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Tue 29 Jul 2008 10:18 AM

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Investment blow at delayed Ivory Tower

Dispute looms as hundreds of investors are reportedly told by developer that contracts will be cancelled.

Hundreds of investors in the long-delayed Ivory Tower residential project in Dubai have been told by the developer, Sokook Investment Group, that their contracts will be cancelled and 20 per cent of the sales price kept.

Investors were told the move was made because they were in arrears in instalment payments, despite Sokook allegedly informing them a year ago that no further payment was due until construction began, according to The National.

“Since you were not able to pay within the due date and we did remind you of your payment schedule, please accept our apology that your contract has been cancelled automatically,” Sokook said to investors in a letter.

It added that Sokook would retain 20 per cent of the sales price as a cancellation fee.

Earlier this month, Sokook pledged to the Dubai Real Estate Regulatory Authority (Rera) that construction would begin on Nov 1 after a dispute over a bank guarantee with Tecom – the master developer of the International Media Production Zone, where Ivory Tower is to be located – was resolved.

Rera sent a statement to investors confirming that the issue had been resolved and that construction was likely to begin, albeit three years after the project was launched.

The latest move has provoked more fury among those investors who bought units off-plan.

“Sokook has said that the reason for cancelling our contracts was due to not receiving instalment payments from us on time, even though we were told in writing from Sokook [about a year ago] that our next payment instalment was put on hold until construction began,” an investor from the UK told the newspaper.

In the past week, several investors have allegedly threatened legal action against the Saudi Arabian company.

About 770 investors are believed to have bought property in Ivory Tower, 100 of whom were from the UK.

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Sanjay 12 years ago

Another big joke on UAE soil. Come on you guys have not even started construction and are demanding $. In fact you should be compensating those investors who have trusted you to start with. Get started first and stop playing these "read the contract terms" and "we will take your 20%" game.

tefar mustafa 12 years ago

Why has RERA not been involved in the situation? They're supposed to stop such incidents from occuring in Dubai's property market today. Overall it just shows not to buy in Dubai as regulator are weak and corruptions runs rife. Hope these investors win convincingly and send out a message to developers that are in the market today

Aaqib 12 years ago

The government must be more vigilant & implement proper force to uphold Dubai's reputation. Just solving Palm Springs or a couple of projects doesn't seem enough.

Roger Woodward 12 years ago

Welcome to Dubai!

matthewwuillemin 12 years ago

When the investors get their 80% back, just go to Moscow and use the rest to buy some 'nice' ex KGB guys. They will get the rest back from the developers - because they would ask nicely of course!!... money well spent!

Dharmendra Parmar 12 years ago

RERA is telling investors that there is nothing they can do ! The clear message from them is "Go to the courts. We can't help"

David James 12 years ago

This has put me off ever buying in Dubai. How can a developer been allowed to do this? It just shows the weak regulators that are in place in Dubai today.

Marwan Alsalad 12 years ago

Why hasn't the Dubai Government intervened in this situation. I've never heard of a developer retaining 20% of investors installments as a fee. The developer hasn't even commenced construction, it's sounds totally illegal and unethical.

Marwan Alsalad 12 years ago

Who on earth is going to invest in Dubai property when these incidents are happening on a constant basis?? The Dubai government and RERA should be doing something to prevent and protect investors in the Dubai Property Market.

SR 12 years ago

Well I guess the investors should take up this to the authorities and get their money back, this is outrageous! When you come to think of it this should remind a vast majority of investors who buy off-plan properties that they are taking a huge risk. I can remember somebody suggesting sometime back on an Arabian Business forum that "get in and get out" that is how it should be and another person suggesting that there is nothing wrong with the way market is behaving. They may be right. BUT fundementals are at work here, there is a relatively high risk and you are compensated well for that risk! If anyone is willing to take that risk, good luck if things go well (which I sincerely hope it will), you will be laughing 02 years down the line. If not bad investment, you are done, that is how it is!