“The beach belongs to Nakheel, it’s our beach,” the chairman of the government owned master developer, which is embroiled in an ongoing dispute with residents and tenants on the Palm Jumeirah over service charges, said in an interview this week.
“There’s no excuse for not paying. All our fees are approved by the Real Estate Regulatory Authority (RERA) and audited by auditors,” Nakheel chairman Ali Rashid Lootah said in an interview with a local newspaper.
Nakheel’s long running battle with its customers on the Palm Jumeirah started last December when it banned more than 1,300 residents from using the beaches and gyms at its Shoreline Apartments residences and claimed it was owed US$20m in unpaid service charges.
The row escalated when Nakheel drained all six swimming pools at another development, its prestigious Marina Residences towers.
When asked if the developer planned to take control of the man-made island’s beach area Lootah said: “The beach belongs to Nakheel, it’s our beach. We will go as per the contract we sign. I don’t want to elaborate more. Whatever is there in the contract, we will respect it. It is not what people think they are entitled to.”
“People are not paying service charges. How can we arrange the necessary facilities? If nobody is attending the swimming pools, do I leave it unattended? What is the safest way to deal with it?” he added.
Lootah said that the situation had begun to improve and those with outstanding charges “have started to pay their dues”.
“I would like to add that Nakheel’s service fees are among the cheapest in town and there are certain people who recognise this,” he added.
Earlier this year, real estate agents told Arabian Business that some of their tenants are now shunning apartments on Palm Jumeirah developments as a result of the row over unpaid service fees.
“The articles written recently about the problems of service charges or lack of payments to properties on the Palm are, I am sure, having a negative effect,” Mario Volpi, head of residential sales and leasing at Cluttons, said in June.
“When we are offering a wide selection of properties there does now appear to be a reluctance [towards] the Nakheel properties on the palm. The questions from prospective tenants are mainly along the lines of whether the landlord is up to date with his/her maintenance payments,” he added.
Patricia Fernandes, assistant manager of residential sales and leasing at Better Homes, echoed this sentiment and said tenants were now “being extremely cautious” about renewing leases on the Palm.
“It’s been noticed that quite a few tenants who have been renting on the Palm for a while now are extremely frustrated and no longer wish to renew their leases, or are looking to break their lease for the obvious reasons of limited or no access to on-site amenities," she said.