Dubai: Investors in Omniyat Properties' The Square say apartments for which they have paid half the purchase price are being occupied by other tenants.
The leasehold residential project in Al Mamzar comprises 544 units. Fifty investors representing more than 200 units gathered there on Wednesday to dispute the ownership of their units, investors say.
Omniyat disputes the numbers, saying there are only 32 investors representing 107 units.
The majority of investors have paid 50 per cent of the total amount. Under the contract, The other half was due after handover.
"We have just come here to check on our apartment, and have found that Omniyat has started leasing out our units on a rental basis," Gholam Reza, an investor at The Square, told Gulf News.
This follows a dispute the investors had with the developer in August over new contracts that were issued after the original contract was agreed upon and signed. The new contracts include a mortgage agreement, leasing tenancy contract, property management agreement and a deed of adherence, which differ from the mutually agreed original contract.
According to Omniyat, the contracts issued initially were valid for only a year, in line with the Land Department's regulation.
"The contract was created three years ago. [Legislation has] changed in Dubai since then, so we've had to... adapt the contract to protect the investors," said an Omniyat spokesperson in a previous interview.
Investors dispute the contract clause Omniyat used to unilaterally change the agreement to reflect the current real estate market, developments and legislation.
They cited the Federal Civil Transaction Law, which states that neither party can amend a signed contract except by agreement or litigation.
After being issued termination letters, Mohammad Bhopalwala, an investor who has paid the full amount but has so far refused to sign the new contracts, also found his apartment leased to new tenants.
"Omniyat can't rent out a property that we have fully paid for," said Bhopalwala.
According to Omniyat, each customer has been served with three to four notices of termination.
"We have the full rights by the relevant authorities to terminate their contracts as they are not meeting their obligations. As per the contract, if an investor defaults they will lose the right to the property," said the Omniyat spokesperson.
According to the Dubai Property Law, a contract can be terminated after 30 days of notice with the approval of the Land Department. However, it is unclear whether this applies to leasehold developments.
According to Osama Aborayah, a legal consultant at Accord International, the lawyer representing the 50 investors, a contract cannot be terminated if the other party disputes the termination.
"They are making termination by themselves, and according to the law they cannot terminate without the other party's acknowledgement. As the other party did not accept the termination, they went to arbitration," said Aborayah.
The investors claim that the cheques are being cashed when the contract states that the cheques will only be cashed three months after the handover date.
"They have cashed our cheques, when [they] previously told [us] they will cash our cheques after 3 months from handover of unit," sad Aborayah.
However, according to Omniyat, the leasehold interest purchase agreement states that the post-dated cheques are payable three months after completion, not handover.
The completion date is defined in the agreement as when the "unit is ready for occupation.
Entitled
"Accordingly, we are fully entitled to encash cheques in accordance with the payment schedule and the agreement," said the Omniyat spokesperson.
According to Omniyat there is still an opportunity for investors to retrieve their property if they meet their obligations.
"Even now, if they meet their obligations, they can have the property handed over to them along with the rent paid by the current tenants residing in it," said the Omniyat spokesperson.
"Omniyat will be happy to accommodate the investors if they comply with their contractual terms and conditions."
