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.
Source: ArabianBusiness.com
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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.”
Showing posts with label developer. Show all posts
Showing posts with label developer. Show all posts
Thursday, 30 July 2009
Wednesday, 15 July 2009
Hard-pressed developers force buyers to complete the sale.
From Travel Daily News International 14 July 09
Developers chasing purchasers to complete the sale of a property. A story that's only too familiar in recent times in Dubai but now its happening in Spain.
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Britons who have had second thoughts about buying holiday homes in Spain are being pursued in the Spanish courts by the developers - despite a clause in their contract allowing them to back out of the deal, law firm DWF has warned.
The firm is acting for a number of British buyers who have been threatened with legal action. It says hard-pressed Spanish developers who have been left with a stock of unsold properties on their hands are now trying to take court action to override the terms of their contracts and force buyers to complete the sale.
Antonio Guillen, a Spanish lawyer with DWF in Manchester, explains: “During the property boom, Spanish developers were so confident of selling their homes that they included a clause in the contract allowing purchasers to pull out provided they forfeited their deposit. In fact, having a sale fall through was good news for developers - the property would usually be sold to the next person in the queue and they received an extra lump sum.
“Given the current economic climate, the weak pound and the oversupply of properties in certain areas of Spain, some British buyers who had invested in a property off-plan have had second thoughts and resigned themselves to losing their deposit. However, now the property market has collapsed, developers have changed their strategy. Some are trying to use a clause in Spanish law to allow them to override the terms of their contracts and force purchasers to complete.”
The developers claim that section 1124 of the Spanish Civil Code gives them the right to choose between enforcing the obligations under a contract or allowing it to be terminated – in this case, letting buyers back out and pay the penalty. According to Antonio Guillen, it is difficult to predict the tone the Spanish courts will take until the first judgments start to come through.
However he stresses the individual circumstances of each case need to be considered - such as whether there has been any breach of contract from the developer, for example late completion, and whether the purchaser is a private individual or an investor - someone buying more than three properties.
He says: “The developers’ approach contradicts the contracts they signed only a few years ago and is against the principles of contractual obligations. Some are even threatening purchasers with legal action in the UK, but omitting to say that they cannot do this until a final judgment has been obtained in Spain. At the current pace of Spanish justice and allowing for an appeal, this could take two to four years, by which time the developer could have gone into administration. It would also be very costly for them to pursue cases outside of Spain.
“We do not want to imply that all threats from developers should be considered a bluff and that completion should be rejected at all cost. Each case is different. In some cases there will be insufficient legal grounds to fight the case and it may be better to complete and in others, to dispute any claims. Anyone in this situation should consult a qualified Spanish lawyer who can advise on the best course of action.”
Developers chasing purchasers to complete the sale of a property. A story that's only too familiar in recent times in Dubai but now its happening in Spain.
==================
Britons who have had second thoughts about buying holiday homes in Spain are being pursued in the Spanish courts by the developers - despite a clause in their contract allowing them to back out of the deal, law firm DWF has warned.
The firm is acting for a number of British buyers who have been threatened with legal action. It says hard-pressed Spanish developers who have been left with a stock of unsold properties on their hands are now trying to take court action to override the terms of their contracts and force buyers to complete the sale.
Antonio Guillen, a Spanish lawyer with DWF in Manchester, explains: “During the property boom, Spanish developers were so confident of selling their homes that they included a clause in the contract allowing purchasers to pull out provided they forfeited their deposit. In fact, having a sale fall through was good news for developers - the property would usually be sold to the next person in the queue and they received an extra lump sum.
“Given the current economic climate, the weak pound and the oversupply of properties in certain areas of Spain, some British buyers who had invested in a property off-plan have had second thoughts and resigned themselves to losing their deposit. However, now the property market has collapsed, developers have changed their strategy. Some are trying to use a clause in Spanish law to allow them to override the terms of their contracts and force purchasers to complete.”
The developers claim that section 1124 of the Spanish Civil Code gives them the right to choose between enforcing the obligations under a contract or allowing it to be terminated – in this case, letting buyers back out and pay the penalty. According to Antonio Guillen, it is difficult to predict the tone the Spanish courts will take until the first judgments start to come through.
However he stresses the individual circumstances of each case need to be considered - such as whether there has been any breach of contract from the developer, for example late completion, and whether the purchaser is a private individual or an investor - someone buying more than three properties.
He says: “The developers’ approach contradicts the contracts they signed only a few years ago and is against the principles of contractual obligations. Some are even threatening purchasers with legal action in the UK, but omitting to say that they cannot do this until a final judgment has been obtained in Spain. At the current pace of Spanish justice and allowing for an appeal, this could take two to four years, by which time the developer could have gone into administration. It would also be very costly for them to pursue cases outside of Spain.
“We do not want to imply that all threats from developers should be considered a bluff and that completion should be rejected at all cost. Each case is different. In some cases there will be insufficient legal grounds to fight the case and it may be better to complete and in others, to dispute any claims. Anyone in this situation should consult a qualified Spanish lawyer who can advise on the best course of action.”
Thursday, 25 June 2009
Investors form action group against Dubai developer
From ArabianBusiness.com 25 June 09A group of investors are locked in a dispute with Dubai developer ACW Holdings after significant delays to its projects. Investors, some of whom have paid up to 80 percent of installment payments on units, have written to Dubai property watchdog RERA (the Real Estate Regulatory Authority) demanding a refund and cancellation of ACW’s projects over fears they may not be completed.
Around 85 property buyers have formed an action group called ACW Investors.
Some have refused to sign contracts, which they consider to be unfairly drafted in favour of the developer.
One such investor is UK-based Chandra Kumar, who bought at ACW’s Hanover Square project in November 2007 and has paid 70 percent of installments. He said: “To date I have paid nearly 70 percent of the purchase price with nothing to show in return. The project is little more than a hole in the ground.”
"The contract is unreasonable. They are holding money and demanding money. I’ll see no return on my investment for three years- I want my money back,” he added.
Although the developer has insisted its payment plans have been changed and are now linked to construction progress, some investors complain they are still being instructed to pay date-based installments.
Only excavation work and no formal construction has started at five of ACW’s projects in the Arjan and Jumeirah Village districts in Dubai. (A photo taken earlier this month of the site is shown.)
A sixth project called Platinum Two is severely delayed due to a proposed road through the site by the Roads and Transport Authority (RTA).
“In the present economic climate it is easy for investors to feel nervous about their investment in Dubai. We as a company made the decision to focus all of our resources on construction,” the company said in an emailed statement to Arabian Business.
”We are in the business of building, and that is precisely what we are doing,” the statement added.
The developer blamed the late handover of plots from master developer Nakheel for the delay on its Jumeirah Village projects, which include residential schemes Kensington Manor and Knightsbridge Court together with Hanover Square, a serviced apartment project.
Scott Richards, director of client services at ACW said that apart from Platinum Two, the bulk of the company’s projects will come online by the middle of 2010, although the developer’s website states most schemes will be completed in the first quarter of 2010.
Hanover Square was originally scheduled for delivery in May 2009, according a Sales and Purchase Agreement seen by Arabian Business. But clause 2.4 of the contract states: “The Handover Date may be extended by the Seller for any Period or periods up to a maximum of one year.” In an email to one ACW investor in May, Essa Saeed Al Mansoori, head of the trust accounts section at RERA, said ACW’s projects were undergoing a "technical audit".
A spokesman for RERA said: “ACW is a registered developer and has five projects in Dubai and escrow accounts set up for each one and through which funding for all these projects is financed.
”ACW was established in 2004 and has two UK offices in London and Leeds as well as its Dubai operations in Emaar Business Park and Jebel Ali.
The company has launched seven freehold developments since 2006 with an asset value of AED5bn, according to its website.
Around 85 property buyers have formed an action group called ACW Investors.
Some have refused to sign contracts, which they consider to be unfairly drafted in favour of the developer.
One such investor is UK-based Chandra Kumar, who bought at ACW’s Hanover Square project in November 2007 and has paid 70 percent of installments. He said: “To date I have paid nearly 70 percent of the purchase price with nothing to show in return. The project is little more than a hole in the ground.”
"The contract is unreasonable. They are holding money and demanding money. I’ll see no return on my investment for three years- I want my money back,” he added.Although the developer has insisted its payment plans have been changed and are now linked to construction progress, some investors complain they are still being instructed to pay date-based installments.
Only excavation work and no formal construction has started at five of ACW’s projects in the Arjan and Jumeirah Village districts in Dubai. (A photo taken earlier this month of the site is shown.)
A sixth project called Platinum Two is severely delayed due to a proposed road through the site by the Roads and Transport Authority (RTA).
“In the present economic climate it is easy for investors to feel nervous about their investment in Dubai. We as a company made the decision to focus all of our resources on construction,” the company said in an emailed statement to Arabian Business.
”We are in the business of building, and that is precisely what we are doing,” the statement added.
The developer blamed the late handover of plots from master developer Nakheel for the delay on its Jumeirah Village projects, which include residential schemes Kensington Manor and Knightsbridge Court together with Hanover Square, a serviced apartment project.
Scott Richards, director of client services at ACW said that apart from Platinum Two, the bulk of the company’s projects will come online by the middle of 2010, although the developer’s website states most schemes will be completed in the first quarter of 2010.
Hanover Square was originally scheduled for delivery in May 2009, according a Sales and Purchase Agreement seen by Arabian Business. But clause 2.4 of the contract states: “The Handover Date may be extended by the Seller for any Period or periods up to a maximum of one year.” In an email to one ACW investor in May, Essa Saeed Al Mansoori, head of the trust accounts section at RERA, said ACW’s projects were undergoing a "technical audit".
A spokesman for RERA said: “ACW is a registered developer and has five projects in Dubai and escrow accounts set up for each one and through which funding for all these projects is financed.
”ACW was established in 2004 and has two UK offices in London and Leeds as well as its Dubai operations in Emaar Business Park and Jebel Ali.
The company has launched seven freehold developments since 2006 with an asset value of AED5bn, according to its website.
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