Real Estate Bill proposes regulator and escrow protection for property buyers

A new bill submitted to Parliament proposes establishing a dedicated regulatory framework for the Maldives’ real estate sector, including registration and licensing requirements and new safeguards for buyers purchasing properties before construction is completed.

The Government-sponsored Real Estate Development Bill was submitted to Parliament on Monday and is sponsored by North Henveyru MP Ahmed Aifan.

Under the proposed framework, a dedicated regulatory authority would oversee real estate activities, register developers and real estate agents, and maintain property records.

Developers would be required to register projects before advertising or offering properties for sale.

The bill also proposes protections for buyers purchasing properties off-plan. Payments made towards such properties would have to be deposited into dedicated project escrow accounts at banks in the Maldives, with developers permitted to access the funds in proportion to construction progress.

Five per cent of the funds would remain in the escrow account for one year after completion of the project and registration of the property in the buyer’s name.

Buyers purchasing properties before completion would also receive provisional registration and would be entitled to information relating to construction progress and the relevant escrow account.

The bill additionally proposes a separate framework for large-scale integrated real estate development zones.

Such developments would be required to cover at least 200 hectares and involve a minimum investment of USD 1 billion.

Under the proposed framework, land within such zones could be leased for up to 99 years. Properties within the zones could also be transferred through 99-year leasehold arrangements under a surrender-and-regrant model.

The proposed rules would also restrict investors from any single country from collectively acquiring more than 25% of properties within a designated zone.

President Dr Mohamed Muizzu said on Monday that the framework would also prioritise opportunities for Maldivian businesses and employment of Maldivians in major developments.

The Real Estate Development Bill remains under consideration by Parliament.