Property | UAE

UAE investors: 'Compensate us for cancelled projects'

Judicial committee called for to help oversee liquidation of cancelled projects

  • By Sarah Algethami, Staff Reporter
  • Published: 19:15 August 18, 2013
  • Gulf News

Dubai: Property investors in emirates outside of Dubai have lamented the financial losses they have incurred from delayed and cancelled projects, and some would like to see a panel set up to oversee the liquidation of cancelled projects.

Last month, His Highness Shaikh Mohammad Bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, issued a decree to set up a judicial committee to liquidate cancelled real estate projects in Dubai. It will provide settlements, resolve grievances and address procedural issues.

“Investors in Ajman properties say the same scheme should come up for Ajman properties,” said Hamsa Shetty, an investor from Ajman. In theory, a similar panel could be established in other emirates as they have the authority to do so, according to Nassif Bu Malhab, partner at international law firm Clyde and Co.

“Setting up a committee makes good sense. It allows people to deal with these things in an expeditious manner,” Bu Malhab said.

“Rather than dealing with complaints on a case to case basis, [the panels] would deal with it on a project to project basis, ” he added.

Escrow accounts

Bu Malhab said these panels would have a list of purchasers in the projects and would have an idea of how much money is sitting in the escrow accounts.

The number of cancelled property projects across the country is difficult to track, according to Craig Plumb, head of research at Jones Lang LaSalle (JLL) for Mena.

“There wouldn’t be any figures for the emirates [outside Dubai] because there’s no government department that monitors them,” Plumb said, adding that developers will not admit that their projects are cancelled, otherwise they would have to refund investors.

He said that in Abu Dhabi in 2009, of the 55,000 residential units to be completed between 2010 and 2012, only 29,000 were completed. This leaves 26,000 units that are either delayed or cancelled today.

Compensation

Ajman Real-estate Regulatory Agency (Arra) has been working to help compensate investors that have lost money through cancelled projects, Yafea Al Faraj, Arra’s executive director told Gulf News.

“So far we didn’t cancel any projects. We’re trying to help those people. They have to open a case in Arra and have to decide which way [to be compensated]: money or transfer,” Al Faraj said.

“If their money is in an escrow account, it will be transferred to another project or sent back to them,” he added.

Bu Malhab and Geoff Smith, associates at law firm Afridi and Angell said none of the emirates, aside from Dubai, are planning to set up a committee to oversee the liquidation of cancelled projects as far as they know.

“I don’t know. As far as I’m aware, Dubai is the first,” Bu Malhab said.

Comments (10)

  1. Added 16:00 August 19, 2013

    I am strugling since 3 years to get back my money or other option for the payment made in AJMAN Emirates City project which is on hold or cancelled since long but no any refund or way forward is available until now. It is very Good initiative from Dubai Govt and strongly recommend to establish in AJMAN also to resolve the issues of investments in cancelled projects.

    Ahmed, Abu Dhabi, United Arab Emirates

  2. Added 15:57 August 19, 2013

    Please take some action so investments made in Ajman with Chapal Builders can be recovered. It is a total loss. The support from government to individuals who suffered is so much needed. A move to help investors will win hearts and show the wisdom, the concern with their citizens that UAE rulers have.

    Yasar Mansoor, Dubai, United Arab Emirates

  3. Added 13:49 August 19, 2013

    ARRA has been working to help compensate investors that have lost money through cancelled projects. So far we didn't cancel any projects which clearly means it's a no cancellation no refund policy and that's why none of the projects are cancelled yet even if the developer has disappeared. Can they tell us what help they have provided to any of the investor in last couple of years apart from just registering the complaint and sitting on it.

    Waseem, Dubai, United Arab Emirates

  4. Added 13:44 August 19, 2013

    ARRA is quoted by you as saying that it has not cancelled any Ajman projects, despite many developers having not even built the ground floor after 5 years at Emirates City. If that is the case, ARRA is unable to return any funds to the buyers from the escrow accounts. Ajman should consider issuing a similar decree to Dubai. That is to set up a judicial committee to liquidate cancelled real estate projects in Ajman, including the Emirates City development. This should provide settlements, resolve grievances and address procedural issues. Otherwise, the disputes regarding Emirates City in Ajman may go unresolved for years and years, which is not a good public relations image for Ajman as a place to invest.

    leo, amsterdam, Netherlands

  5. Added 13:39 August 19, 2013

    Any One Have Idea Hydra Tower in Business Bay Got Cancelled ? If yes how i can approach for my money and to whom !! Thanks

    IRFAN SHEIKH, DUBAI, United Arab Emirates

  6. Added 13:35 August 19, 2013

    When the project in Emirates City (Ajman) had started, there was no Escrow account for most of the projects. Instalments were being paid directly to the developer. Now there is only the vacant PLOT or deserted half constructed buildings only. The developer/contractor has closed their office and there is no any trace of them. Please advise , whom to approach/contact to recover the money which the investor/apartment owners who have already paid.

    Anonymous, Sharjah, United Arab Emirates

  7. Added 13:35 August 19, 2013

    please let us know on the fate of the suppliers of this uncompleted or stopped project, the authoriity has to protect them too, As lot of them are suffering due to this.

    shaji joseph, dubai, United Arab Emirates

  8. Added 10:21 August 19, 2013

    Settling cancelled projects is a good approach and great step but delayed projects also required immediate action. How long an investor can wait hearing from developer "Your project is delayed"?

    Kamiar, Dubai, United Arab Emirates

  9. Added 10:08 August 19, 2013

    Has anybody heard of any EC property buyer actually getting any money sent back to them or getting any refund of their money through ARRA? You said ARRA have NOT cancelled any projects. But if the projects are not cancelled, money cannot be returned back to the buyer. So what ARRA is saying here does not make sense. And why have not they cancelled any EC projects despite many of them not even out of the ground despite 4 to 5 years waiting!!

    faisal, Sharjah, United Arab Emirates

  10. Added 09:56 August 19, 2013

    I strongly believe that ARRA has a very effective role to play. However, my personal experience having paid a visit to the ARRA office in June this year was very disappointing, as the gentleman at the counter mentioned that ARRA does not have any influence between the investor and the contractor. I mentioned that I am ready to pay the difference for my property to be transferred to another project which is completed or near completion, as my current property in Emirates City which was due to be delivered in 2008, is yet to be completed and the contruction work is moving extremely slow. There is very little support coming forward from ARRA to investors.

    Hamayoon Mubtakir, Ajman, United Arab Emirates

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