New row erupts over Dubai Lagoon investment

Project developer says it cannot reschedule payments, despite call by real estate regulator.
New row erupts over Dubai Lagoon investment
By Claire Ferris-Lay
Tue 16 Sep 2008 09:19 AM

Schon Properties has denied payment re-scheduling is under consideration for its Dubai Lagoon investors, despite comments from a senior legal advisor from Real Estate Regulatory Agency stating otherwise.

RERA’s Khawla Madani told investors that payment schedules should be aligned to construction timetables, and that RERA was working towards this with Schon, according to 7 Days on Tuesday.

However, the Dubai Lagoon project is now scheduled to finish construction in phases across 2010 to 2011, and investors remain on payment plans based on previous construction schedules.

“They’re refusing to re-schedule, even though it makes clear sense. If you’re going to give me my apartment in 2011, why should I pay you in 2009?” said investor Jamal Sirhi.

Schon also said that payments for the project are paid into the escrow account, set up after the project began. Sirhi claims that he had given post-dated cheques (PDCs) made out to Schon before the escrow was established, and could not get these returned.

“I asked Schon about the [PDCs] and they refused, saying the only way you’ll get them is if RERA issues us an official letter stating that this person can get his PDCs back.”

Schon told 7 days it could not re-schedule. “For a number of reasons, this would result in further delays for the project, which, for the sake of our investors, we cannot allow to happen”.

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