By Martin Morris
UK’s Channel 4 News talks to disgruntled investors with Dubai property developer.
In a report broadcast Monday night in the UK, Channel 4 News spoke to unhappy British investors with property developer Damac who have yet to see a return on their money in the Dubai market.While some wanted quick returns, others simply wanted an apartment in the sun - not least David Hunter of Oxfordshire who said he had handed over £60,000, so far, for an apartment at Damac’s Lotus development.
Hunter said a Damac representative told him at the time (February 2007) of purchase that construction on the development had already started.
Three months later Hunter found out otherwise when it emerged that the plot was occupied by a UNICEF building. Hunter not surprisingly said he 'should have been told'.
Citing documents, Channel 4 claimed Damac had been selling developments off-plan without having title to the land in the first place - a practice outlawed by the Dubai Government last August.
Another document, dated from ‘late last year’ alleged that almost one quarter of the firm’s projects had been put on hold.
Meanwhile, a Harrow NW London resident who bought off-plan in the Flamingo Heights development 18 months ago, told the broadcaster he had paid three instalments totalling £70,000.
''I asked them in writing what the current state (of the development) was before I made my investment. I was assured that the foundations had been laid and construction was well under way at the site.''
With the Flamingo Heights development showing no evidence of construction when Channel 4 recently visited it Ludmila Yamalova of Al Sayyah Legal Consultants - to whom Channel 4 took the investor’s complaint - said he may have a case as a statement claiming foundations that had been laid when in fact they hadn’t, could amount to misrepresentation.
Erik Pekarski, former VP Customer Relations at Damac said the line being put out to customers was that 'progress is ongoing, development is ongoing and construction is ongoing’.
Customers would continue to scream and yell at you as they should, because they had been put off for months, he added.
Damac has, in some cases, since offered alternative flats either complete, or near completion. However, many investors Channel 4 spoke to said they wanted their money back but, like the Harrow investor, had been informed by Damac that there is a 'no refund' policy.
When asked about the 'no refund' policy an unnamed former manager at Damac said the company took a tough line. David Hunter meanwhile says he has hired a lawyer.
In a statement to Channel 4 News the company confirmed it didn’t have a refund policy, except within 'the provisions of the regulatory framework'.
It also denied any allegations of wrongdoing and said investors interviewed by the broadcaster were 'not a representative group'. The company added that it had no intention or policy to mislead customers.
Addressing the allegation that the company had claimed foundations had been laid at the Flamingo Heights development when in fact they hadn’t Damac said: ''It is possible to have a rogue element who communicated information which was inaccurate and not endorsed.''
It added that the Flamingo Heights project tender is due to go out shortly.
The first flat I bought in Dubai was a 2-bedroom at the Waves in the Dubai Marina. This was the 2nd project Damac launched after Marina Terrace. This was in early 2003 when the only mortgage provider was Amlak and at that time Amlak was offering mortgages for the Waves. I obtained a mortgage through Amlak after putting down 30%. Whenever I would drive by the Waves site there was nothing going on. I realized after 6 months that there was no way the building would be completed on time and I began to worry that I had been ripped off. I kept ringing Damac asking for updates but representatives kept saying that everything was proceeding as planned which I knew was impossible unless the dates in the Contract were pure fiction. I knew I had to sell and get out as this did not feel right. I cut a deal with a Damac representative to give him AED 5,000 dirhams if he directed an interested buyer my way which led to me selling the flat. The rep did not hesitate to push potential buyers my way. I sold the flat 2 months later for a low premium but still far less than the then prices for Waves units bought directly from Damac. While closing the unit I learned from Amlak that they had discontinued offering mortgages for Damac projects. I am not sure why, I didn't ask for further details, but I have to assume that in late 2003 even Amlak saw something going on at Damac that they did not like. I feel bad for anyone who has bought into a Damac project. I got lucky and learned early on to stay away from their marketing hype. FYI, I believe the Waves project was completed at least 18 months later than the Contract stated. I don't believe Damac has completed any of their projects on time.
With all these development scandals being revealed, the shady side of Dubai property we all saw for so long is finally coming home to roost. Those expecting a stabilization or revival in Dubai property prices should turn their TVs off now and stop reading the news if they hope to maintain their happy delusion.
It's so pity that companies like DAMAC ruin all the initiatives which are done to bring Dubai in an International level as a tourist, business and investment hub. Unfortunately these companies spend a hell in marketing without knowing the harm that in long term they bring to the economy and country. All peeps in UK know about Damac scandals and at the end of the day they all know that Damac is UAE based. I really think Dubai should really take this kind of cases serious on Damac or any other company who plays with the reputation.
Frightening in two ways. The first is the obvious - a lot of people are not going to get the property that they agreed to buy (and some may get nothing at all). The second less obvious one is that evey story like this that makes the international media makes secondary market sales even harder than they already are.
I had bought a retail space with Damac JLT in 2008 Feb, I made all the payments and also payments for transfer charge ( which they charge 3% whereas others charge less) . From that point it became a full time job for me to get my registed agreement from them. THEY LOST ALL THE DOCUMENTS!!. After writing several email they traced the docs. I had to visit their office more thatn 4 times and they kept on promising "will be done in next week". Finally in June 2009 ( 16 MONTHS later!!!!) one Thursday I went to their office and was there for from 9.00 to 4.00 PM and got my transfer completed. Thought the retail area was ready only in Feb 2009, they charged me the maintainence charges from June 2008. They have all the ways to rip you. Investors are just taken for ride at DAMAC
Are Nakheel any better ? and who owns Nakheel ? the attitude of these developers comes from the very "top". If banks can sue run away credit card defaulters in the UK why can't we sue developers in UK courts ?
When will PEOPLE understand that DUBAI is NOT what it seems!! Every Developer has gotten out scot-free when it comes to discrepancies. The Dubai Govt is not friendly to the end-user, 'cos it's getting revenues just for the project to get a green light, PLUS, all that land sold, commissions generated, taxes collected, etc.. Does one HONESTLY think bringing a lawsuit will stop all this? I hope so, 'cos I am also in the sidelines, waiting for eternity!! People want justice, not hollow words, or REFUNDS. My suggestion? Write down your OWN agreement, get it attested, and have the developer SIGN it before U sign it, with your conditions. See how far one can go. I seriously doubt they would want to sign on the paper with conditions. I would NEVER even Think abt referring DUBAI properties, unless, it's ready, or, even then, there's an audit on the MAINTENANCE expenses of the property to be purchased! Don't get fooled by glossy pictures or sweet nothings, and lose your hard-earned money, w/ no recourse from the courts either!!
No lawyer would be able to sue any developer over here. This is to avoid any distortion of the image of dubai. I have invested in 2 flats, both being handed over 2 years ( 24 months) after the contract date. No compensation. Its all an illusion.
I watched last nightâ€™s DAMAC report which aired during dinnertime here in London with considerable interest. Amongst the key foundations of a modern society are the sanctity of the rule of law and the primacy of private property. How the UAE courts treat these disgruntled investors will influence how global money markets continue to view Dubai. And with up to 90 billion dollars in public debt, Dubai cannot risk its image suffering in the eyes of international credit markets. If the local Dubai courts close rank in solidarity with DAMAC and deny these international investors a fair and transparent legal recourse, Dubaiâ€™s international financial reputation will suffer considerably. International investors will view Dubai as a place where one cannot do business because one has no legal recourse to commercial disputes. A few months ago Dubai made a brave decision in granting Andy Ram, the Israeli tennis player a visa separating itself from the vast majority of its less progressive neighbours. I hope Dubai continues on a similar path to openness and modernity by ensuring its legal system grants DAMAC investors their day in court.
Ah Joe, you now admitted to committing a felony act, bribery in the first degree. Not a good thing to admit in a public forum. That being said, I'm sure you aren't the only one who did this and I'm sure Damac wasn't the only company that had those "rogue employees". While I'm amazed at the audacity of the developers, I'm equally amazed at the naivetÃ© of the purchasers. As they say, Caveat Emptor! SJ