Enough! Can we get some investor-protection already? (Updated)
Eva Fernandes is beyond disappointed with the lack of investor protection in Dubai. When are things going to change around here?
March 23, 2011 5:26 by Eva Fernandes
Or take for instance the frustration Faizan Rashid, an investor in the Mazaya development Liwan Queue Point, who told Kipp: “Developers in Dubai usually do not understand that communication is key when dealing with investors who have to plan their savings accordingly. Mazaya Holding, the developer of the investment I had put money into, would only send me construction updates only when requested (they have since resorted to inconsistent monthly updates). (…) Practices like these, dubious as they are, reduce the confidence that investors put into these developers.” Rashid regularly meets with other Liwan Queue Point to discuss the plans of action.
Reduce the confidence of the investors? I would like to go one further and say that not only does such irresponsible actions reduce the confidence of the investors, but so too do they increase the frustration of these investors.
That the property market has taken a turn for the worse is an unavoidable fact that neither investor nor developer have control over. The fact then, that as a result of the crash, property prices have dramatically dropped, construction has slowed down and money is less easily available is also something that both developer and investor need to accept. When I speak to property investors in Dubai, they recognise this rather harsh reality of the situation, and all they’re asking for us a little transparency.
Consider the case of Tony Hynes, an Irish investor, who has told us about his frustration with communicating with Dubai developers and development authorities.
In an email statement, Hynes told Kipp: “This is the message I want to get across. Listen to us. We are reasonable and practical people. We understand that the property market has collapsed and that values of property have decreased dramatically. We can take these decreased values on the chin. We understand that if a development company does not have the money to give it back then we cannot get it. You cannot get blood out of a stone. We just want to be sure that no fraud has taken place by our developer before we go forward. We are also aware that the legal system in Dubai in relation to real estate is not very mature however it does seem to be developer biased. This is unfortunate as we are equal partners in these developments.” Hynes is a member of the Dubai Action Group, a group of 200 Irish investors who have invested in developments within the UAE, including Sports City and The World.
There needs to be some kind of dialogue started between the two sides to agree on price reductions or property swaps or any other solution that can find a way to compensate investors for their lost money without financially breaking the developers. If these initiatives do not come from the developers then they should be enforced by RERA. Quick action to ensure that investor do not completely lose confidence in investing in the Dubai property market will prove to be not only a short-term legal boon but also in the long run will help maintain a good share of those investors considering investing in Dubai.
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