Regulator mandates escrow accounts for all off-plan property developments

In a landmark move to protect home buyers, the real estate regulator has issued a mandatory directive requiring all developers selling properties off-plan to hold buyer deposits in independently managed escrow accounts. The new regulation, which takes effect from the start of the next financial year, stipulates that funds can only be released to the developer upon certification of key construction milestones by a registered quantity surveyor. This decision comes after years of widespread complaints from buyers who lost millions to collapsed or perpetually stalled projects.

The directive aims to eliminate the rampant misuse of funds where developers would use deposits from one project to finance land purchase or marketing for another, leaving the original project underfunded. Under the new system, transparency is paramount; buyers will receive quarterly statements from the escrow agent detailing the project’s financial status and construction progress. Developers who fail to comply will face hefty fines and revocation of their licenses.

Industry reaction is mixed. Established developers with strong track records welcome the move, stating it will weed out unscrupulous players and restore much-needed confidence in the market. However, smaller developers argue that the strict cash-flow controls could slow down construction and increase project costs. For thousands of aspiring homeowners, this regulation represents a long-awaited safety net, ensuring their life savings are directly tied to visible progress on their future homes.