Investors in Palm Jumeirah’s luxury Golden Mile complex have
said they will move to terminate their contracts after battling for more than a
year to gain access to their completed apartments.
Buyers said they will push to cancel their deals with Souq
Residence, a joint venture between Kuwait's Ifa Hotels and Resorts and a unit
of Dubai World, after a legal ultimatum aimed at forcing the developer to
handover homes or issue a refund failed.
The developer’s response was “negative,” said homeowner
Martin Lawrence. “We are now
in the process of terminating our contracts with them.”
Buyers in the luxury real estate project are caught in a
feud between Souq Residence and Dubai state-backed developer Nakheel that has
left them shut out of the finished properties.
Nakheel is suing Ifa for the return of about AED100m in
advance payments for the purchase of retail units in the ground floor Golden
Mile. The developer, which is seeking to alter terms on $10.8bn of debt,
claimed it had cancelled the purchase agreement and should receive a refund.
Ifa disputes the agreement was ever cancelled and has
countersued Nakheel in the Dubai World Tribunal for the remainder of the
payment, which amounts to around AED1bn.
While Golden Mile’s apartments are completed, Ifa said it is
unable to release the units to investors as Nakheel has withheld the
certificates needed for handover. The firm has claimed Force Majeure – a clause
that allows it to rescind its contractual obligations in the event of
extraordinary circumstances – as justification for its refusal to issue a refund
In some cases, apartments were scheduled for handover more
than a year ago, Lawrence told Arabian Business in May.
“Most of us purchased these properties back in 2004,
we paid for them in full back in August 2009.
The properties have been fit to live in since April 2010, but yet we
still have no idea when we will get the keys, if ever.”
dispute reflects the ongoing impact of the Gulf-wide real estate crash on buyers
in the emirate. Nakheel, one of the largest casualties on the property bubble, is
embroiled in at least 45 legal disputes, according to court papers filed at the
Dubai World Tribunal.
of investors have been hit by stalled construction after billions of dollars worth
of real estate projects were put on hold in the wake of the financial crisis.
Mile buyers now say that legal action may be their only way to resolve the
situation, after appealing to government departments for help.
communication between Ifa, RERA (Real Estate Regulatory Authority) and Dubai
Land Department has been simply awful,” Lawrence said. “It sheds a very poor
light on Dubai itself. Intervention from a higher authority is what is needed
to protect all us innocent victims.”
case between Ifa and Nakheel continues at the Dubai World Tribunal.
Subscribe to Arabian Business' newsletter to receive the latest breaking news and business stories in Dubai,the UAE and the GCC straight to your inbox.