Nakheel to take legal action over project delays

LEGAL ACTION: O’Donnell said Nakheel has introduced a clause into all its sales contracts to stamp out late delivery of projects.

Dubai master developer Nakheel will take legal action against any sub developer that fails to deliver projects on time, the company's CEO told ArabianBusiness.com on Tuesday.

Speaking at the Arabian Travel Market (ATM) in Dubai, Chris O’Donnell said Nakheel has introduced a clause into all its sales contracts to stamp out late delivery of projects.

“Nakheel sales contracts will now include definite timeframes on the development of the land we sell, if projects aren’t commenced within that certain time frame, we take action against that developer. That’s something we have been focused on that for the last 18 months,” he said in an interview.

O’Donnell's remarks follow news that Dubai's real estate watchdog is investigating four developers for what appears to be the non-delivery of projects.

RELATED: Four developers under investigation

Real Estate Regulatory Agency (Rera) CEO Marwan bin Ghalita said on Monday the firms were being subjected to an "internal audit of transactions”, stating that "we cannot let people promise and not deliver in Dubai”.

He did not reveal which companies were being investigated.

O’Donnell said praised Rera's efforts and encouraged the watchdog to ramp up its probe to sure up investor confidence in the market, which has been shaken in the last few months with the Damac Properties saga and ongoing investigation of Deyaar's former CEO.

RELATED: Deyaar CEO detained, faces investigation

“I think that’s great, I think they [Rera] should investigate more. It’s very important international and local investors have confidence there is a local government body with teeth and who will take action," he said.

“It’s important for them [Rera] to take action, and been seen to take action."

Nakheel was involved in resolving the depute between Damac and investors after the developer in April cancelled its Palm Springs project on the Palm Jebel Ali five years after launch. Infuriated investors were threatening legal action until Damac reversed its decision.

RELATED: Damac will continue Palm Springs project, says chairman

“We were involved with the Damac resolution, it was an unfortunate turn of events but I think it was a right outcome. The customers are getting what promised, Rera intervened and that’s very positive," O’Donnell said.

O’Donnell said he was not worried there were more Dubai non-delivery scenarios in the future because the government had proved it would take a stand against such action.

“I think it's sent a very strong message to anyone who is thinking of taking that path, don’t do it because you won’t get away with it."

O’Donnell would not be drawn on the height of its 'Tall Tower' project, which could eclipse Emaar Properties' Burj Dubai.

A source at Australian architects Woods Bagot told ArabianBusiness.com last month the project, also known as Al Burj, would be 1,200 metres high and located on the Arabian Canal, a $61 billion project being developed by Limitless.

RELATED: Nakheel trumps Emaar with 1,200m tower

“We will be building a significant building, but it doesn’t have to be the tallest in the world. It will be iconic like the Sydney Opera House - but taller than that," O’Donnell said.

Talking about the soaring prices of construction materials due to a supply crunch and the rising cost of imports, O’Donnell said the local market was "over the worst".

However, he said Dubai was running at its "peak construction period" and issues with delays due to supply problems would continue to be a feature of the local market.

“My advice to investors [regarding construction supply problems] is to invest in financially stable developers who have a proven track record of delivering projects," he warned.

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READERS' COMMENTS

Can anyone shed any light on Hanover Square, JVS?
Posted by Del, London, England on Wednesday 25 June 2008 at 22:44 UAE time

I think this maybe another project that is subject to delays. I don't mind the delays, at the end of the day I am looking at the next few years, but I would like to know the reasons behind any delays - can anyone shed any light?

Nakheel Delays
Posted by matthewwuillemin on Thursday 8 May 2008 at 21:40 UAE time


totally agree with the last comment about nakheel delays! Same thing with my ITC apartment - 14 month delay to handover. Also another project in the JVC has been delayed by 6 months - but the developer said it was because of the delay in getting plans thru the nakheel bureacracy.. which given their past record is probably the truth. It is in the developers interest to get the projects up and running ASAP as they dont get paid generally until they achieve certain milestones... Yes - pick up your own act nakheel before pointing the finger!

Nakheel to take legal action over project delays.
Posted by Nazir Bhatri, Dubai, UAE on Thursday 8 May 2008 at 14:22 UAE time


Have booked 2 studios at the Discovery Gardens. Will someone at Nakheel tell us when will possesion be given, and what legal action is being taken for the delays already occured.

buyers should have the opportunity to take action over any projects delays
Posted by hella.g, dubai, uae on Wednesday 7 May 2008 at 12:52 UAE time


agree!!!!
we should have the opportunity to take also action against any developer who did not deliver any project on time
I have bought an apartment in Dubai Sport city, and I have just been advised that it has been delayed to MID 2009 instead october 2008
such a shame

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