From ArabianBusiness.com 20 May 09
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Concerned Hydra Properties investors met with the company’s chairman on Wednesday but stopped short of saying it had been a success.
Sulaiman Al Fahim, the boss of Abu Dhabi-based developer Hydra Properties, met with investors to iron out a protracted dispute over imposed unit price hikes and construction delays on the company’s projects.
During the meeting Hydra Investors Group, which is made up of 185 disgruntled property buyers, called for the developer to stop demanding payments on its flagship project Hydra Village until they had received assurances the project will be completed.
Karl Howard, co-chair of the investors group, said: “The issue we are facing is investor confidence about the company situation and how much progress they have made. If they could give people that assurance it would be built and the contract wasn’t so one sided, then the problems would largely go away.”
The meetings were prompted following a live Q&A session with Dr Fahim on Arabian Business.com last week.
However, Al Fahim was more upbeat. “We’re seeing every single person who is unhappy to see what we can do. Talk to them yourself and find out the outcomes, so far we have been able to help a lot of investors. I think it is positive news,” he told Arabian Business.
One investor, Tyronne Pires, was allowed to exchange his AED1.7m one bedroom apartment at Hydra Twin Towers in Dubai for a two bedroom AED1.3m townhouse in Abu Dhabi’s Hydra Village.
“I’ve reduced my liability and exposure- frankly it’s amazing. Hats off to the guy (Al Fahim). He sat with me, he listened, he gave me options.”“Emaar and Nakheel would never have sent anyone to meet you,” Indian born Pires, who has lived in Dubai for 23 years, added.
On Tuesday the developer issued a legal notice to investors at Hydra Village threatening to reacquire units if outstanding payments were not paid.
According to reports the letter states that payments made on properties including the purchase reservation and all installments shall be forfeited if investors fail to pay the remaining amount owed.
Hydra commercial director Ahmed Khalil confirmed legal notices had been sent to a handful of defaulting investors.
Hydra Village, a large residential community development in Abu Dhabi, has been delayed by two years and is due for completion in 2011
Showing posts with label investors. Show all posts
Showing posts with label investors. Show all posts
Thursday, 21 May 2009
Tuesday, 19 May 2009
UAE investors served legal threats
From Emirates Business 247 19 May 09
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Abu Dhabi-based Hydra Properties has issued legal notices to some investors in the Hydra Village project saying their property will be re-acquired by the developer and the amount paid to reserve the units by the investors will be forfieted if they fail to pay their outstanding dues.
Hydra Village was due to be completed this year but the delivery date has been pushed back by two years.
The document sent to some investors by electronic mail says: "The unit/s allotment… stands cancelled and Hydra Properties has absolute and unfettered right over the said unit/s, including but not limited to re-sale of the said unit/s to any third party."
It says: "…your purchase reservation agreement stands terminated" and "the reservation amount and instalments paid… are deemed forfeited to Hydra Properties".
An investor, who along with others has joined the newly-formed Hydra Investors Group, told Emirates Business on condition of anonymity: "I was called by a Hydra executive last week and asked to pay the dues in the next few days or else they would take away my unit.
"The first time I received a call from Hydra was last year, but last week I was called twice. First they asked me about my situation and the next time they called to ask me to pay 50 per cent of the contract value or else they would cancel my unit.
"I never had any contract with them or any other communication about the project's progress. Now they ask me to sign a contract with clauses that are totally in favour of the developer. They are even not offering me time to review the contract."
Ahmed Khalil, Hydra's Commercial Director, confirmed that his company has sent legal notices to a few investors who had defaulted. "We are ready to help them and they can meet us by making appointments. We will be handling their issues on an individual basis. We have offered them revised payment plans and are even helping them to get finance from banks," he said.
Asked why the project was delayed by almost two years, Khalil said the masterplan had undergone changes and as a result the timeframe for completion changed to the fourth quarter of 2011.
Another investor said: "I was told that I would be given a contract as soon as I paid 20 per cent, which I handed over by April 2007. But I have never received any contract." He said he heard no word from Hydra until two weeks ago when he received a letter of termination and cancellation. "This is in spite of my repeated efforts over the past two years to get a contract and project update, which were never forthcoming. I did not, prior to this notice, receive either a request or demand for payment. I phoned the collections department and they said they were not interested in anything but that I had to pay first. Only then will they give me a contract and project update."
A third investor said he received a call last week from a collections department employee: "He said I was in default and that if I did not pay promptly I would lose my villa. And he offered to waive any penalties if I paid.
"He offered to send me the contract and asked me to sign and send it back to him with the money due. The contract never arrived."Graeme Perry, a spokesman for the Hydra Investors Group, said the e-mail asked investors to pay their dues and added that failure to do so by the specified date would result in a fine of Dh500 a day.
He said the group had advised members that any communication with Hydra in future should be conducted via a signed letter with a company seal and couriered so that all parties, including Hydra, were protected.
"We are not happy with mass e-mail demands whose provenance can neither be proved nor their admissibility in a court of law certain," said Perry."
Moreover, we have three different contract versions, which clearly shows the terms have become untenable. Version one and two require the client to forfeit 20 per cent should he or she default. Now the latest contract says 50 per cent.
"It would seem that this letter has been issued to many group members who paid reservation deposits more than two years ago for property in Hydra Village."
Karl Howard, co-chair of the group, said: "This letter has gone out to all interested stakeholders irrespective of their relationship with Hydra. Those who signed a contract but asked their mortgage lenders to halt payments until proof of construction had been provided have received them. In addition people who have never signed, nor even seen the latest contract, have also received them.
"Hydra maintained that a purchase reservation agreement that many buyers signed upon receipt of their initial reservation deposit allowed the developer to demand payment in full, said the group.
"In other words Hydra is demanding that people who have refused to sign Hydra's contract must still be held to it anyway, which is unacceptable," said Howard. "Without a signed contract we believe the law will always uphold the rights of individual.
"To complicate matters further a sizeable number of investors say they have never seen nor heard of the purchase reservation agreement, which Hydra alleges is legally obliging.
Perry said the group has three options – negotiating with the developer, taking the legal route and, finally, pleading their case before the Ruler's Court.
"We would like to hold direct talks with Dr Sulaiman Al Fahim, Hydra's CEO, and come to a mutual agreement. He showed an inclination to meet investors at a recent talk show on the radio. We are looking forward to meeting him.
"We are also considering pleading our case before the Ruler's Court. However, it is not that easy a procedure. We have some local investors whom we are talking to about this issue."
Perry said Hydra Village, which is now scheduled to be finished by December 2011, "has a six-month delay clause, which extends their time to June 2012."
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Abu Dhabi-based Hydra Properties has issued legal notices to some investors in the Hydra Village project saying their property will be re-acquired by the developer and the amount paid to reserve the units by the investors will be forfieted if they fail to pay their outstanding dues.
Hydra Village was due to be completed this year but the delivery date has been pushed back by two years.
The document sent to some investors by electronic mail says: "The unit/s allotment… stands cancelled and Hydra Properties has absolute and unfettered right over the said unit/s, including but not limited to re-sale of the said unit/s to any third party."
It says: "…your purchase reservation agreement stands terminated" and "the reservation amount and instalments paid… are deemed forfeited to Hydra Properties".
An investor, who along with others has joined the newly-formed Hydra Investors Group, told Emirates Business on condition of anonymity: "I was called by a Hydra executive last week and asked to pay the dues in the next few days or else they would take away my unit.
"The first time I received a call from Hydra was last year, but last week I was called twice. First they asked me about my situation and the next time they called to ask me to pay 50 per cent of the contract value or else they would cancel my unit.
"I never had any contract with them or any other communication about the project's progress. Now they ask me to sign a contract with clauses that are totally in favour of the developer. They are even not offering me time to review the contract."
Ahmed Khalil, Hydra's Commercial Director, confirmed that his company has sent legal notices to a few investors who had defaulted. "We are ready to help them and they can meet us by making appointments. We will be handling their issues on an individual basis. We have offered them revised payment plans and are even helping them to get finance from banks," he said.
Asked why the project was delayed by almost two years, Khalil said the masterplan had undergone changes and as a result the timeframe for completion changed to the fourth quarter of 2011.
Another investor said: "I was told that I would be given a contract as soon as I paid 20 per cent, which I handed over by April 2007. But I have never received any contract." He said he heard no word from Hydra until two weeks ago when he received a letter of termination and cancellation. "This is in spite of my repeated efforts over the past two years to get a contract and project update, which were never forthcoming. I did not, prior to this notice, receive either a request or demand for payment. I phoned the collections department and they said they were not interested in anything but that I had to pay first. Only then will they give me a contract and project update."
A third investor said he received a call last week from a collections department employee: "He said I was in default and that if I did not pay promptly I would lose my villa. And he offered to waive any penalties if I paid.
"He offered to send me the contract and asked me to sign and send it back to him with the money due. The contract never arrived."Graeme Perry, a spokesman for the Hydra Investors Group, said the e-mail asked investors to pay their dues and added that failure to do so by the specified date would result in a fine of Dh500 a day.
He said the group had advised members that any communication with Hydra in future should be conducted via a signed letter with a company seal and couriered so that all parties, including Hydra, were protected.
"We are not happy with mass e-mail demands whose provenance can neither be proved nor their admissibility in a court of law certain," said Perry."
Moreover, we have three different contract versions, which clearly shows the terms have become untenable. Version one and two require the client to forfeit 20 per cent should he or she default. Now the latest contract says 50 per cent.
"It would seem that this letter has been issued to many group members who paid reservation deposits more than two years ago for property in Hydra Village."
Karl Howard, co-chair of the group, said: "This letter has gone out to all interested stakeholders irrespective of their relationship with Hydra. Those who signed a contract but asked their mortgage lenders to halt payments until proof of construction had been provided have received them. In addition people who have never signed, nor even seen the latest contract, have also received them.
"Hydra maintained that a purchase reservation agreement that many buyers signed upon receipt of their initial reservation deposit allowed the developer to demand payment in full, said the group.
"In other words Hydra is demanding that people who have refused to sign Hydra's contract must still be held to it anyway, which is unacceptable," said Howard. "Without a signed contract we believe the law will always uphold the rights of individual.
"To complicate matters further a sizeable number of investors say they have never seen nor heard of the purchase reservation agreement, which Hydra alleges is legally obliging.
Perry said the group has three options – negotiating with the developer, taking the legal route and, finally, pleading their case before the Ruler's Court.
"We would like to hold direct talks with Dr Sulaiman Al Fahim, Hydra's CEO, and come to a mutual agreement. He showed an inclination to meet investors at a recent talk show on the radio. We are looking forward to meeting him.
"We are also considering pleading our case before the Ruler's Court. However, it is not that easy a procedure. We have some local investors whom we are talking to about this issue."
Perry said Hydra Village, which is now scheduled to be finished by December 2011, "has a six-month delay clause, which extends their time to June 2012."
Tuesday, 25 November 2008
We've got your money - and we're keeping it!
Investors rally to the cause
The National Newspaper: 24th November 2008
An amendment to a property law in Dubai has brought together a group of angry off-plan buyers who are fearful of losing a third of their investment to developers they believe may not even proceed with construction. According to the new amendment, off-plan buyers wishing to halt their payments have to cancel their contract and forfeit 30 per cent of the total value of the property, instead of only 30 per cent of the money they have paid.
The investors, who formed their group after an online forum on the issue, have yet to see evidence of construction on their projects and fear losing more of their money to developers in the current global slowdown if they continue their payments – but under the new amendment they could lose a third of their properties’ value if they do not. The new administrative circular was issued by the Dubai Land Department on Nov 10 concerning amended Law 13 on the pre-registration of off-plan properties, which was issued in August.
“Many investors have already paid 20 per cent to 50 per cent in projects which haven’t even started, hence they stopped payments in order to avoid further losses caused by possible bankruptcy of the developer,” said Tommy Carlsson, one of the organisers of the Dubai Property Investors group.
“Developers are misusing this interpretation of the law to terminate as many contracts as possible and forfeit our funds instead of finding solutions together with investors.”
Investors fear that developers who already know they cannot proceed with a project will keep the 30 per cent and then later on cancel the project without needing to refund buyers.
The group, which met for the second time on Sunday and is planning to hire a lawyer to represent them, is asking for two things. It suggests that before allowing a developer to cancel contracts, the developer must first submit the audit of its escrow to the Land Department.
According to Law 8, developers must audit their accounts, but many of them have not done this yet. “We want developers to prove they have the ability to build,” said Nigel Knight, a co-founder of the group.
Second, contract cancellations should be put on hold if the client has already paid 20 per cent and construction has not started, with the payment plan proceeding only when construction actually starts.“We see that as the responsibility of the Government to make investigations about the developers and find out whom we can trust and who is not OK. We only ask the Government to protect us,” Mr Mohammed said. “We got e-mails from a developer saying we were not allowed to form a group. Somebody even tried to hack [into] our e-mail account.”
Among the developers that investors are concerned about is Schön Properties.
“Some people paid over 60 per cent of [Schön’s] Dubai Lagoon,” said Mr Mohammed, the co-founder of the investors group who did not wish to give his family name. “People ask why they should continue to pay. The developer hasn’t even started construction of their units. The developer is saying that if they don’t continue [to pay] they will cancel the contract and forfeit their money.”
The National Newspaper: 24th November 2008
An amendment to a property law in Dubai has brought together a group of angry off-plan buyers who are fearful of losing a third of their investment to developers they believe may not even proceed with construction. According to the new amendment, off-plan buyers wishing to halt their payments have to cancel their contract and forfeit 30 per cent of the total value of the property, instead of only 30 per cent of the money they have paid.
The investors, who formed their group after an online forum on the issue, have yet to see evidence of construction on their projects and fear losing more of their money to developers in the current global slowdown if they continue their payments – but under the new amendment they could lose a third of their properties’ value if they do not. The new administrative circular was issued by the Dubai Land Department on Nov 10 concerning amended Law 13 on the pre-registration of off-plan properties, which was issued in August.
“Many investors have already paid 20 per cent to 50 per cent in projects which haven’t even started, hence they stopped payments in order to avoid further losses caused by possible bankruptcy of the developer,” said Tommy Carlsson, one of the organisers of the Dubai Property Investors group.
“Developers are misusing this interpretation of the law to terminate as many contracts as possible and forfeit our funds instead of finding solutions together with investors.”
Investors fear that developers who already know they cannot proceed with a project will keep the 30 per cent and then later on cancel the project without needing to refund buyers.
The group, which met for the second time on Sunday and is planning to hire a lawyer to represent them, is asking for two things. It suggests that before allowing a developer to cancel contracts, the developer must first submit the audit of its escrow to the Land Department.
According to Law 8, developers must audit their accounts, but many of them have not done this yet. “We want developers to prove they have the ability to build,” said Nigel Knight, a co-founder of the group.
Second, contract cancellations should be put on hold if the client has already paid 20 per cent and construction has not started, with the payment plan proceeding only when construction actually starts.“We see that as the responsibility of the Government to make investigations about the developers and find out whom we can trust and who is not OK. We only ask the Government to protect us,” Mr Mohammed said. “We got e-mails from a developer saying we were not allowed to form a group. Somebody even tried to hack [into] our e-mail account.”
Among the developers that investors are concerned about is Schön Properties.
“Some people paid over 60 per cent of [Schön’s] Dubai Lagoon,” said Mr Mohammed, the co-founder of the investors group who did not wish to give his family name. “People ask why they should continue to pay. The developer hasn’t even started construction of their units. The developer is saying that if they don’t continue [to pay] they will cancel the contract and forfeit their money.”
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