Dubai: A group of small investors who put their life’s savings in the Lakeside residential apartments at the International Media Production Zone (IMPZ) are demanding a refund alleging that the developer Damac has inordinately delayed the project and committed other “contractual violations”.
Dubai-based investor Ritu said: “We are a group of around 30 small investors who put money in the Lakeside development in 2007 and were advised that the property would be ready in early 2009. Damac took 40 per cent of our money and breached the UAE law and the contracts, which they gave us, due to delays. Nothing happened on the construction front till late 2011 and despite many attempts in asking for a refund in line with the law, the developer is not ready to adhere to its contractual obligations.” Ritu said she paid Dh290,000 for her one-bedroom apartment, which was quoted at Dh720,000 at the time of the sale.
Another investor Sarmad M. Qureshi said the value of the apartments in the building have fallen by more than 50 per cent due to delay in construction. “My sources have confirmed with the Dubai Land Department that the property has not been registered in accordance with the terms of Law No. 13 of 2008.”
He said: “If the developer as well as the Land Department never reply, pick up phones or respond to e-mails and faxes, where will small investors go? On top of it, courts ask every investor individually to pay heavy amounts and don’t accept group payment for one case or one project. Lawyers don’t talk unless we pay them, so where will small investors who have deposited their life-time savings go?”
Investors from the UK said they do not know how to get their concerns addressed as Damac has shut its office in London. “So this means that as investors from the UK, we have no right to apply UK law as the offices were closed. Very clever move by Damac indeed!”
“Another clever move is that although they did not register our flats as per Law No 13 within the proposed 30 days or so and long delays were caused, many of us requested cancelling the contracts and asked for a refund … Dubai Land Department won’t authorise any refund unless Damac signs the relevant documents or alternatively we go via the courts which won’t accept group litigation ...”
Imran Khan, also from the UK, said: “We are small investors and were looking to make a safe investment with Damac as it is such big organisation. But, this was not the case and we do not know what is happening.”
Investor Priyesh Patel said: “Property investors in Dubai will be eligible for cancellation of their contracts and may seek “full” refunds if the real estate developer fails to provide the promised unit or services within a specific time frame, according to the proposed new Investor Protection Law.”
Niall McLoughlin, Senior Vice-President, Damac Holding Co, told XPRESS: “This project has most certainly been registered with the Dubai Land Department and this can be verified directly on Rera’s website. All NOCs and permits were issued in accordance with local regulations.”
He said: “This project, which consists of four buildings, is progressing well despite infrastructure challenges. The main contractor is making steady progress and Tower A has reached the 20th level with block work to level 14. Tower B has reached the 21st level with block work to level 15. Tower C has reached level 19 with block work to level 14 and Tower D has reached level 19 with block work to level 13. All plastering is in progress up to level 13. Interiors and MEP works are progressing well and we anticipate handover to commence in third-quarter 2013.”
“As a developer, we are not in control of market valuations and are not responsible for decreased valuations of a property investment. This is a market risk associated with any real estate purchase globally. As a leading developer in the region, we are totally committed to all our projects and have completed 37 buildings to date and have a further 65 buildings at various stages of progress across the Middle East and North Africa region,” he added.