The plot thickens: drama in Dubai’s property sector
Kipp’s exclusive with Nakheel’s Ali Lootah has inspired a rich debate around the role of developer, tenants, home owner, regulatory authority. Which side do you stand?
January 31, 2012 4:09 by Eva Fernandes
It is hard to deny that property-related articles from Kippreport tend to carry an implicit investor/home owner point-of-view. Which is why, it was interesting to read the backlash from our readers when we posted a few snippets from our exclusive interview with Nakheel chief Ali Lootah concerning the service fee debacle at the Shoreline Apartments on the Palm Jumeirah.
For his part, Ali Lootah was candid and unabashed with the company’s standpoint on the issue: “[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?” Lootah named Discovery Gardens and International City to be among the next communities Nakheel will be targeting to collect its dues.
Understandably, Lootah’s comments garnered a wide gamut of responses from home owners, tenants and observers of Dubai’s real estate market alike. Kipp has really enjoyed the rich discussion our readers have been engaging in and we want to take it one step further.
The question of service fees at the Shoreline Apartments is multi-faceted. Though their comments may vary, every member of the equation has a bitter complaint to air. And for every comment, another layer to the already murky issue is added.
For instance, some tenants do not think it is fair for landlords to put them in a fix with the developer. Kipp reader Ronman told Kipp:
“Homeowners cannot go on a keep putting unsuspecting tenants in a bad fix just because they do not agree what the developer is doing… However the criminality of tenants being left without services and facility access lies in the Landlord’s hands… I’m a tenant who’s landlord has paid his fees to the T, yet the developer is failing to pay DEWA, and the latter is threatening to cut the power, all because a lot of other Landlords are not paying…. Tenants should do their due diligence I admit, but they can do it for one apartment, not the entire tower!”
Ronman brings up an interesting point concerning the responsibility of home owners to pay up—the counter argument to which, is best articulated by Kipp reader Nancy Smith who says:
“Homeowners are withholding their service fees because Nakheel has failed – for years! – to maintain the properties. They are paying for nothing! (…) This means homeowners paid service fees for nothing. People are withholding their money for good reason!”
Another argument being made in favour of the homeowner comes from Kipp reader Ben, who argues a lack of transparency and disempowerment of Home Owners Association has led to the developer usurping fees he claims do not belong to Nakheel:
“Nakheel is collecting on behalf of owners the money because they refused so far to register the HOA. They have appointed them self as the Manager and service providers for the place. Nakheel has an obvious conflict of interest shown by the poor services while over charging for SC’s. The money collected belongs to the HOA for the upkeep of the building and not for Nakheel to use as they wish.”
Phew! The more Kipp dwells into the Shoreline issue, the more acutely aware we become of just how complicated it really is. In this complex tug-of-war, it’s amazing this squabble has been allowed to escalate to this level. Where is the unbiased third party that should have been helping put down some regulations and protocols when it comes to these issues? Where is the referee?
We’re hoping to bring some clarity to this issue. And as such, we continue to stay interested in what our readers have to say. Are you property owner or a tenant? What role do you think RERA has to play? What is the best way forward? Tell us your story and perspectives in the comments section below or send them to firstname.lastname@example.org.