Developer demands AED500 a day from defaulting investors in flagship project.
Abu Dhabi developer Hydra Properties has started to issue repossession notices to investors in its flagship project who have failed to maintain payments on their properties.
Letters have been sent to investors in the $545m Hydra Village project, which has been dogged by controversy over imposed price hikes on properties, construction delays and masterplan changes.
Launched in 2006 and originally scheduled for completion in 2009, the residential community is now slated for delivery in 2011.
In response to the delays, some investors refused to honour their original payment plans, and have now been hit with a letter outlining Hydra’s “unfettered right” over the unfinished units.
“The Reservation Deposit and any & all Installments paid by you, if any, are deemed forfeited in favor of the [sic] Hydra Properties,” the letter reads, reserving the right of Hydra to re-sell any seized property.
“The Unit allotment… stands cancelled and the Hydra Properties shall has [sic] the absolute and unfettered right over the said Unit – including but not limited to – re-sale of the said Unit to any third party,” it says.
In addition, defaulting investors are liable for a charge of AED500 ($136) per unit per day since they first defaulted, according to the developer, which insists the project is on schedule for completion in 2011.
“A penalty of AED500 per day per Unit has been accruing against you in favor of the Hydra Properties effective from the Date of Default till the date of payment,” it says.
The letter says that Hydra has made “numerous attempts” to contact defaulting investors, and that the investors’ failure to settle their outstanding dues has caused the developer “severe financial hardship”.
When contacted by Arabian Business, a spokesman for Hydra said no-one at the company was immediately available for comment. [Please note we are not accepting reader comments on this article]