Nakheel jumping gun with guest fees, say Palm tenants

Nakheel moves to roll out access cards in preemptive strike in row with Shoreline homeowners
Nakheel jumping gun with guest fees, say Palm tenants
The luxury Shoreline apartments on Dubais Palm Jumeirah
By Claire Ferris-Lay
Thu 17 Nov 2011 10:47 AM

Shoreline tenants are moving to stage a boycott of a planned roll out of access cards by Nakheel, as the Palm Jumeirah developer presses ahead with plans to privatise the building’s beach clubs.

The state-owned firm has asked residents to submit paperwork to receive temporary passes to access the building’s pool and beach facilities, and said it will charge guests a fee to enter.

“This is outrageous, and I would think illegal,” said one resident, who asked not to be named.

“I have spoken to many residents and none of us are going to comply with this, even if it means we never use the beach again.”

Nakheel plans to charge residents AED5,000 a year to access Shoreline’s facilities, and to open up membership to non-tenants at a cost of AED12,000.

The move has enraged tenants on the palm-shaped island who argue that they bought their properties on the premise they would have access to the pools, gyms and private beach, and have lobbied Dubai’s real estate watchdog, RERA, to rule on who owns the rights to the facilities.

“By moving ahead with this, Nakheel isn’t even waiting for a decision from RERA,” the tenant said. “It is basically disregarding homeowners and trying to charge us anyway.”

Interim housing associations on the luxury development have asked residents not to comply with Nakheel’s request for paperwork, ahead of a decision from RERA on the legality of the scheme.

In a circular to tenants, the homeowners association said: [Nakheel does] not have the right to announce this or put this in place. The contractual terms of the shoreline purchase agreements allows the exclusive use of the beach facilities for all residents.”

Service fees and additional charges have become a particular bone of contention between developers and homeowners since the collapse of Dubai’s real estate market in late-2008.

Developers who once saw millions of dollars in profit during Dubai’s real estate boom have struggled to stay afloat after the emirate’s property bubble burst, leading buyers to accuse companies of charging inflated fees for building upkeep or access to promised facilities in a bid to maintain a revenue stream.

“We need RERA to make a decision because ultimately they are the ones that are going to have to decide how this moves forward,” a Shoreline homeowner told Arabian Business.

Funds earned from membership fees may be a good source of revenue in the short-term but are likely to damage an already depressed real estate market, said Edward Sanders, director at Dubai-based building management firm, Place.

“I’m sure a developer may be able to generate a revenue stream in the short term but it could create long-term damage for the Dubai real estate market both locally and internationally, which is my main concern,” he said.

“It is all about market perception. When the market is depressed, as it has been with the downturn…and they are trying to attract overseas purchasers, it could be very damaging.”

Nakheel was not immediately available for comment.

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