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Mon 6 Feb 2017 09:38 AM

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Dubai developer in dispute over construction delays, unit changes

Shaikhani Group’s Champion Towers at Sports City has taken more than a decade to complete

Dubai developer in dispute over construction delays, unit changes
Shaikhani Group said last month it had completed its AED150 million ($40.8 million) Champion Tower 1 residential building in Dubai Sports City. It said 135 units were ready and it intends to start handover this month.

Investors in a string of residential projects in Dubai Sports City have hit out at the developer, alleging long delays and issues over registration and cost of completed units – some of which are larger than contractually agreed.

The developer, Shaikhani Group, told Arabian Business it admits the schemes have not been delivered on time and blames economic challenges and delays in the supply chain that have impacted construction timeframes.

It said it had “addressed investors’ grievances” with a package of potential solutions, but investors say outstanding issues remain.

Shaikhani Group said last month it had completed its AED150 million ($40.8 million) Champion Tower 1 residential building in Dubai Sports City. It said 135 units were ready and it intends to start handover this month.

Champion Tower I spans a total built-up area of 114,124 square feet and comprises 135 housing units, including 49 studios, 50 one-bedrooms, 30 two-bedrooms and six three-bedrooms. There are also 135 car parking spaces, according to the developer.

Three more towers – Champion Towers 2, 3 and 4 – are in various stages of planning and construction, also by Shaikhani Group.

But investors say they are frustrated, because some completed units have been delivered at a bigger size than agreed in sales and purchase agreements (SPAs) and the developer has asked investors to cover the cost of this increase.

Some have refused to do so, and therefore have been unable to register their purchase with Dubai Land Department’s Real Estate Regulatory Agency (RERA) and obtain their title deeds.

One investor, who asked to remain anonymous, told Arabian Business: “I’m part of an investor action group whose members have been waiting for units for 10-plus years now in Champion Towers 1, 2, 3 and 4.

“A total of 789 units are due since their [sales] launch between 2005 and 2008. We’ve just tried to mediate with our developer, the Shaikhani Group to resolve our issues.

“[Among these issues are that] some members cannot register their units unless they pay for an increase in their unit size above 5 percent, change the location of their unit and sign new SPAs. The deadline [for registration] has passed and an investor cannot register their unit unless the developer agrees to it.

“Some members paid extra and or were forced to sign new SPAs to register their units but have yet to receive their Oqood [official government confirmation of unit purchase and registration] after two years.

“Other members have received threats of default and late payment fines. Registration is supposed to protect investor’s rights. It’s not a bargaining tool.”

Among other complaints are that the developer has appointed a company to oversee handover of the units in Champion Tower 1 without consulting investors. That company is allegedly not on the official government-approved ‘Ejari’ list, they claim.

They are also concerned that construction work has yet to get properly under way on the three other towers, although one investor said the developer had explained that once Champion Tower 1 was completed, workers would move on to start on the rest.

Speaking on behalf of the group following the announcement of the Champion Tower 1 handover last month, the investor said: “We welcome the news that Champion Tower 1 is completing after its launch in 2005 but we have issues that still need resolving.

“There were not workers at Champion Towers 2, 3 and 4. There were no workers at Champion Towers 2, 3 and 4 last week. There is no end in sight.”

Shaikhani Group said in a statement that the size increase claim was correct, but that “there is a provision in the SPA to charge the client with the excess area, which is also in line with RERA guidelines as the customer benefits from the additional area”. Arabian Business has asked for clarity over how the customer benefits.

The developer continued: “The maximum increase in area is anything above 5 percent to 12 percent; the first 5 percent is not charged by the developer.

“Effectively regardless of the excess actual area, 7 percent is the maximum amount that is chargeable and the revised area is reflected in the customers’ title deed for resale purposes.”

On the claims over blocked Oqood registration, Shaikhani said: “Should any customer have a query regarding the registration of their unit(/s) they should contact us directly to enable us to register their unit.

“At times customer data is not correct, for example, there may be out-of-date passports, documents that need to be signed and so on. Yet we endeavour to contact customers on their registered contact details to resolve these matters.”

Mahmood Shaikhani, managing director of Shaikhani Group, added: “Property development is a multi-stakeholder complex economic activity that is guided by the country’s regulation where all stakeholders – Master Developer, Consultant, Property Developer, Main Contractor, Sub-Contractors, Building Materials Suppliers, Landscape Contractors, Property Broker, the Bank – and most importantly, the Property Investors and Buyers – have to play their respective roles to ensure the smooth and timely delivery of each project.

“This whole process, starting from the concept to delivery, cannot be executed smoothly if anyone falters in the whole supply chain. Construction is a labour-intensive and manual process that itself relies on a number of economic and external factors. There are certain elements in the process that even the developers can’t control, such as increased cost of labour, building materials prices, etcetera.

“As a project owner, however, the onus is on the developer to complete the project and handover – despite challenges. Shaikhani Group has invested large equity into these projects, even when investors and buyers could not.

“While acknowledging that there has been delays in some of the projects, Shaikhani Group has addressed the grievances of all the investors with multiple options, as per RERA rules and regulations, which protect the investors’ interest.”

Shaikhani insisted that the developer remained committed to the planned projects and appealed to investors to be “patient”.

“We work for our customers and all stakeholders. While we can’t change the past, we surely can change the future,” he said.

“That’s why, we have fast-tracked our projects and are delivering as many as 359 units in a year’s time, with many more to come. Those who have waited for long, we tell them – have a little more patience. Your home will be delivered, regardless of the odds.”

The investors group representative further argued: “Shaikhani Group has been given the opportunity to resolve these issues but have ignored their investors.”

Shaikhani Group responded: “We are always happy to work with any customer that has concerns regarding their investment. Contact us at or on our office landline + 971 4 364 9265.”

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Jean Charles 2 years ago

It has taken a decade to complete one building, but at least it has been finished, so some credit is due to Shaikhani Group. Compare that to projects like City of Arabia by IMG, where there is little hope of resolution.

Wafa Ali 2 years ago

i bought one unit in Frankfurt Sports Tower and it was handed over last year, after a long time. i am glad that i got my unit from this developer finally, at least they did not run away like others.