'Unfair' development: Breach of contract

Dubai : A group of investors, who said they have been unfairly treated by developer Omniyat Properties, are to take legal action against the company they claimed has "breached" their contracts.

Around 50 people who invested Dh150 million in 35-year leasehold apartments (a mix of studio and one- to three-bedroom units) at The Square, Al Mamzar, have been in dispute with the company for over a year.

New contracts

They said the developer is trying to force them to sign new contracts that have "unfair rules and regulations" before they are allowed to take possession of the properties in August next year.

The new contracts, they said, state that leaseholders will not be able to sublet or sell their units without paying an Omniyat-appointed broker.

In response some investors have decided to take the case to the Dubai International Arbitration Centre, which is part of the Dubai Chamber of Commerce and Industry.

Murtooza Amthaniwala, a Deira-based Indian businessman, paid Dh1.1 million in cash — 50 per cent of the value — for two units he intends to move into with his wife and three children. He said investors wanted Omniyat to abide by mutually agreed contracts they signed in 2006.

Murtooza said: "The arbitration centre verdicts are legally binding. If Omniyat still fails to comply we will then take the findings to Dubai Court for enforcement. Omniyat have arbitrarily changed the contracts and we don't think that's fair."

The group, which has bought a total of 220 units at the mixed residential and business development, is currently preparing their legal documents to send to arbitration.

They are expected to be handed over by Sunday (December 20) after which Omniyat will have 10 days to respond.

Cost per unit

The typical cost per unit is around Dh1.1 million.

The payment of the rest of the amount should have started after handover of keys, with the full amount paid over a five-year period via post-dated cheques.

However, investors say Omniyat has breached the payment terms by depositing some cheques without handing over the apartments.

They said Omniyat announced the completion of phase one of the project in August 2009, but the units were not ready to use until November. Phase two, involving business units, is expected to be completed in the fourth quarter of 2009, according to the developer's website.

Investors blamed Omniyat for imposing new handover charges and maintenance fees of Dh17 per square foot. No one at Omniyat could be contacted for comment.