Dubai homeowners are planning to launch a legal
campaign against Nakheel after they were forced to scrap extension plans to
their luxury villas after the master developer increased its application fees
by up to 233 percent.
Under the terms and conditions laid out in
Nakheel’s ‘Guidelines and Procedures for Villa Extension Applications’,
residents are required to pay an application fee as part of the approval
process before they can start construction.
Previously, the fees ranged from AED150 ($40) per
square foot in Jumeirah Village and Al Furjan, to AED200/square foot in
Jumeirah Park, AED300/square foot in Jumeirah Island and up to AED600/square
foot in Palm Jumeirah.
However, residents in September were informed that
the government-owned developer had increased the fees by up to 233 percent,
effective immediately, and any applicants whose paperwork had expired would be
required to reapply under the new terms and conditions and pay the higher fees.
In Jumeirah Village rates increased from AED150 to
AED380 per square foot, an increase of 153 percent. This means that any
residents looking to add an extension of around 1,000 square foot will be
required to pay Nakheel a fee of AED380,000, on top of the construction and
utility costs, which averages at around AED400,000. As a result of the surge in
fees, many disgruntled residents have been forced to scrap their plans.
“This means that for an extension of 1,000 square
foot you will end up paying over $100,000 to Nakheel. For what? We have been
told that the decision came from the board and that they took it overnight and
it was effective immediately,” a Jumeirah Village resident told Arabian
Business.
In Palm Jumeirah, Nakheel’s flagship manmade island
project, the increases have been even steeper, increasing from AED600 to
AED2000 per square foot, an increase of 233 percent. This puts the fee for a
1,000 square foot extension at over half a million dollars, even before a single
brick of construction has been paid for.
As a result of the surge in charges, many
disgruntled residents were forced to scrap their plans. Some residents at
Jumeirah Village also have launched a petition calling for the fees to be
scrapped altogether. Walter Candelu, a representative for the group, told
Arabian Business homeowners now plan to launch legal action and are currently
consulting with lawyers to prepare a case against Nakheel. They claim that the
increase in fees has negatively impacted the value of their properties.
“Nakheel’s propaganda, when we all bought the
properties, was that major extensions up to three additional bedrooms were
allowed thanks to the big plot area… All of us are obviously now
reconsidering the possibility of extending our villas. We feel our rights [have
been] completely ignored and trampled on… We feel deprived of our rights of
ownership,” one resident told Arabian Business.
Candelu also confirmed that the group had met with
Marwan Bin Ghalita, CEO of the Real Estate Regulatory Authority (RERA), to
discuss the issue. “We have shown him the petitions related to the fees
but, unfortunately, RERA cannot control the regulations of the development,”
Candelu said.
The group also confirmed plans to draft a letter to
Dubai Ruler Sheikh Mohammed bin Rashid Al Maktoum, as part of its bid to
generate awareness about the fee increases.
The fees charged by Nakheel are in stark contrast
to rival Emaar Properties, the developer behind the Burj Khalifa, the world’s tallest building. It states in the terms and conditions of its ‘Alternations
& Home Improvement Fact Sheet’ that, in addition to submitting the standard
paperwork, homeowners are only required to pay a refundable deposit of AED5000
to cover any damages to common areas and a flat fee of AED2000 per application.
The residents Arabian Business spoke to said about
60 to 70 homeowners planning extensions to their properties in Nakheel
developments had been impacted and had been forced to downsize or reconsider
their plans as a result of the surge in fees.
Candelu confirmed representatives from the
residents group had met with Nakheel to discuss the fees, and the need for
community maintenance work to be completed at Jumeirah Village.
They have also compiled a petition highlighting the
lack of work at the development, covering items such as signage to landscaping
and security, and calling for work to be urgently completed in line with what
was expected when they bought the properties. Around 327 residents have so far
signed this petition.
* Nakheel no longer responds to media enquiries
from Arabian Business, nor does it grant Arabian Business access to any of its
media events or announcements.
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