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RERA chief denies petition from worried investors
Dubai's real estate watchdog on Thursday denied reports it had received a letter signed by 300 real estate investors voicing their concern over the fate of their investment.
It was claimed that the Dubai Property Investors Group, made up of more than 300 local and international investors, lawyers and real estate developers, had delivered a petition to the Real Estate Regulatory Authority (RERA).
It reportedly urged the watchdog to clamp down on "fly-by-night developers" who were unable to deliver projects amid tightening liquidity and project financing, even though they've taken down payments from investors.
But Marwan bin Ghalita, CEO of RERA, branded the petition story, published earlier this week by newswire Zawya Dow Jones, as "absolutely untrue".
"Personally, I did neither receive a letter of this kind nor any call from the said news website or other," he said in comments published by news agency WAM.
He added: "Maintaining a well-regulated market that provides protection to all stakeholders is one of our top priorities."
He claimed that RERA had, since its creation about one year ago, been taking tremendous efforts to regulate the real estate sector by issuing flexible regulations with the highest possible level of transparency.
"Loss of investor's rights is a red line...it has not happened and it will never happen in Dubai real estate market...RERA has completed registration of developers and brokers at its records to preserve their rights," he added.
"We understand the feelings of worry resulted from the impact of the global financial crisis but we are against the unjustifiable panic, exaggeration and hitting under the belt by some for the sake of making illegitimate ends."
He appealed to investors not to hesitate in calling RERA to know the update of any project and stressed that RERA would never allow developers to breach real estate laws, especially the escrow account system.
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Posted by Bob Taylor on 18 October 2009 at 08:59 UAE time
I was given to understand by a friend of mine who is one of those many who have been taken for a huge ride by these shady developers, that RERA has told him all property disputes are now being handled only by Dubai Courts and no longer under the jurisdiction of RERA. There has been a new law passed end of September '09 and RERA has told them please do not come to us but go to Dubai Courts. If this true, it will be the last nail in the coffin for the property market!
Posted by Ayesha Butt, Dubai, UAE on 26 April 2009 at 15:37 UAE time
Last May I alonwith my brother and a colleague from work had purchased an off-plan properties in Jumeirah Village South. We are asked to pay a down payment of 15% of the property value and the rest we were assured will be covered by Morgage. In October we were called at the developers office saying that due to the current economic situation mortgages will not be available and therefore we will make full refund of the down payment. Since then and as I type this message we are yet to receive any concrete word on our money. Many investors with the project have filed litigation. Construction is no where near starting point (although completion date was June 2009), we only have receipts and no Sales Purchase Agreements. Everyday we are told 2-3 days, weird rules as dictated by RERA and I had filed a query with RERA in December (as suggested by an officer of the hotline RERA has in place) and till date no one has even called me to discuss this. It is impossible to get an appointment to meet in RERA. Jist of the matter is we dont know whether we will ever get our money back and RERA was nothing but an ineffective body. We had lived our entire lives in UAE and thought a good opportuity to buy here and live here but I regret the day I decided to invest in UAE. Never again and I would suggest all reading this not to as well. The land has no laws with respect to freehold properties and everything is regulated extremely poorly. Would you want to invest in such a place?
Posted by Sandeep, Dubai on 24 March 2009 at 14:51 UAE time
Why is all the fairness being shown towards the developers only. If a certain right is being given to the developers, the same should be given to investors as well. If developers have the right to postpone or even cancel any project, even investors should have the right to come out of a project and there maybe a small fee attached to this. When there is a law that 70% of the invested amount needs to be returned back to the investor in case of a default and cancellation, then why is this not being followed? If an investor is ready to give up 30% of the invested amount, it just shows how desperate the person would be and this desperation can be due to financial circumstances or even due to total loss of confidence in the developer. Why would RERA not clarify this rule and let the investors who want to cancel, go ahead with it. THis will also stop some of the unethical developers to take advantage of the money invested with them on pure trust.
Posted by Jas, Abu Dhabi, U.A.E. on 19 February 2009 at 22:33 UAE time
It seems that those like me who have invested their hard earned money into projects covered by an Escrow account are struggling either with the developer or RERA to get a refund on their investment. This is even though the develpers have failed to fulfill their obligations. Not all have been in it for speculation but majority have bought for long term investment and would be prepared to wait if they could be assured that the money is safe.
The reality is that if the investors do not see a release or a major portion of their investments being returned from money held in Escrow accounts the trust in Dubai will lost and take a very long time to be regained again because it is not affecting only a few.
Posted by devotta, dubai, uae on 17 February 2009 at 21:20 UAE time
Would those 300 investors please resend this petition for the sake of all those poor investors who have no clue on whats happening to their hard earned money. Most people seems to think that it was only speculators who took the hit from the market crash..but what about the many genuine potential end users who had dreams of making UAE their home..people who have a monthly salary with children and other expenses. All thier preserved savings were invested in this 'transparent regulated' market.
Simple Question: I have invested in a project (The Palisades) 1.5 years back with no construction progress at all( not even piling) untill today. All I did was wanted to own a 'real' home and I have lost all my payments in exchange for 'uninterrupted views of sand'. Will I ever get my money back?? Or will it be the usual 'construction going in full swing' and next thing you know 3 years down the structure is ready..
I am aware of the amazing progress the big developers have ahieved..howver what about these private developers who claimed to have an escrow account with good funding and now after 1 years from payment ..nothing.
Posted by ahmed, dubai, uae on 14 February 2009 at 16:36 UAE time
in reply to rera ceo mr marwan bin ghalita comments, He appealed to investors not to hesitate in calling RERA to know the update of any project and stressed that RERA would never allow developers to breach real estate laws, especially the escrow account system,,,i am not agree with this comment as i know a local developer company has been exempted from escrow account,,he has 0 balance in their escrow account and collected millions of dhs for their off plan projects which has not been started construction yet even after a year time and also they dont refund us our money,,now really we dont have trust left in any company or institution regarding realesate whether they are private or rera,,noboby help us in refund of our money for they project which will never ever start construction.
Posted by Wilhelm Niederhauser, Sharjah, UAE on 14 February 2009 at 11:19 UAE time
I am not surprised that RERA would deny having received any petition. Unfortunately, they dont seem to honor any commitments towards investors queries. On 22. December i made a request on their web site under reference BUY-22-12-2008-000010. It remains unreplied till to date. On 21. Jan., 3 of us, investing in the same project submitted an "Enquiry Form", asking for intervention for a project that has not been started and has irregularities in the escrow account. This form states: "Our respond will be within 48 hours". None of us has received any response till now.
How can RERA be trusted to be a regulator, when they dont honor their own commitments ?
Posted by JT, UK on 13 February 2009 at 14:38 UAE time
A realist,
You have no right to refer to the group as "a bunch of losers"
The aim of the group is to work with the government, developers and come out with equitable solutions to solve the real estate woes of the country. I'm an investor in Dubai and have been for a few years and believe this petition is the best way forward to work with the government.
HL Nagpal, the group is the Dubai Property Investor Group and can be found at groups.google.com
Posted by Mike on 13 February 2009 at 12:47 UAE time
If Dubai is to become a truly global city with international standards, such "State of Denial" must end!
CEO of RERA states "Loss of investor's rights is a red line...it has not happened and it will never happen in Dubai real estate market"
Come on we all know investors who lost lots of money even in the good days because there are no laws to protect them!
If RERA CEO is truly unaware of such investors, I can post a list of at least 100 names!
Time to change and face challenges head-on!
Posted by Nigel, Buderim, Australia on 13 February 2009 at 12:27 UAE time
If you have read the full petition you would know it is about the laws that have been changed or breached and laws of the land form part of any due diligence and therefore financial investment decision.
Law eight states money held in escrow can only be used for construction of the project, but the government have allowed developers to take money out of the trust account to pay for the land, so now when these projects are no longer feasible and should be cancelled the money investors have paid cannot be returned, because it is not where it should be.
Law 13 states 70% of any money paid by a purchaser, must be returned by the developer should the purchaser default and the developer cancels the sales contract, however the law which came into force in August 2008, as been misinterpreted by the Land Department, who are now wanting investors to stand to the first 30% of any money they have paid before being entitled to a refund. There will not be many investors that bought in 2008 that have paid more than 40%, so now they have to kiss goodbye to there are earned money, because the 70/30 mortgages they were promised by the developers are no longer available and the developers are wanting to cancel their contracts. These are not people who have paid 10% and are looking to flip before the next instalment, bur are genuine investors. The market is made up of 70% investors, so there was never going to be enough end users to buy up the entire product. The real estate sector represents 30% of the countries turnover, so this problem cannot be ignored because it will effect everybody living in Dubai in one way or another