Caveat emptor

This is the first part of a two part serial based on a true account of w hat happened to one of my very own clients when he tried to buy and resell a property from Emaar.

T. bought a two bedroom apartment in the Al Majarah 2 building overlooking the Dubai Marina. He was offered it at a very good price, met with the owner and gave a holding deposit.

A couple of weeks later he went with the owner and agents to transfer the property. He paid 30 per cent to the owner and the 70 per cent balance was now due as the property had been completed. However, he was told by the Emaar representative doing the transfer that he would be given a further 60 days to pay it in full.

This was fine as he intended to resell the property within that time frame.

The transfer fee of 1.5 per cent of the original price was paid to Emaar and the request for transfer was approved. At this stage T. was under the impression he now owned the apartment and could sell it on immediately.

We were asked to sell it exclusively on his behalf and found a buyer within a few days. However, when we checked with Emaar about arranging an appointment for transferring it to the new buyer they said it was not possible as it had not been fully paid yet. It was never pointed out to T. that this was required.

I asked why the new buyer couldn't pay the 70 per cent direct to Emaar and proceed with the transfer. In theory he could, he replied, but the receipt would have to be made out to T.

This would leave the new buyer exposed. There would be no proof that he paid the 70 per cent and not T.

The transfer could not be done immediately on final payment and could take up to a week before the name was officially transferred. This would require an MoU (Memorandum of Understanding). However our new buyer was put off by the whole idea and pulled out from the deal.

So we found another buyer a week later, and explained that T. would make the full payment this time before the transfer, thereby pre-empting the problem we had with the first buyer.

We took a holding deposit, another transfer date was fixed and T arranged to go to Emaar a few days before to pay in full himself.

We confirmed with Emaar that if we did this, it meant the transfer could go ahead without any delay to the new buyer. However, when T. went to make the full payment he was told there was now a late payment penalty fee of Dh14,000 and the transfer could not be done for another 2 months.

Our second buyer could not wait this long. He also pulled out.

A two-month ban was never mentioned at any stage up to this point.

I was aware of a penalty for the original owners who made late payments as it would be a deterrent against future late payments. But at no time had Emaar mentioned that the extra 60 days grace period given would fall into the late payment category.

It seemed pointless to have a transfer ban. No one would benefit if the sale was lost. Emaar would not even get their full payment now, as T had borrowed the money in the first place on the promise it would be repaid within a few days.

This was not going to happen now, so I advised him to return the money. Emaar then went on to tell T. that if it wasn't fully paid within the next 14 days, he would forfeit his 30 per cent deposit. What seemed like a good investment initially suddenly became a nightmare. T. did not have the funds to make the full payment and could not sell it due to the Emaar two month transfer ban.

I then Emaar if it got repossessed what would happen to his 30 per cent deposit which amounted to Dh320,000.

She was unable to comment on this, but implied he would forfeit it. I asked would he get anything back when the apartment was resold. Again she was unable to comment.

So how does T. get out of this one? He has no option now but to try and obtain a mortgage within the next two weeks. How will he fare with this? You will have to wait with me to find out.

- The writer is the managing director of Best Value Property Consultants.