A new department has been established by Dubai's Real Estate Regulatory Agency (Rera) to oversee the collection of payments to developers that are tied to construction progress.
The Real Estate Development Trust Account Department will ensure funds are collected in line with contractual arrangements.
The department was formed to enforce a new rule banning developers from collecting more than 20% of the cost of a property before construction begins.
The rule, which came into force on January 1, is designed to restore investor confidence following a damaging end to 2008.
Confidence among buyers has been rocked by a series of project delays resulting from the onset of the global recession, and contractual disputes.
In a further move to restore investor confidence, developers in Dubai are to receive a ranking from Rera related to market experience and financial stability.
According to Rera CEO Marwan bin Ghalita, some 25 developers have been forced to cancel projects due to the credit crunch.For all the latest construction news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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