Tenants threaten legal action against Nakheel

EXCLUSIVE: Discovery Gardens residents say service charge has not been reduced enough.
LEGAL ACTION: Residents of Discovery Gardens demand Nakheel lower its service charge further.
By Elsa Baxter
Mon 22 Jun 2009 01:15 PM

Tenants and homeowners in Dubai’s Discovery Gardens have threatened legal action against Nakheel unless “exorbitant” service charge fees are further reduced.

The Dubai-based master developer announced on Monday it was lowering the service charge by AED5 per square foot.

The new rate, which has been formally agreed with the Real Estate Regulatory Agency (RERA), will also be backdated to January 1, 2009.

Despite this reduction residents say they are still paying far more than tenants in similar developments across the Emirate.

Michael Aldendorff, who is leading a petition signed by 68 residents, said: “We’re not going to accept and we won’t pay unless it’s under AED13. Nakheel is hoping this will go away but it’s not going to happen.”

Aldendorff, who bought a one-bedroom apartment iin Discovery Gardens in March 2007 and moved in in August last year, said he has consulted lawyers about suing Nakheel, a number of which said they are happy to take on the case.

“We’re all prepared to foot the legal bill, but first we want to give Nakheel the chance to come to the party,” he said.

Tenants in Discovery Gardens were originally paying between AED18-19 per square foot service charges, Aldendorff said.

With the new reduction the total comes down to between AED13-14. On top of that residents must pay cooling charges of about AED11.

Aldendorff said tenants in The Lakes typically pay about AED7 per square foot in charges, while those in The Greens pay between AED13-15 per square foot, but this includes maintenance and cooling charges.

Residents also complained they are paying for swimming pools which have yet to be finished.

In a statement on Monday Nakheel said service charges were set according to projected costs and all accounts were independently audited.

Any rebates will be credited against next year’s service charge, which begins on October 1, 2009.

Abdulrahman Kalantar, managing director of Nakheel Asset Management and Design (NAMAD), said: “When we first set the service charges for Discovery Gardens, they were based on our best estimates for this new Nakheel community.

“Following a lengthy review, we have been able to take advantage of recent reductions in the cost of goods and services, which has in turn reduced our overall service charge budgets.”

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