The General Real Estate Authority explained the concept of the Guarantee Account and its role in protecting the funds of investors and buyers, in addition to clarifying its operating mechanism and the procedures governing deposit and disbursement operations, thereby ensuring that funds are directed toward their intended purposes and that project sustainability is achieved.

Escrow Account: Protection for Savings and a Guarantee of Completion
To ensure the sustainability of projects and protect the funds of shareholders and buyers, the system for the sale and lease of off-plan real estate projects prohibits the deposit of funds into developers“ personal accounts; instead, these funds are held exclusively in a ”Guarantee Account" subject to the supervision of the competent authority.

How the Escrow Account Works:
Project-Specific Deposit
The buyer is required to deposit payments directly into Escrow Account designated for the project (and not into the developer’s personal account).
Cash or personal checks may not be accepted outside the scope of this account.

Disbursement Based on Percentage of Completion
Funds remain held in the account and are disbursed to the developer only in regulated installments.
Disbursement is contingent upon the submission of a ”Certificate of Completion" approved by the engineering consultant, confirming the progress of work on-site.

Independent Financial Oversight
The account is subject to audit by a certified public accountant who submits periodic reports to the competent authority.
This mechanism ensures that funds are used solely for the actual construction costs of the project and not for any other purposes.