Schon defends project delays

The cards, part of a customer service scheme, haven't eased the angst of investors, some of whom demand compensation for the delay in delivery. The project was initially slated for completion in December 2007.

David Schön, vice president of Schon Properties, says zone one of the project will be completed by December, with delivery starting in January. "We will deliver four to five apartments a day, so the delivery process should be completed by the first quarter of 2010. The whole project will be ready by the end of 2011." Investors who have visited the site find this hard to believe. Dubai-based investor NI says, "It is still a sandpit. The buildings that look the closest to completion are just shells."

Schön Properties puts the delays down to changes made by Rera and the RTA. "Initially, we submitted our master plan to Rera, which was then blocked. After two to three months, we found out it was blocked because the RTA had plans to build a Metro station there. The RTA cut 10m into our plot, which meant we had to redesign the whole project of 6 million ft². In order to ensure the buildings weren't affected, we compacted the lagoon by 10m," says Schön.

NI claims the developer knew about this change back in 2005. "This issue with the RTA has been an ongoing dispute since 2005. I, along with some other investors, signed the reservation forms in October 2007, and we were kept in the dark regarding this issue. If I had been told of this complication at the time of purchase, I would not have bought the unit."

NI says an investors group was formed in April 2008 as a result of "construction progress, lack of customer service, false promises, non-issuance of contracts, non acknowledgement of investors' complaints and lack of compensation."

"We have over 3,000 customers and have received complaints from only 2 to 3 per cent," says Schön. "Even though their number is small, for us each customer matters. We have done everything possible to sort the issues out with them." He says every month there is a meeting where investors can visit the site and get construction updates.

Payment plans are another issue. Investors say that while payment is supposed to be linked to construction progress, many have already paid up to 50 per cent without seeing the same progress in construction. "Most of us paid about 50 per cent, but there is not even a single brick laid on our zones," says Viktor, an investor. Tommy, a UK-based investor says, "I asked Schön Properties for a revised payment schedule that is in line with the construction progress, bearing in mind that I have already paid 75 per cent of my unit. They refused and said I would lose the unit if I did not continue with payments."

Schön says, "Rera and the Dubai government have instructed developers to link all payments to construction. You have to pay 30 per cent before construction, and the next instalments are linked to construction progress."

He suspects some investors are unhappy because Rera issued the letters in Arabic, which many can't understand. "It was clearly mentioned in the letter that customers can choose either construction linked or a date based payment system. If they wanted an extension, we gave them the extension."

Aya Lowe and Binesh Panicker/ANM