EXCLUSIVE: “You'll see a lot of cancellations in 2011” – RERA boss Bin Ghalaita

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(ITP Images)

(ITP Images)

Many construction projects in Dubai that look unlikely ever to be finished will be cancelled in 2011, CEO of RERA, Dubai’s real estate watchdog, Marwan bin Ghalaita has said.

Speaking exclusively to Arabian Business, bin Ghalaita said: “You will see a lot of cancellations [in 2011] for projects that have no benefit for Dubai or for the investor.... If a project is not feasible for Dubai’s economy, it will be cancelled. And owners will have the right to know it… Yes, there will be cancellations… If a project does not add to Dubai’s economy, it will be cancelled.”

Investors in failed projects in the emirate have long been desperate for RERA to issue official cancellations in order that they can have money deposited in trust or escrow accounts returned.

Bin Ghalaita said since the financial crisis had rocked Dubai’s real estate sector, RERA had cancelled 115 projects that existed only as architects’ drawings, but “less than ten” projects upon which construction had started.

He said RERA had spent 2010 assessing the health of the emirate’s real estate sector and was now ready to act:

“Now, the end of 2010, I have clear picture of all of the projects here in Dubai…. Now it is clear on my dashboard, to see what project will go ahead, which project is in ICU, which project is in the emergency room, which project is fine. And this is the way we will classify projects here in Dubai. Green, emergency, ICU, dead. This is the way we have worked for the whole of 2010.”

Asked why so few projects upon which work had started had been cancelled until now, bin Ghalaita said: “It is in the process. It is in the process of evaluating and cancelling. It is in the process. It is in the process of cancelling.”

He added that in some cases, especially those undertaken before escrow accounts were made mandatory by law at the end of 2007, considerations for the plight of investors made him reluctant to cancel a project.

He said: “Cancelling a project is easy for Marwan. But I always think about the investor, what are they going to do? Imagine yourself as a regulator, in this situation. Cancelling a project is going to be music to your ears, because cancelling projects means reducing supply. Reducing supply is good for the real estate market. So cancelling a project is my wish. But I don’t cancel for the sake of cancellation… What do I do, if I cancel. Where I will throw the problem? If I cancel a project that started? Where am I going to throw all the 500 investors? To the court.”

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Please post responsibly. Commenter Rules

Posted by: Srinivas

Dheeraj and EAST Coast have sold a property in May 2008, the Garden Heights in Jumeirah Village South without opening an escrow account. They had confirmed that financing for the project is by First Gulf Bank and ADCB. I had received a mortgage for a two bedroom apartment from First gulf bank. The bank held on to the mortgage loan offer for 6 months from May 2008 before finally cancelling it stating that because the developer failed to issue the purchase sales agreement on time and also that the developer still had not opened an escrow account. The developer was also de registered from the RERA website during this period. DEC finally opened the escrow account in January 2009 almost 9 months after selling me the property. I had invested my down payment only after receiving the mortgage loan offer from First gulf bank. Now the bank has also decided to stop financing this particular project. Please advice how to retrieve my money which is 10% that i had invested

Posted by: Mohammed

Dear Srinivas

Kindly contact me urgently on this mobile , 050-6789873 , I do have similar problem .

Thanks

Mohammed

Posted by: SM

Dear Mr.Marwan Bin Ghalaita,
Can you please stop the Remram Mizin Project which first of all is delayed by 1 year, on top of which Banks like RAK are fleecing us with interest charges on mortgages who have sold it to end users @ 100% premium & on top of that are charging us interest-Dubai market can bounce back if only the real estate sector can make some quick+smart decisions to provide justice to genuine end users like myself who have been caught in this maze which made millionares into billionares sadly!

Posted by: Mr D.

Myself and lots of other investors have invested in what we'd all consider a doomed project by UK Capital Investments called Metropolis Lofts.

UK Capital Investments have been telling investors that it's going ahead since the moment we invested in 2007/8 but no building, no updates worth noting and developer simply refusing to refund full amount.

Please consider Metropolis Lofts for cancellation as investors are desperate for refund after economic downturn yet developer appears not to care.

Posted by: Shalini

Mr D.,

Please contact me on s48070@gmail.com

Thanks!

Posted by: Hamid Fayyaz

Hello Mr.Marwan,
It would be much appreciated if the process and timelines of any refund of money from the escrow accounts of "to be cancelled projects in 2011" is clarified. This will really be very reassuring and encouraging for the affected investors for such projects which have not been started at all since 2008.
Thanks,
Hamid Fayyaz

Posted by: DunesTrouble

I bought a 1 bedroom flat in Dunes Residence, Dubai Sports City and paid 30 % of the amount before the official escrow came out.

In 2 years time there was no progress in construction. I filed for cancellation in Aug 2009 and the Dubai Dunes management gave to me an official letter with the promise to complete cancellation process in December 2009.

But they didn't. Within whole 2010 year they were assuring me that they are on the way to complete my cancellation.until I descovered myself at RERA that they never even submitted any documents to RERA. Also, I discovered that my name was not even on the list of clients for Dunes Residence project!!!

I explained this matter to many people in RERA, but they refuse to help me.

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