholders”
NBAD’s dedicated team under the umbrella of Global Transaction Banking is led by M.V. Varkey, Director of Escrow Management and James Thomson, Associate Director of Escrow Management.
The DMA’s new responsibilities include implementing the law, issuing licences, controlling escrow accounts and cancelling real estate projects. The law also includes provisions regulating property development, buying, registration, brokerage, assessment, fees, security mortgage and joint-ownership management.