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Tenants threaten legal action against Nakheel
by This email address is being protected from spam bots, you need Javascript enabled to view it on Monday, 22 June 2009Posted on Tuesday, 23 June 2009
My Sympathies
Posted by AVH at 23:15 UAE time
4 years ago, whenever I mentioned the possibility of being ripped off on service charges, chiller charges, visa charges, etc., people would look at me and shake their heads as if I was being excessively pessimistic though I was only being cautious. Today when I read about all this mess and the trouble you guys are in, I stand vindicated at having invested in property back home where at least nobody can say "leave if you don't like it"!!
I really do feel sorry for you guys. Anyway, good luck and don't ever give up easily.
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In the know?
Posted by Mart at 20:26 UAE time
So Mr "In the know"...
You signed a contract for the purchase of a property where you were obligated to pay a management charge, but there was no protection at all to ensure that the charge wasn't controlled in any way?
Did you really sign up to an obligation (management charge) without knowing what that obligation might be in the future? That's a little reckless don't you think?
That doesn't really sound like the actions of someone "in the know".
From my legal experience I know what contracts are for. They aren't there for when everything is going swimmingly. Contracts are there for when things go wrong, to protect one party from the other, to enforce limits on the actions of both parties.
Personally I was staggered that people would sign a contract that obligated them to pay service charge on property they were paying hundreds of thousands of dirhams for, without any control on what that might be. Similarly we were told that the terms (to buy freehold office) was 15% in advance, and then 10% per month until we'd paid 85%, the 15% balance was then due when we moved in.
These payments didn't become due when the developer hit certain landmarks - they just fell due each month... so we'd be faced with having paid 85% upfront, and perhaps still be looking at some wooden pegs and string marking out a plot in the desert. Not to mention no guarantee on what the service charge might be in the future. I wasn't prepared to sign on that basis - clearly many others did, and now they are whinging about how they've parted with lots of money and have nothing to show for it or how the service charge has risen above what they'd expected or what they consider fair.
A fool and his money are easily parted. Dubai was full of fools, many of them thought they were geniuses however whilst freehold prices were rising, and now they've realised they are actually fools for signing silly contracts, and they want to point the finger at everyone else but themselves. I don't have much sympathy I'm afraid... if people are silly enough to sign such one-sided contracts they'll likely get suckered again and again wherever in the world they move.
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Dear Mart
Posted by in the know at 19:25 UAE time
Dear Mart,
Your comment is fair. Let me tell you something, I have refused to pay for exactly the same reason and I'm still here to tell you about it. That's the first thing. Secondly, if you don't have the courage for that, take a group action that proposes to pay only what equates to the service that you are in actual fact receiving. Calculate what that is in open discussion with your fellow residents, taking quotes from Nakheel, other management companies and so on, and follow that path.
You have many options.
Proposing to dump properties on to a market that where nothing is being bought and where owners prefer to owner-occupy rather than accept a capital value loss for the sake of 'teaching Dubai a lesson' as I believe you suggested, is not really a sensible course of action now is it?
Good luck, you seem like the type of guy who doesn't know friend from foe, so I sincerely mean it.
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Good advice
Posted by Mart at 18:15 UAE time
"REFUSE TO PAY - if your services aren't being provided, simply don't pay. Join a collective action like the one reported by the article, and together take a stance."
Good advice - we know what happens to debtors in Dubai.
They get sent to prison.
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Reply to Michael
Posted by Mart at 18:02 UAE time
"Mart, that is a very childish response and does not solve anything. You would have a very different opinion if you were one of the people that invested here but based on your immature response I am guessing you are too young to have had the capital to buy! Grow up Mart."
But I wouldn't be one of the people who invested, because I'm not silly enough to buy under a contract that gives me no rights against the managing agent putting up the service charge.
You are incorrect in your assumptions. I own a business in the freezone in Dubai and one in the UK.
I looked seriously at buying property in Dubai - cash, no mortgage. But I came from a legal background, and when I looked into the provisions of purchases, they filled me with horror. Your managing agent can put up the service charge as much as they like, and there is nothing you can do about it. The managing agent isn't breaching any contractual terms because there are none that guarantee you that the managing agent won't do this.
So if you signed a contract on that basis, more fool you. I wasn't prepared to buy on that basis. Obviously you were.
There is a lesson to be learned - don't sign silly contracts just because the real estate man with the nice suit tells you you'll make a fortune and its all perfectly safe.
When I opened my freezone business I *was* given guarantees - 50 year tax holiday, free uncensored internet. But I was given no guarantee as to fees and rents in the future. I know that if DIC suddenly put up the rent to silly levels, or charge crippling amounts for internet access I can just close up and run to the next low tax jurisdiction - so I decided it was worth the risk. I would however not tie up large amounts of capital in Dubai (eg in real estate) because as a foreigner here you have no protection - as you've just discovered.
I'd happily buy in New York or London (subject to a good contract), because I know there the legal system will protect me. But Dubai doesn't offer those protections, so property should be priced accordingly to take account of the massive risk of owning in a market where the rules change at a whim, and where your managing agent can put up fees as much as he likes.
And even if you do have protection in a Dubai contract - do you really fancy taking a state-run/owned company through the Dubai courts system? I wouldn't.
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there is a very simple solution
Posted by in the know at 17:24 UAE time
people, i've read all of your comments, some in legible english, and some not. For those of you who can't construct a sentence in english, let alone make a point in it, find a website that offers you this post but in your language of competence.
For those of you that want to do something about this problem, whether at the Discovery Gardens, International City or anywhere in Dubai, it's simple.
REFUSE TO PAY - if your services aren't being provided, simply don't pay. Join a collective action like the one reported by the article, and together take a stance.
Good luck, (ps i'm having my own such problems but not at DG so I do empathise).
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Free Hold Property Maintainence Charges
Posted by Tajer at 16:33 UAE time
I believe this problem exist not only with Nakheel but Emaar and other builders. I live in Old town where the rate of Maintainece including cooling charges as per contract is AED 14 per Sft.
On the time of Handover the charges were increased to AED 29 per Sq ft and then furthur supplement chrges were levied to increase it to AED 36 per Sq ft .
Emarr has not provided any details of the service charges for the last 2 years and have neither provided any details on the basis of how they calculate the charges .
With 60 Apartments per building or over 100,000 Sqft per building
it can not cost Emarr 3.6 Million AED to service a new building with minimum green Area .
It is clear that a new law is required imediatly and urguntly which provides clarity and transparancy to service and Maint charges including the possibility that private Facality Management companies are allowed to bid for the Maintainece .
If Dubai wants to see stabality in the property sector and as a whole then the people incharge will need to protect the interest of both sides including provision of taking the Builders to task as they are the ones who carry more blame for what is happening currently in Dubai.
I hope Dubai will be remembered in the next years as a country which knows how to reform rather then a House of Cards.
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what are you complaining about
Posted by Michael at 16:17 UAE time
Mart, that is a very childish response and does not solve anything. You would have a very different opinion if you were one of the people that invested here but based on your immature response I am guessing you are too young to have had the capital to buy! Grow up Mart...
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what are you all complaining about?
Posted by Mart at 15:16 UAE time
Folks, as some of the other posters here would say "if you don't like it, go home".
If you took the decision to buy property in a market that has no established history of land law, where the managing agent can make up whatever service charge he likes, and you have to pay it, then what do you have to complain about? No one forced you to buy!
These are issues you should have considered when you chose to buy property in Dubai. Sure this would never be allowed in London or New York. But this isn't New York - its Dubai. Your managing agents can set whatever price they like, and you have to pay it. That's how it works here, that is what you signed up for.
If you don't like that you should have bought in New York or London. This is why property prices in Dubai should never be compared with London or New York - in those places you'll have some legal protections - here you have none. You should have factored that into the price before paying silly money for these properties.
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Problems
Posted by DR Whiteford at 12:09 UAE time
We have had numerous problems over the last 4 months. 3-4 less serious leaks and drainage issues and 1 large health hazardous issue where our whole bathroom ceiling lay open for a month (due to broken ceiling tiles from a leak above). We needed to move out for this period due to breathing difficulties, itchy red eyes and headaches. NAM was pathetic during this period and nothing waas treated with a sense of urgency.
Having said this - the service charges are a joke & definately not in any way equated to the services they provide.
If there is any petition that is being signed, please post it/contact me and I will sign it.
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How can i join this petition?
Posted by J at 11:53 UAE time
Dear friends,
The service charges imposed by Nakheel is one of the most ridiculous things ive seen in my life. it is laughable and i'd really like to know whether these people think they are smart or what?
my friends i'm very interested in signing this petition and i know all the tenants in my building who will agree to join in as well.
if there are other approaches anyone has for suggestion that we can take in order to cut down these outrageous charges, plz mention here and you guys can count me in.
regards
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International City owners are with you......
Posted by MAX at 11:18 UAE time
Nakheel's service charges are daylight robbery!! not only in DG but also in other developments such as International City(IC). I am paying around AED12/sq.ft for a 1B/R flat in IC. There is no swimming pool, no childrens play area, no greenery. Some trees/lawn planted last year but no maintainence at all. trees all dried off. Lawn is grown now more than 3ft in hight no maitainence at all. Sewage from buildings is leaking and nobody is bothered to fix it. IC has become an labour accomodation. All labourers no families. In our building there is no corridor light, staircase lights, no security. I have complained so many times but in vain. All calls on dumb ears! When it comes to collect money as service charge there are forefront but to offer service nobody is there.
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All the best if you have purchased prpperty in UAE
Posted by rayomand at 11:12 UAE time
Thats the fact. All these reputed builders are doing to their tenants. Even after paying this amount you are not sure when they will again increase it or come out with another charge.
Moral of story, never buy property in UAE even if it is from reputed builder
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Contact
Posted by Sutter Kane at 10:35 UAE time
Ra, you can send and email to discoverygardens@hotmail.com they have a mail group. There is also a facebook group called I bought a proprty from discovery gardens and I was ripped off. You can follow the updates from there as well
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Sell it to WHOM
Posted by A_A_K at 10:24 UAE time
Hi Saiyed,
I like your suggestion but please tell me to WHOM should we sell our units to?
Where do we DUMP our properties?
Cheers
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