The “Farida” application obliges real estate developers to apply the “warranty account” to protect the rights of buyers – ryan

The “Farida” real estate technology platform announced the requirement of the implementation of the “ESCROW Account” system to all real estate developers as one of the basic conditions for offering their projects through the platform, before this system became mandatory under the law.

What is the warranty account? And why is it a basic tool to protect customer money?

The guarantee account is defined as a bank account that opens at a neutral third party – often a bank or a licensed financial authority – in which the funds of a specific deal or project are frozen, and the developer or seller is not paid until after specific conditions stipulated in the contract are fulfilled, such as the project reaching certain implementation rates.

This system aims to protect the rights of all parties:
• The buyer or investor guarantees that his money will only be used in the implementation of the project in which he invested.
• The developer guarantees that he will receive his dues automatically once he fulfills his obligations.

The warranty account is used globally in real estate development projects, major acquisitions, and cross -border contracts, as it has become one of the basic standards in markets such as Dubai, Singapore and London. In Egypt, modern platforms such as “Farida” began to adopt the system voluntarily, in line with the new trend towards organizing the real estate market and stimulating institutional investment.

The first institutional application for the warranty account in Egypt

Ahmed Saqr, the founder and CEO of the platform, said that “Farida” decided to apply this system voluntarily from the conviction that the protection of customer money is the primary guarantor of the sustainability of confidence between the investor and the developer, noting that the platform was inspired by this step from the experiences of mature markets, as the warranty account became one of the main pillars in organizing the sales market on the map globally.

Saqr stressed that “this is the first time that the warranty calculation system has been applied in this institutional form in the Egyptian real estate market,” considering that it is a model that enhances transparency and prevents the direction of customer money for any uses outside the project implementation.

“Farida” .. promising digital real estate platform

The “Farida” platform was established with the aim of creating a qualitative shift in real estate trading through technology, and it succeeded in a short period in achieving remarkable results, most notably the sale of a property worth half a billion pounds in just two hours, half of which is in the first ten minutes of offering, which reflects the confidence of investors in the mechanisms of the new platform.

The platform also obtained official licenses from the regulatory authorities after the issuance of the law regulating the participatory property from the Financial Supervision Authority, to provide real estate promotion services, receive funds, submit subscriptions, and circulate documents electronically, which paves the way to launch the first smart real estate exchange in Egypt during the coming period.

A new stage of transparency in real estate financing

The ESCROW Account via the “Saqr Real Estate” fund is a fundamental transformation in the method of financing and trading real estate within the Egyptian market. Instead of relying on traditional systems that lack control over the flow of funds, this system enables to separate buyers ’money from developers until the actual implementation rates are achieved, ensuring the use of funds for the purpose allocated to them only.

Read also .. a “Farida” platform applying for the first license for a real estate fund in Egypt

This institutional application is the first of its kind within the local market, and it establishes a more mature and transparent stage, which enhances the confidence of investors, and provides a safer environment for purchase, especially in light of the increasing interest of Egyptians abroad and foreign investors in entering the Egyptian real estate market. It also paves the way for the official legislation to generalize the warranty accounts, similar to what is applied in global cities, which is close to Egypt’s advanced real estate markets..