It appears that Dubai developer DAMAC has been selling off-plan units in a Dubai development called Lotus before it has title to the land. The UN is currently the tenant on the land and the UAE government outlawed the practice of selling prior to gaining title last year.
A Dubai-based lawyer who appeared in UK broadcaster Channel 4’s investigation into Damac Properties has spoken out over the developer’s controversial decision to sell off-plan units on a site occupied by the UN. On Monday night, Channel 4 News aired a special report on the Dubai property market featuring disgruntled Damac investors. One investor said he was not informed that the UN (United Nations) were tenants on the land which Damac intend to develop.
Dubai-based lawyer Ludmila Yamalova, a partner at Al Sayyah Advocates, who featured in the eight minute television report, told Arabian Business: “As far as the Lotus project was concerned, they had launched and sold a project on a plot of land on which there is an existing building occupied by tenants, so I find it highly questionable that they had all the necessary approvals and licenses in place as required by law in order to launch the project.”
This comes less than two weeks after Arabian Business exclusively revealed the Damac UN controversy. Retired UK lawyer Jeff Kershaw is preparing legal action against the developer, and has accused the company of ‘recklessly’ selling off-plan property on a site, which it knew the UN had a tenancy agreement on. Channel 4 obtained documents showing that Damac had been selling off-plan units on the Lotus plot when it was not in possession of the land. The broadcaster alleged that the developer had been selling off-plan property on 21 of its developments before it had possession of the land - a practice outlawed by the Dubai government last August.
It is understood Damac will receive the title deed to the Lotus plot when it has paid the last installment to master developer Dubai Properties.
Earlier in the month Damac told Arabian Business that it owned the land at the Lotus site.
A spokesman for Damac said on Wednesday: "Damac Properties has adhered to all regulatory regulations in regard to The Lotus. The land for the Lotus Development was purchased by Damac Properties, from Dubai Properties, at public auction. "The land and all of the units sold are pre-registered with the Dubai Real Estate Regulatory Authority (RERA). As per the industry standards, DAMAC has been issued the pre-registration certificate by the Dubai Lands Department that turns into title deed at the appropriate time.
"The Real Estate Regulatory Authority’s (RERA) Article 4 of Law 13 states: “No master developer or sub-developer shall commence a project or sell its units off plan before taking possession of the land on which the project is to be built and obtaining the necessary approvals from the competent authorities in the emirate.”