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Mon 22 Jun 2009 01:15 PM

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Tenants threaten legal action against Nakheel

EXCLUSIVE: Discovery Gardens residents say service charge has not been reduced enough.

Tenants threaten legal action against Nakheel
LEGAL ACTION: Residents of Discovery Gardens demand Nakheel lower its service charge further.

Tenants and homeowners in Dubai’s Discovery Gardens have threatened legal action against Nakheel unless “exorbitant” service charge fees are further reduced.

The Dubai-based master developer announced on Monday it was lowering the service charge by AED5 per square foot.

The new rate, which has been formally agreed with the Real Estate Regulatory Agency (RERA), will also be backdated to January 1, 2009.

Despite this reduction residents say they are still paying far more than tenants in similar developments across the Emirate.

Michael Aldendorff, who is leading a petition signed by 68 residents, said: “We’re not going to accept and we won’t pay unless it’s under AED13. Nakheel is hoping this will go away but it’s not going to happen.”

Aldendorff, who bought a one-bedroom apartment iin Discovery Gardens in March 2007 and moved in in August last year, said he has consulted lawyers about suing Nakheel, a number of which said they are happy to take on the case.

“We’re all prepared to foot the legal bill, but first we want to give Nakheel the chance to come to the party,” he said.

Tenants in Discovery Gardens were originally paying between AED18-19 per square foot service charges, Aldendorff said.

With the new reduction the total comes down to between AED13-14. On top of that residents must pay cooling charges of about AED11.

Aldendorff said tenants in The Lakes typically pay about AED7 per square foot in charges, while those in The Greens pay between AED13-15 per square foot, but this includes maintenance and cooling charges.

Residents also complained they are paying for swimming pools which have yet to be finished.

In a statement on Monday Nakheel said service charges were set according to projected costs and all accounts were independently audited.

Any rebates will be credited against next year’s service charge, which begins on October 1, 2009.

Abdulrahman Kalantar, managing director of Nakheel Asset Management and Design (NAMAD), said: “When we first set the service charges for Discovery Gardens, they were based on our best estimates for this new Nakheel community.

“Following a lengthy review, we have been able to take advantage of recent reductions in the cost of goods and services, which has in turn reduced our overall service charge budgets.”

Sutter Kane 10 years ago

They should reduce the fees to 10 dirhams/annum, because right now they don't provide any maintenance at all. Imdat, the company they've made a deal for maintenance, employs incompetent and lazy technicians.

Saiyed 10 years ago

Folks why did you guys purchase it in the first place that you are all crying now. My suggestion to all of you is to sell of your properties and make as many units empty as possible and bring the property market down on its knees. We have suffered enough. Start dumping your properties on sands of Dubai

Property Guru 10 years ago

I am one of the owners suffering and talking to nakheel, but at the same time there should not be any kind of hostility. The community is good and Nakheel should be complimented for that. Issues can be discussed and be resolved by mutual negotiations. Dubai as a whole and Nakheel as part of it has lost its competitiveness and sense of reasonable practice due to real estate boom and flood of excess money supply. I am sure good sense will prevail again as the cause of the problem (excessive money) has finally dried up. Yes, we were all buying papers and no one bothered to even read them. The contracts were given after one year of purchase and cheque receipts were good enough proof of ownership. Despite all this, there is no match to Dubai. After all overcharging service charges is not as big issue as Madoff frauding pension funds US $ 50 billion and regulators just letting it happen. Best of bankers and wall street Gurus creating "Sub prime" as a banking product and AIG failing to protect itself forget taking care of millions of people who trusted them for insuring their future. I can say millions of times that UAE leadership is much better than currupt politicians of democratic countries.

N 10 years ago

I own an apartment in Discovery Gardens and have been talking to people at Nakheel on my own about the same issues. Now that there's a petition and a group of people who have the same concerns, I'd very much like to sign this petition! If I knew I was going to be ripped off like that I'd have never bought the apartment in the first place.

Rakesh Nair 10 years ago

I paid for 1B/R apartment maintenance charge + Cooler charge AED 35K and I will not pay this next year.. Also my apartment is leaking no one turn up after getting the reference number for more than 2 months. I want the contact details to join that community by Michael Aldendorff, who is leading a petition signed by 68 residents. I think the petition need to be signed by all residents in the DG. I'll work in front line for this.. “We’re not going to accept and we won’t pay unless it’s under AED13. (Including chiller charges)”... I totally agree.

RA 10 years ago

I am one of the unlucky ones who bought two apartments (one for self use and one for rental income) and held on to them with a long term view. I bought 2 because I could afford them, not to flip them like majority of the players in Dubai were doing. Nakheel Maintenance charges and district cooling charges are a real RIP OFF. We pay a total of DHS 30 per sq feet, as maintenance charge, community charge, district cooling charge. I would not have put my hard earned money into this place if I had known that we will be ripped off in this manner. Now I am paying the price for being a long term investor in Dubai properties! May be I would have been better off if I had sold the properties when I had 100% appreciation. Please let me know whom should I contact for joining this group of Discovery Gardens Owners. I am willing to share the legal costs.

A_A_K 10 years ago

Hi Saiyed, I like your suggestion but please tell me to WHOM should we sell our units to? Where do we DUMP our properties? Cheers

Sutter Kane 10 years ago

Ra, you can send and email to they have a mail group. There is also a facebook group called I bought a proprty from discovery gardens and I was ripped off. You can follow the updates from there as well

rayomand 10 years ago

Thats the fact. All these reputed builders are doing to their tenants. Even after paying this amount you are not sure when they will again increase it or come out with another charge. Moral of story, never buy property in UAE even if it is from reputed builder

MAX 10 years ago

Nakheel's service charges are daylight robbery!! not only in DG but also in other developments such as International City(IC). I am paying around AED12/sq.ft for a 1B/R flat in IC. There is no swimming pool, no childrens play area, no greenery. Some trees/lawn planted last year but no maintainence at all. trees all dried off. Lawn is grown now more than 3ft in hight no maitainence at all. Sewage from buildings is leaking and nobody is bothered to fix it. IC has become an labour accomodation. All labourers no families. In our building there is no corridor light, staircase lights, no security. I have complained so many times but in vain. All calls on dumb ears! When it comes to collect money as service charge there are forefront but to offer service nobody is there.