Dubai officials order seizure of Schon Properties' assets

Move to confiscate funds in company's escrow account is aimed at securing rights of all investors and parties

The Dubai Land Department (DLD) on Thursday ordered the seizure of assets of a major property developer based in the United Arab Emirates (UAE).

According to a statement issued by the Dubai Media Office, the DLD has seized the properties and land registered under Schon Properties, including the funds deposited in the company's escrow account.

The move is meant to secure the rights of all investors and parties concerned, while the authorities in Dubai will undertake legal procedures against the firm.

"The step is aimed at protecting the rights of investors in light of Schon Properties' actions of exploiting investors by refraining from depositing their money in escrow [guarantee] account," the DLD said in a statement.

Schon Properties has development projects spread over millions of square feet worth seven billion dirhams in its portfolio.

It also rolled out affordable housing projects in Dubai, targeting mid-market investors.

The DLD is also calling on all investors to put their money in escrow accounts and transfer payments to developers as per percentage of completion of the projects.

It said this is the only way "investors can preserve their money and ensure their rights are protected".

"Buyers are not advised to make payments to developers outside escrow accounts."

An escrow is used in transactions involving the purchase of a property. It is managed by a third party, which can be a bank, that takes care of all the money, funds and other assets related to a real estate deal while both the investor and seller finalise the transaction.