Tensions high in Jumeirah Village service fees row

Ahmed
Fathy, an owner of a villa in the project, said he was
considering appointing a lawyer after refusing to pay what he says is an
exorbitant AED13,500 community service fee – without which Nakheel will not
hand over his villa.

According
to residents, the fees have not been approved by Dubai real estate watchdog
RERA, as the village remains still under construction without promised roads,
parks and other community facilities.

Instead,
approval for the annual service fees – cash which is used to maintain communal
facilities – been granted by Dubai Port Authority.

A
spokeswoman for Nakheel did not confirm or deny the AED13,500 charge.

“Settlement
statements contain the normal service charges that are contractually payable,”
the developer said in a statement.

Fathy
said he was considering legal action, but that the high cost of hiring a lawyer
was stopping him – he said he had been quoted AED6,000 to get an initial
consult.

According
to Jonathan Davidson, managing partner of Dubai-based law firm Davidson and Co,
who successfully won a recent ruling against Nakheel on late fees, homeowners
could club together to take action through the Dubai World Tribunal.

The
panel was established to hear claims related to Nakheel’s parent company, Dubai
World.

“The
tribunal affords claimants the opportunity to join forces and make a joint
claim against Dubai World entities, including Nakheel, to be heard as one case
with payment of a single court fee,” said Davidson. “This is something which
would not be available in Dubai Courts where joint actions – often called class
actions – are not permitted.  Doing it
alone is very difficult.

As
for a group legal action, or class-action suit, Jumeirah Village “does have the
makings,” he said. “You’ve got communities with hundreds of residents who are
being faced with the same demands and same problem. They’ve got to take a stand
whether they’re going to pay it or negotiate. If they don’t work then the final
opportunity is we can try to enforce our rights against Nakheel.

Though
the skeletons of hundreds of villas are complete, Jumeirah Village – which had
been billed as a lush oasis with children’s parks, paths and convenience stores
– remains a dusty wasteland of empty streets and villas. Fathy said he believed
that just 300 of 2,000 residences had been completed and were currently
inhabited.

“My
villa is ready but the community is not – just one road, no shared area, no
security,” Fathy said. “And after all this Nakheel is still asking for a
service charge – the amount of money that will be used for common facilities,
landscaping. They won’t give me my villa until I give them 13,500 AED for the
year.”

Fathy
and his family are currently living in their old flat in Springs, though he had
originally been told he could move in by March of this year. He said his annual
service charge there is less than AED3,000.

According
to Fathy, a labour camp to house the Jumeirah Village workers remains on the
site.

“Even
the schoolbus won’t go there,” he said. “You cannot find a single plant, a
single tree. I was buying a villa in a community, not buying a villa just to
live. I was buying a community. “The nearest supermarket is 10km by car because
the road’s not ready,” he added. “If the community’s not ready I can just live
elsewhere.”

He
said his 3,000 sq ft property was unfinished, with no vegetation and no working
essentials like plumbing and electricity. It has been under construction for
two years.

“It’s
out of my control,” Fathy said.

In
a statement, Nakheel said work on the project remained ongoing.

“Nakheel
is currently engaging contractors in the short-term projects. Some of the short
term projects will be completed in 2011 and we expect that all short term
projects will be delivered by early to mid 2012.”

Dubai’s government said in March it will provide $8bn in cash to Nakheel to repay trade debts and complete outstanding real-estate projects.

RERA
did not respond to requests for comment.