Nakheel fees row reaches Ruler's Court

By Joanne Bladd

Monday, 24 August 2009 12:53 PM

Angry residents of Dubai’s Discovery Gardens are set to take their row to the Ruler’s Court this week in a bid to force developer Nakheel into slashing “exorbitant” service charge fees.

More than 90 tenants and homeowners have signed a petition, set to be presented to the Ruler’s Court and Dubai’s Real Estate Regulatory Authority (RERA) later this week, which asks the government to force Nakheel back to the negotiating table to review the charges, which cover building maintenance, community and cooling fees.

Residents are due to pay the first installment of next year’s fees on October 1.

“We want the government to freeze our payments to Nakheel and to force Nakheel to justify its charges in light of the substantial drop in costs we’ve seen since last year,” said Michael Aldendorff, the head of an unofficial resident’s association.

“We will not accept the current fees when Nakheel has failed to deliver on common areas and we have substandard building maintenance. As the petition says, we flatly refuse to pay.”

According to paperwork issued by Nakheel to residents, RERA has approved maximum service fees of AED10.35 per sq ft in building maintenance, AED2.8 per sq ft in community charges, and AED8.7 per sq ft in cooling charges: a total of AED21.85 per sq ft.

Residents in 1,000sq ft flats would then pay annual service fees of AED21,850 ($5,948).

According to Aldendorff, tenants in Dubai Marina typically pay about AED15 per sq ft in service charges, while those in The Greens pay between AED13-15.

“You can understand our concerns and skepticism that these [Discovery Gardens] rates are not in line with the market and are excessive,” he said.

In June, following protests by residents, Nakheel said it would reduce the service charge for Discovery Gardens by AED5, down from between AED18-19 per sq ft the previous year exclusive of cooling, and would backdate the new rate to January 1, 2009.

A spokesperson for Nakheel said: “We continuously review service charges to ensure that owners receive the best service for their fees. Any savings which can be made are then passed on to the owners. All accounts are independently audited to ensure accuracy and transparency for homeowners.”

Service charges for 2010 have not yet been finalised, the spokesperson added.

However, Aldendorff argued that the state-owned developer has failed to deliver communal pools and cycling or jogging trails.

All three are still advertised as forming part of the Discovery Gardens development but, a year after handover, have not materialised.

“We are still paying for these facilities, but they haven’t appeared so how are these charges justified?” he said. “This money is being diverted elsewhere by Nakheel.”

Discovery Gardens’ residents are now hoping the Ruler’s Court will intervene in their favour.

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Posted by: Name withheld Wednesday, 26 August 2009 10:15 AM[UAE] - United Arab Emirates

What is completely unnacceptable is the pathetic design and shortsighted thinking that is reflective in Nakheel and other Dubai developments. The owner is viewed as nothing more than someone who pays the developer his fees and goes on happily living in poorly concieved developments. These developers think this will go on forever but they just dont get why it will not. Owners will eventually win out, this is just signs of the start of the democratisation of the property industry in Dubai. It has no choice if it wants to be globally competitive and it realises this. So have patience. What is really the issue is no attention has been paid towards who is going to live in these communities, what services will they need, and how can the developer provide them at the lowest cost over the life cycle of the project in the most efficient manner. Once carbon is priced in the world economy in the next 5-10 years, Dubai will become overnight the shining example of how not to build a city, and how not to build communities. How hard is it to put solar heating on a roof top Nakheel ... its free! How difficult is it to solar orientate buildings in a desert to minimise solar load? How hard is it to promote cross ventilation in design? To put water efficient tape fittings in your developments? Please wake up to yourselves.... if you dont get why do it anyway ... you will actually make more money!

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Posted by: durai Wednesday, 26 August 2009 9:32 AM[UAE] - UAE

I took a flat in one of the nakheel property on rent , before moving to there, I lost my job and forced to cancel my contract before shifting to the new flat(immediatley after starting lease). I wasn't stayed there for a single day. Eventhough, they took three months rent, commission and moreover their facility management guy ispected flat and deducted some amount for mafunctioning of lights. For getting security deposit, I was behind them ..... what a service???. Other interesting thing, I got additional bill of around 1000 dirhams from dewa as a cooling,housing fee etc....

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Posted by: abukhaled Tuesday, 25 August 2009 12:49 PM[UAE]

I am intrigued to know who in his sane sober mind would buy in discovery gardens?? haven't you guys seen the level of service provided at the international city? it is appalling, horrendous,atrocios the least to say! Nakheel doesn't have a proper services team nor has it contracted the services to any qualified contractor like any other reputable developer would do..a friend of mine living in int'l city had the following response from a nakheel representative upon requesting a service for some leaking drains in his appartment: Sir, i advise you to solve this problem yourself as nobody will attend to it from our side!! Nakheel is only interested in bagging your service fees, if they claim not, then please show us what is the money being spent on? Building trees in the sea maybe? what a shame!

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Posted by: Nacheez Tuesday, 25 August 2009 12:19 PM[UAE] - UAE

I think the residents also need to take up the issue of justifying the 5% Housing Fees imposed by the Municipality and mostly billed with DEWA. Developments like Discovery Gardens, Meadows, Jumeirah Islands do not rely on the Municipality for any of their services. So why burden the owners, and in the end the tenants with this extra tax?

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Posted by: Mike Charles Tuesday, 25 August 2009 12:10 PM[UAE] - UAE

The golden rule in this country is "Developer is King". The developers are of, for and by the gv. Why was article 11 of Law No 13 of 2008 changed - obviously for the betterment of the investor! JBR is yet another example where the hike in service fees has had a cockeyed reception from RERA

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