Quote:
Originally Posted by Roshan
RERA approval and ESCROW account number are two different things and are easily confused. Developers take advantage of that.
The best way to approach this is to ask the developer 2 things.
1) Pls give me your RERA approval number.
2 ) Pls give me your trust account number. Pls cross check if it's for that project.
As a test, let me send this to RERA and see whether they reply to this.
Regards
Roshan
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Dear All,
Only projects being sold off-plans are required to have an escrow account. The Escrow account is held by the trust bank and money that goes into the account will not be dispensed unless construction progress is maintained per approved programme to reach certain construction milestones.
The banks are currently 'supposidly' are checking the construction progress but that is a very very grey area.
Money that goes into the Escrow account for projects being sold off plans can come from the sales of units and/or any bridging loan obtained by the developer for the purpose of constructing the project and/or any capital funds by the developer budgeted for the purpose of constructing the project.
There are projects being sold off-plans that do not require Escrow account and they either have a full bank gurantee against its construction and/or are too advanced in the construction (over 60%) that it is in the best interest of the developer to complete the project.
Thus, the number of approved projects will always out-weigh the number of escrow accounts.
Now, there are still some developers who ignore the escrow rule (I believe even Emaar and Nakheel do or they are some how exempted) but it is absoulotly required by RERA and you can always call-into RERA and infor me them if you believe any dodgy business is going on.
Hope this helps,
Regards,
An Insider