Nakheel chief slams service fee dodgers

Acting CEO Sanjay Manchanda says Palm Shoreline defaulters are damaging Dubai's reputation

Shoreline apartments, Palm Jumeirah

Shoreline apartments, Palm Jumeirah

Master developer Nakheel has said that owners who are withholding service charges at its Shoreline Residences on Palm Jumeirah are not only flouting the law, but also damaging Dubai’s reputation.

“It is important for everyone to play their part. While the owners have rights, they also have certain obligations,” said Nakheel acting CEO Sanjay Manchanda at a media round table, Construction Week Online reported.

“As a service provider, as a developer, I have a responsibility not only towards the community, but also towards the population of the country. If I do not clean the beaches, if I do not provide the necessary inputs into those beaches, the water quality, there will be no beaches.”

Nakheel has been embroiled in a months-long row over service fees and access to the beach, pool and gym facilities at Shoreline Residences.

It threatened to ban residents with unpaid service fees from using the communal facilities. RERA has since commented that Nakheel cannot prevent residents from accessing the beaches.

A bone of contention has been tenants who have paid their rent, but owners who in turn have not paid over the service charges in question to Nakheel.

Manchanda said Nakheel had procured documentary evidence of illegal sub-leasing at Shoreline Apartments.

“I can say this with confidence, we have produced documents, that in Shoreline you have people doing things that are not in accordance with the law.

“According to the law, an annual lease is the only document which is recognised... People are doing short-term leases, and these people are being sold certain services at a certain price without them knowing what has actually happened.

“They get infuriated when they confront us and ask why they are being denied access. If your owner has not paid the service charges, how can you even access those services?

"Secondly, it is for residents, not for people that just come in... If Nakheel allows that, it will be a disservice to some of the owners. It is an owner behaviour we are trying to highlight … There are people who are not in compliance with the law.”

Manchanda added: “We cannot allow these things to continue. What we did was a soft approach to get our collections. If we had not done this, can you imagine. I would have had to continue to provide sums of money which I have borrowed at a cost to run these communities. I am sure all of you would be saying to me that is a bad business decision.

“So I think it is very important to realise we continue to provide a transparent and objective service to everyone ... Post-restructuring, Nakheel is the only developer who has no company or any interest in providing any of these services. We do not own any security or MEP companies. We are very focused on what we want to do, which is develop.

"Among the larger community of Palm Jumeirah, there has not been anybody else who has voiced any statement about the quality of services and service charges.

"Shoreline Residences has had unfortunate incidents, and I am confident we will work with residents and restore calm and peace. As such, people have been very happy with the measures we have introduced,” said Manchanda.

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Posted by: Kelly P

I am stunned at the audacity of Mr. Manchanda. How on earth can Nakheel justify banning tenants from pools and gyms (tenants who paid rent in one instalment many months ago) because the owners, many who reside overseas, have not paid service charges? This issue has made global headlines and the damage this has done to Dubai's reputation is immeasurable.

Posted by: ssdubai

the CFO is a bit rich in comments, what does he have to say about Nakheel's debt- surely he was heavily involved in all those bad losses which rocked the whole of Dubai.

Posted by: fahim

Not sure whats happening with Nakheel but its not good.
Jebal Ali Gardens residents have had their cooling charges upped by over 100% overnight.
This is unheard of anywhere in the world

Posted by: Mervie

Nakheel is hilarious to make such claims. I emailed Nakheel over charges and never received a response. I made a payment months ago yet the customer log shows a receipt issued and cancelled on same day, then 3 months of late fees and FINALLY a receipt issued 5 months after my payment! Also, they want owners to pay for club house fees for the last 6 months of 2011 even though they've prevented those same owners from accessing the facilities unless they paid a separate charge as well.

Posted by: matt

One of the posters below asked the valid question what is the per sq ft Nakheel service charge in the Palm Shoreline Apartments. We have asked friends and the answer seems to be that "it depends on how hard you argue with Nakheel". In our case, last year our service charge suddenly jumped from about Dh13/sq ft to Dh25/sq ft. We disputed this increase but got nowhere, and were banned from all the facilities and threatened with being blocked from our carparking and eventually our apartment. After about 50-80 individual attempts over 3 months to resolve this matter with Nakheel "Customer Service"(!) and finally threats of legal action against Nakheel, they suddenly "found" the error in our bills and reduced the bill back to Dh 15/sq ft, and so we paid it.

But we have several friends who did not have the huge time required to fight the Nakheel machine, and just paid the hiked rates to avoid being banned from everything.

I dread this year's fight with Nakheel over increases.

Posted by: ALA

Matt, I do not know how you managed to pay only AED15/sqft, I am charged at AED25/sqft in total.

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