Dubai: Dubai-based real estate giant Nakheel has launched an initiative aiming to stamp out "hidden fees" relating to property transactions.
The property developer says it will modify its internal procedures to reduce costs for property purchasers and will boost transparency in cost information provided to buyers.
"As both the Dubai property market and laws mature, it's vital that master developers streamline their process and fees to reflect this progress," said Nakheel CEO Chris O'Donnell.
The move follows recent Gulf News articles citing residents' complaints over extra charges levied by developers and sub-developers.
Buyers said they faced hidden costs totalling several thousand dirhams when registering their new homes, either charged directly by the developer or passed down by a middle man, in addition to the standard fees levied by Dubai Land Department.
Nakheel, developer of numerous major projects including the Palm Jumeirah and International City, was among the developers criticised by homeowners.
A resident at International City said he paid the land department's fee, as well as a two per cent registration administration charge to Nakheel and a further Dh2,000 service fee, which he claims was passed on to him by the building owner (an organisation that buys an entire building from a developer and sells individual units to end users).
"I knew about having to pay the Land Department fees, but then I found out that I would have to pay extra costs," the resident told Gulf News. "It's unjustifiable that the developer charged me or the building owner an extra amount for a relatively simple (title registration) process."
O'Donnell said Nakheel will highlight in its contracts the actual fees payable and spell out that buyers are not liable to pay any sellers costs. This includes Land Department fees and affection plan production costs.
The company says it will continue to provide value-added services where required by customers, but will not make these services mandatory. These services include contract production for building purchasers or assistance with Land Department title transfers for registered owners.
Property buyers have also complained about the cost of Notification of Completion certificates (NOC), which homeowners who already hold title deeds must produce when transferring their property to another party.
Nakheel also said it has cut the fee for issuing NOCs from Dh1,000 to Dh500, which it says covers the cost of verifying that there are no outstanding issues such as unpaid service charges.
Sunday's initiative was announced in collaboration with Dubai Land Department, which had vowed to investigate the issue of hidden costs when complaints first arose earlier this year.
A spokesperson for the department said Nakheel's move will aid the continued growth of Dubai's property market by simplifying the process of purchasing property for local and international investors.
Do you think other developers will follow suit? Will this move by Nakheel help create more transparency in the property market?
Your comments
Nakheel has charged me land registration, service charges for my apartment and buildings. This had to be paid in advance, but I can't get access to my property because it's not finished yet.
Tom
Dubai,UAE
My father bought a studio flat in International City. At the time its cost was Dh199,000 and we were told it would be available for occupancy in December 2005. After making full payment through ARY Properties two weeks ago, we came to know we need to pay Dh37,800 more, including lots of different charges. So you can have an idea how one can feel about these hidden charges and how much people have to suffer once you invest your life's savings in an investment like this.
From a reader
Dubai,UAE
I bought a two bedroom apartment in International City via ARY Properties (NAKHEEL developer). I got a huge bill of hidden charges by both ARY and Nakheel, which is very sad.
Malook
Sligo,Ireland
I am in the process of buying a one bedroom apartment in International City through ARY Properties. I have received a e-mail from them regarding my handover charges. I was amazed to find out that I have to pay nearly Dh21,000 in charges.
Imran
Manchester,United kingdom
Regarding the NOC fee - developers require customers to provide the fully paid receipt for the service charges for the current year before a sale can go ahead. Why would the developer again need to check the service fees have been paid to provide the NOC - proof of this has already been provided by the customer selling their property. So in reality what extra work would the developer have to do to check this since proof has already been provided in the form of an original stamped receipt from the developer!
Moore
Dubai,UAE
If Nakheel can cut the NOC cost to Dh500 then I sincerely hope Emaar will follow suit and cut the same as they are charging Dh5000 for this. There is no justification for the extra Dh4,500 Emaar are charging in relation to this fee.
Moore
Dubai,UAE
