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EXCLUSIVE: Nakheel’s Lootah talks tough on service fee saga
“[Nakheel is] going to chase [its] money right and left. Nakheel cannot afford (not) to,” its chairman Ali Lootah tells Kipp’s Eva Fernandes exclusively.
January 29, 2012 6:37 by Eva Fernandes
The long drawn out and much publicised Shoreline apartment service fee debacle could very well become a reality for tenants in other Nakheel developments including Discovery Gardens and International City, Ali Lootah, Chairman of Nakheel told Kippreport earlier today.
“[Nakheel is] going to chase [its] money right and left. Nakheel cannot afford (not) to… What should I do? Just keep quiet on my money and not collect my money because of the negative (attention)? It is a serious issue, how can we continue servicing them if they don’t pay?” said Lootah in an exclusive to Kipp. “We are following all of our communities—Discovery Gardens, International City –but we focused on our Shoreline Apartments because it was big amount and some of it was outstanding from 2008.”
Since last month, Nakheel has blocked beach and pool access to those tenants residing in those Shoreline Apartments on the Palm Jumeirah that have not paid their service fees. The move came as part of a bid to collect Dh72 million in unpaid fees.
Since the ban, Nakheel has collected 40 percent of what is owed to them, the chairman said. Effective as the measures might be, it also attracted a lot of negative press for Nakheel, including reports of tenants calling the police to unlock doors.
“We are just using the soft approach actually, we can go much tougher (…) all we’ve done is cut off the access to the beach. The residents still have access to their apartments, they can still live in their apartments. We haven’t done anything as drastic as other communities—some who have switched the AC off—no, we have been more patient” said Lootah.
While the real effectiveness of Nakheel’s tough love strategy perhaps remains to be determined, an unfortunate victim caught in the middle of this rather ugly dispute between the developer and the owner is the tenant. Tenants, for example, who have paid their entire rent for a year in one go, have found themselves denied access to the beach and pool because their landlord has not paid the service fee.
Lootah, though sympathetic towards these tenants, is unrelenting:
“I was personally astonished that so many tenants did not check the service fees [before signing the lease]…Why do people go out and get a clearance of DEWA bills and not get a clearance on Nakheel service charge? It doesn’t make sense to me.”
“Tenants should be careful. What can you do? They didn’t do their due diligence, or they were shy to ask these questions… If I was in their place I would ask my landlord, please confirm that the service charge has been paid.”
Perhaps, tenants were not aware of the service fees? “I don’t think the tenant is so naive. Why didn’t they ask? Why didn’t they check?” says Lootah, pointing out that Nakheel is not the only developer in Dubai charging a service fee—a standard for special developed areas in Dubai. As precautionary measure for future tenants, Nakheel has now set up a new facility which allows a potential Shoreline renter to phone Nakheel to verify whether the service fees for the particular apartment of their interest has been paid or not. Essentially the onus is on the tenant to check before signing the lease.
The real culprit in this story, Lootah says, is the landlord: “It is the landlords who are not living here (who) are to blame…Let’s not forget, it is a business. Landlords are collecting rent. They are collecting money. It is just greed. They just don’t want to pay part of that as service charge. It is not that apartment is empty-no, they are collecting rent. Where is the money going?”