Nakheel plan to privatise Palm beach legal, says chairman

Nakheel ‘can’t make everyone happy’, says plan to charge for beach club access is legal
Nakheel plan to privatise Palm beach legal, says chairman
The luxury Shoreline apartments on Dubais Palm Jumeirah
By Claire Ferris-Lay
Wed 23 Nov 2011 03:38 PM

Nakheel
is legally permitted to privatise the beach clubs on its flagship development
Palm Jumeirah, and doesn’t expect tenants to be happy with its decision, its
chairman said.

The
state-owned firm developer, which plans to charge homeowners at its Shoreline apartments
up to AED5,000 a year to access the building’s pool and gym facilities, would
not be pushing ahead with its plans if it did not have regulatory approval, Ali
Lootah said on Wednesday.

“There
is no issue with that, people want something which they are not entitled to,”
he said. 

“I
cannot make everybody happy. They should read their contract. We checked
legally, we went to RERA (Dubai’s real estate watchdog).

“RERA is
the regulatory authority [and] we don’t do anything without taking approval
from the regulatory. We abide by the law and we respect the law.”

Lootah
said he did not see the move damaging Nakheel’s reputation internationally.

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.

Real
estate analysts have said any move to charge for access to beach and pool
facilities in buildings would be a further deterrent to investors mulling
property deals in the emirate.

“Developers
overpromised and under delivered,” Charles Neil, CEO of real estate consultancy
Landmark Properties said.

“It’s
really bad for the development community because investors in future just aren’t
going to trust them and that’s why they’ll never get an off-plan market going
again – because investors now want to touch it, feel it and see exactly what’s
on offer,” he added.

Residents
on the Shoreline have opposed the move. In a letter to RERA homeowners have
called for the real estate watchdog to step in and declare them the legal
owners of Shoreline’s communal areas, a move that would smooth the way for a
housing association to dictate its own service charges for facilities.

 “[This]
is not what the owners want. All the boards of all the owners
associations believe that the clubhouses are part of the common
property of the Shoreline,” said one investor, who asked not to be named. “The
description laid out in the UAE law [law 27 of 2007] points to them being
common property as well.

“All the
[owner associations] have written to RERA letting them know what we thought we
had purchased - i.e. what we believed we were sold by Nakheel.”

Tenants
living at the Tiara Residence on the Palm Jumeirah were told last month their
families and guests must pay AED200 to use the pool, gym and beach at the
weekends. Developer Zabeel Properties said in a circular to residents that the
move was measure to reduce overcrowding.

Dubai
Properties Group told Arabian Business in September that tenants in its $1.6bn
Jumeirah Beach Residence development would also have to pay for access to its
long-awaited beach club when it opens later this year.

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