The Dubai Land Department (DLD) says it will seize the properties and land plots and funds deposited in the Escrow account registered to local developer Schoen Properties.

The decision has been taken until the Dubai Public Prosecution and Dubai Courts complete legal procedures for the recovery of all investor rights and securing the rights of other parties.

The DLD says it took the action to safeguard the rights of investors in light of Schoen Properties’ exploitation of investors: they refrained from depositing investors' money in their protected Escrow accounts.

According to regional projects tracker MEED Projects, Schoen Properties has $673m of projects in Dubai. Some 79 per cent of those schemes are cancelled and the remaining 21 per cent are completed.

Dubai’s real estate sector has been increasingly challenged in recent years as both sales prices and rental rates continue to fall. The tough market conditions are expected to prevail as new supply is delivered to the market without a corresponding upward shift in demand.