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Thu 17 Nov 2011 10:47 AM

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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

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.

Arabian Business: why we're going behind a paywall

Andy 8 years ago

Total disregard of contracts signed ...... who controls the controller ????

Alia 8 years ago

very bad move from Nakheel! they are basically damaging themselves because buyers will now think twice before purchasing a property from Nakheel as they might be charged for the use of basic facility, or the lifestyle they wished to have whilst buying the property..

Voya 8 years ago

Shoreline Owners have to make a big noise in public and RERA, or they will face a big time rental / sale crisis or prices / yield reduction. It will affect 1 BR & 2 BR Owners the most. I am sure Nakheel would not take this move if they are not sure they can process. It might be a checking of the public reaction, therefore is mandatory to make a big noise about this ASAP.

Syam 8 years ago

Hmmmm..... I am not surprised...
Also, do not expect any miracles from RERA ;)

Salvador 8 years ago

RERA? what has RERA done so far beside announcements? I dont remember any facts since 2007! Maybe it is time for RERA to get out of the bush? or maybe they will come up with the same answer, take them to court?

telcoguy 8 years ago

I think that is not a big worry for Nakheel. The number of units they may sell is going to be low anyhow, so this may be a good idea from a financial perspective.
Of course when you consider the potential revenue it is really scary that a company like Nakheel seems to be ready to destroy what is left of its reputation for such a pittance. Different people will reach different conclusions as usual.
I am looking forward for some of those.

artemis 8 years ago

who ever is the brains behind this method of taking extra fees from those who had the trust of the country to "invest" are to blind to see that they are putting a Stake through the heart of the already crippled Real Estate market in Dubai.

Loy Machedo 8 years ago

All this is going to do just one thing - Destroy the already floundering reputation of the UAE real-estate market.

Palm Olive 8 years ago

who is "asked not to be named" in the article
they are certainly not speaking for me. I Intend to sign the paperwork ,pay my fee and sunbathe in peace and quiet.

Quasi 8 years ago

It is quite funny to think that anybody would like to pay for the facilities currently there.

Nahkeel have not been very good at maintaining the beach facilities. It takes months before anything gets fixed. Almost all underwater lamps in the swimming pools have been broken for over a year now. Nakheel assett management don't really do anything about it to keep their cost down. When you ring them about it you get a list of excuses.

This property was once marketed as luxury apartments. Now is is very slowly but surely sliding down into delapidation.... One of the apartment blocks have been without hot water for three months now......