By Elsa Baxter
Survey finds only 11.7% think investors should accept revised offers from developers.
Fifty six percent of people think property investors should go straight to court if developers halt or delay projects they have bought into, the latest Arabian Business poll has found.
Only 11.7 percent of respondents said investors should accept revised offers, especially in the current economic climate.
A further 27.4 percent said it would depend on factors like the value and location of a revised offer as to whether they would accept it in lieu of the original investment, the survey found.
Only 4.9 percent of people said they would hang on for the original development to come to fruition, no matter how long it was going to take.
The poll follows comments by lawyer Richard Bell, an associate with Clyde & Co, who told Arabian Business last week that
Dubai investors were wise to accept revised property offers
“My advice to them would be that if a developer is offering them revised payment terms or an alternative property in another development that’s in a more advanced stage of completion – take it.
“Because you’ll either get a property, or if you don’t, you are in no worse a position than you are now,” he said at the time.
More than 400 projects with a total value of over $300bn were placed on hold or cancelled in the UAE, according to a report on the construction sector by research company Proleads last year.
Is it not time that RERA started to "regulate" , if a development is not going ahead then cancel it, freeze the ESCROW account and repay the end user / investor back the remaining money, this money is after all the end user / investors money, is it not? The reason for an ESCROW account was to protect the end user was it not!!! Have I misunderstood why we have ESCROW accounts? Until people see RERA enforcing transparency in the market (looking after the end user and not just the developer) of course people will go to court.
Dubai would be better of by starting to protect the investors instead of the developers. This would help to get back the trust in Dubai so Investors will come back. For my share, i won't invest in Dubai anymore because i lost all trust. Why should I agree with another project? if i invested money in comercial space i don't want a villa or apartments!!! If I sig a contract for a Mercedes and then they offer me 3 Toyote Minivans, that's not what i signed for! they should pay the money back to the investor and only THEN make a good offer to the investor. If the investor is being treated correctly he may be interested in re-investing the money with that developer...
we accepted a revised offer from someone who took over the project, we signed a document waiving our rights to take the new company (this was a large listed company with a serious reputation at the time) to court once we accepted this new offer. Guess what..they reneged on the offer and said we could not take them to court due to this waiver. They were in the process of disposing of the asset and told us to get lost. So you have to cover yourself.
Our apartments on the Pearl in Qatar are ready to be handed over and the developer UDC has said to that you need to sign new addendums to the original contracts which introduce new fees and charges (like 2.5% fee on purchase price and other fees which are mentioned, but no numbers) and changed clauses which "allow charges of 15% minimum on all maintenance expences" - this is up from 5% and note the minimum is 15% and there is no maximum. I'm only on page 2 of 33 pages of the addendum. Your options are: 1 You sign it and get ripped off forever more due to new clauses allowing seemingly unlimited fee hikes or 2 You don't sign and you do not get your property handed over or 3 You go to court..... These developers leave you few options and it is not just the Dubai developers. This is the Pearl Qatar and it is now!!!
The Dubai real estate market developed rapidly into a pyramid selling scheme. To be charitable, the authorities may have been taken by surprise by the velocity with which the whole thing took off. A proper legal infrastructure did not really exist and attempts to put one in place have been slow and faltering at best. Dubai was dangerous for investors because it gave the impression of being a mature, regulated market when in fact it was nothing of the kind. In many cases the money that was paid into escrow - and a lot of it wasn't - can be traced into partially developed or abandoned projects with no real value. In many cases there simply is no cash available to give back. It's a mess.