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Wed 7 Dec 2011 07:49 AM

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Palm tenants get reprieve in Nakheel beach spat

Shoreline owners told to pay service fees to Land Department, not Nakheel, as row drags on

Palm tenants get reprieve in Nakheel beach spat
The luxury Shoreline apartments on Dubais Palm Jumeirah

Tenants in Nakheel’s Shoreline development have won a
reprieve after the developer backed down on a deadline to force residents to
use new access cards to enter the building’s beach clubs.

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

Nakheel, developer of Palm Jumeirah, is locked in a dispute
with tenants over its plan
to privatise the building’s pools, gyms and beach. Homeowners
argue they own the facilities.

Dubai’s Land Department last week asked owners to pay
outstanding service charges into an escrow account it had established, and not
to Nakheel, as it moves to determine who holds ownership of Shoreline’s common property.

“Owners
are requested to pay all outstanding service fees and club house fees by means
of managers cheque made payable to the Land Department,” said a circular to
residents.

“This
will be held in an “escrow” account by the Dubai Land Department. Payment must
be made as soon as possible and no later than Dec 14, 2011.”

The
letter, dated Nov 30, is co-signed by the interim home owners association and
Dubai Land Department, and stamped by Dubai’s Real Estate Regulatory Authority
(RERA).

“It is agreed
that all shoreline residents will continue to have access to the pools, gyms,
beach, play area and other facilities on presentation of the old style access
cards,” it added.

“This
arrangement will continue until Dec 15, 2011, to allow a decision to be reached
on the issues of common property and exclusivity which are being considered by
RERA/Land Department.”

Nakheel has said it plans to charge residents up to AED5,000
a year to access the building’s pool and gym facilities and to open the clubs
up to outside members.  

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.

“The
initial discussions went well and we believe the interim home owners
association has put forward a very strong case,” one resident told Arabian
Business.

“We
believe it’s clearly common area; that’s what we were sold, that’s what we
bought and that’s what the guidelines laid down in the law actually state - that
it is common area.”

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.

Nakheel
chairman, Ali Lootah, in November said the developer was legally permitted to
privatise
the beach clubs on the project but didn’t expect tenants to be happy
with its decision. 

“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,” he added. “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.”

Andy 7 years ago

These fee all add up to more than what the average person pays in Taxes if they owned a home in California and when I say more I mean a whole lot more. So much for being a tax-free Emirates.

daud Al Zainey 7 years ago

I can't believe that the comments attributed to Ali Lootah, Nakheel Chairman are correctly reported. I read the contract and The Shoreline Apartments Brochure which formed part of the contract Specification set out that each block of 4 apartments have their own exclusive Beach Club. It even set out the specification for the pool.

If he read the contract and checked legally how could he have come to his conclusion. He also said that he obtained regulatory approval, not that any regulator can deprive owners of their contractual rights. Now that RERA have stepped in and stood up to Nakheel it shows that there can't have been any such regulatory approval.

If Nakheel abided by the law and respected the law and the contractual rights of investors, why haven't they refunded customers money on projects that have been "deferred", that are years past their delivery dates?

Craig 7 years ago

@ Andy, clearly misled if you believed Dubai, or any other part of the world is "tax free" however that aside, without reading the purchasers individual contracts, i very much doubt it states what the purpose of and who owns "common areas".

I hope the purchasers or owners win this argument. It would be wrong to exploit "common areas" in this way

Shoreline 7 years ago

If the beach clubs really belong to Nakheel, then why have the Shoreline owners been forced to pay for their maintenance and upkeep for the last 4+ years? Why isn't Nakheel offering to refund those funds before asking for more cash?

Sid 7 years ago

I am an owner in the Shoreline development and I have read my Sales and Purchase Agreement from cover to cover. The definition of Common Property in my contract is as follows: "Common Property means those parts of the Building ... which do not physically form part of the Units in the Building and are intended for the benefit or use in common by all unit owners, including within such definition all open areas, common access areas, and the foundations, structure, roof lift shafts, walkways, corridors, and lobbies of the Building, and (if any) the gym, swimming pool and portions of the common motor vehicle parking areas, berths, canals, waterways and leisure facilities."

It clearly states that the swimming pools, gyms and leisure facilities are part of the Common Property which are therefore owned by the owners and not Nakheel.

ChrisL 7 years ago

It appears from the definition you've provided that the common areas are only "for the benefit or use" by unit owners. I don't believe this constitutes ownership but merely grants access.
Unless it states specifically in your agreement that common areas belong to the owners, I think Nakheel may be able to interpret from the given definition that they were simply granting access to the owners free of charge and have now decided to charge for the privilege.