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Wed 23 Nov 2011 03:38 PM

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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

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.

Joe Vagabond 8 years ago

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

what he probably meant was that it could not do more damage to Nakheel’s reputation internationally.

His Excellency Dr Paul 8 years ago

Of course it's legal.... but in most other countries it wouldn't be.

Dubai property has a rather poor reputation for delivering what was promised, and this kind of 'bait and switch' in such a high-profile location is going to do nothing to improve it.

Prospective Buyer 8 years ago

Well we were considering investment in a property in Dubai and after having seen this, you have just made up our minds not to invest in this region, shows just how un professional these developers can get over time.

Red Snappa 8 years ago

Basically as the master developer of the Palm Jumeirah, they are saying we are a government entity and we can do what we ever we wish.

If you the paying customer don't like it then tough, we make the rules. I note that RERA had some influence over Nakheel on the subject of service fees when it was part of Dubai World but now its a government entity no more.

The question now arises as to what powers the Owners Associations have in the first place? I understand that while the best way is always to vote with your feet, I fully realise that it will be even harder to sell a Palm property now and having to pay Club access makes a rental far less attractive.

Any chance of getting this before the DIFC Courts for a ruling as it relates to fundamentals of the originally dated sales & purchase contract. Have RERA actually issued a statement on the subject?

Believe me the further the word spreads on the pitfalls of property investment, already in Chinese media I'm told and certainly Europe.

Mark of Zoro 8 years ago

WOW WOW What a statement from the Chairman !!!!!!!!!!!!

As he is so confident that such a move is not damaging to Nakeel's reputation, let Nakeel start a new project, and see how many people flock to buy from "The Master Developer". Well Mr Chairmain, we are waiting for your move.

Chris 8 years ago

Mark of Zorro...The Chairman has announced a new project. He is going to build 500 new reefs for fish after announcing that Nakheel projects damaged traditional fish breeding areas. It seems that he has now found a way to manage to charge the fish in the future for their new facilities, which will not be announced until the fish move in!

Peter 8 years ago

The whole point is to choose your developer and community wisely. Emaar for example ,maintains a sterling reputation and realises the benefits of building long term trust for its own future. Certainly , some fees are chargeable for the upkeep and maintenance of community facilities and have the option to abstain is a great choice for the homeowner. The whole point is that the contract spells out the terms relating to what is free and what is not. Owners ought to read this before voiceing discontent. If you buy a home on a Disneyland style of property, sure you may need to pay to access some facilities. As long as the developer is giving you value for what you pay for , there should be little reason to fret.

gordon 8 years ago

I really wanted to buy when the prices stabilised..ie much lower..but now??? I am frightened to buy, I have no idea what other tricks they can come up with.

It was unheard of not to own the common areas in other countries. Here I have no idea what you own and what you dont own.

Information suppled in brochures are legal statements, here...it would appear that they are pure fiction.

Wake up and smell the roses 8 years ago

remember most people got the greed bug when it came to buying property in Dubai. We all ignored the risks and the prospect of making a financial killing was too great. Blinkers on and lets make money.

Dubai, RERA and Nakheel are still matruing organisations. Dont tell me you did not fall off your bike when you were learing to ride on two wheels. And dont tell me you did not know it would hurt when you fell.

No complaints when you were all making loads of money.

Glen 8 years ago

In other words, "International property buyers are idots" anyone buying a beachfront property on the basis of the right of free access to the beach that it sits on and then later being provided with terms and conditions that effectively remove that right would be an idiot.
Properties are being sold on Sales Agreements which do not give full disclosure, the reason for this is even expat buyers resident in this market would not sign an agreement with all the details that remove the rights usually given in the western world.