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Green Community residents threatened with legal action

Green Community residents are being threatened with legal action and even the termination of their leases following a dispute with the developer over a dramatic increase in maintenance fees.

  • By Ivan Gale, Staff Reporter
  • Published: 00:00 March 26, 2007
  • Gulf News

  • Lake Apartments at Green Community. Maintenance fees for a three-bedroom house will rise from Dh10,800 to Dh30,000.
  • Image Credit:

Dubai: Green Community residents are being threatened with legal action and even the termination of their leases following a dispute with the developer over a dramatic increase in maintenance fees.

More than 300 concerned Green Community residents met last week to discuss the fee hike, which will rise as much as 300 per cent for the owners of these leasehold units within Dubai Investments Park.

Fees for an owner of a three-bedroom apartment, for example, will rise from Dh10,800 to Dh30,000 this year.

"People are angry and upset and wanting answers," one resident said over what has turned into a four-month ordeal. "If we get answers and the truth, we will pay it. We want our community to be number one, but we want to be paying for something that is justified."

Subsidised

A statement by Property Investments to Gulf News said the management fees have in the past been subsidised.

"In 2005 and 2006, Properties Investment collected back from its tenants only 38 per cent and 39 per cent, respectively, of the actual costs that it incurred in maintaining and managing Green Community.

"For 2007, the Company is seeking to collect 76 per cent of anticipated cost, still not the 100 per cent recovery that it is contractually entitled to demand."

The day after last week's meeting, residents received a letter from the developer's legal counsel, calling the meeting an "illegal gathering."

The conduct of the speaker was "defamatory and is punishable pursuant to the Federal Penal Code by imprisonment or by imposing substantial fines," the letter stated. "Such criminal activity will be reported to the authorities."

The latest skirmish follows an effort by residents to have Properties Investments provide audited annual expenses at the end of each year and also a detailed budget of the next year's expenses. Both are guaranteed in the lease contract and were not shown in the last three years, residents say.

Property Investments, meanwhile, said they have "disclosed to tenants through various means full management accounts for the three years in question."

"They hit us with [higher management fees] and expected us to naturally accept it," said one tenant. "The message is, 'Don't argue, just pay. And by the way, we want it next week.' This heavy-handed way has upset people."

The issue arose last November, when Properties Investments issued the new fees and told residents they had two weeks to send payment.


Your comments


We are very dissatisfied with the hike in service charges and the arrogance of the management office. Some action has to be taken against greedy people who are just raising the standard of living in Dubai without any reason.
Mahitab
Dubai,UAE

Developers and management companies are poisoning their own wells. People are not like cattle that can be herded in just any direction, or fleeced like sheep. The authorities need to act to regulate the real estate market if growth is to be sustained. The world is watching Dubai, and investment is easily spooked and will go elsewhere. Treat these people fairly and guarantee financial protection or new money will stop flowing! Simple economics, really.
Helmut
Dubai,UAE

This unjustified rise of maintenance fees should not be forced on owners by the developers, because this may reduce confidence in the UAE?s real-estate boom. A 300 per cent rise at once is clearly unreasonable, if the developer is unable to handle maintaining the job within a reasonable cost bracket they should hand it over to some neutral private company to overcome the crisis.
Kari
Stockholm,Sweden

This was bound to happen. First they will try to sell the property and after that the buyers will think of disposing of their properties due to this type of pressure. I was thinking of buying an appartment, but when I see this type of news coming up everyday, I think it is wise to stay in a rented apartment where I can leave whenever I want if I can't afford the huge hikes. There are many clauses are added in the deeds and if you fight it legally, you will be on the losers side.
Nair
Kerala,India

I say just pack up and leave the Green Community. These developers can take their properties and keep it for themselves! Us as the foreign community do not have to put up with all these unethical norms of life.
Reza
Dubai,UAE

The most the developer can do is publish audited statement of accounts and highlight the reason for increasing the service charge.
Ron
Dubai,UAE

I think the management should provide the residents with a complete audit report providing the full details.
P. Sharma
Dubai,UAE

Its no way legal to increase maintenance cost to 300 per cent. This is not fair.
Ronald
Dubai,UAE

This is equivalent to buying the freehold property and then paying up 30,000 to rent it to yourself again!
Bilal
Abu Dhabi,UAE

Management fees are a common concept in planned unit developments (PUDs). It also very common for the owners or tenants to select a management committee who appoints a maintenance company. The residents have the right to ask why and decide for themselves the choice of management company and the services. Normally the selection of a maintenance company is done by management through a bidding process. If these rules are not set right from day one, the success of the real estate ownership and assets can be put at stake. It is the owners and tenants that should be primarily protected for the real estate ownership model to be successful.
Ghaffar
Robbinsville,USA

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