Dubai: Property investors in emirates outside of Dubai have lamented the financial losses they have incurred from delayed and cancelled projects, and some would like to see a panel set up to oversee the liquidation of cancelled projects.
Last month, His Highness Shaikh Mohammad Bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, issued a decree to set up a judicial committee to liquidate cancelled real estate projects in Dubai. It will provide settlements, resolve grievances and address procedural issues.
“Investors in Ajman properties say the same scheme should come up for Ajman properties,” said Hamsa Shetty, an investor from Ajman. In theory, a similar panel could be established in other emirates as they have the authority to do so, according to Nassif Bu Malhab, partner at international law firm Clyde and Co.
“Setting up a committee makes good sense. It allows people to deal with these things in an expeditious manner,” Bu Malhab said.
“Rather than dealing with complaints on a case to case basis, [the panels] would deal with it on a project to project basis, ” he added.
Bu Malhab said these panels would have a list of purchasers in the projects and would have an idea of how much money is sitting in the escrow accounts.
The number of cancelled property projects across the country is difficult to track, according to Craig Plumb, head of research at Jones Lang LaSalle (JLL) for Mena.
“There wouldn’t be any figures for the emirates [outside Dubai] because there’s no government department that monitors them,” Plumb said, adding that developers will not admit that their projects are cancelled, otherwise they would have to refund investors.
He said that in Abu Dhabi in 2009, of the 55,000 residential units to be completed between 2010 and 2012, only 29,000 were completed. This leaves 26,000 units that are either delayed or cancelled today.
Ajman Real-estate Regulatory Agency (Arra) has been working to help compensate investors that have lost money through cancelled projects, Yafea Al Faraj, Arra’s executive director told Gulf News.
“So far we didn’t cancel any projects. We’re trying to help those people. They have to open a case in Arra and have to decide which way [to be compensated]: money or transfer,” Al Faraj said.
“If their money is in an escrow account, it will be transferred to another project or sent back to them,” he added.
Bu Malhab and Geoff Smith, associates at law firm Afridi and Angell said none of the emirates, aside from Dubai, are planning to set up a committee to oversee the liquidation of cancelled projects as far as they know.
“I don’t know. As far as I’m aware, Dubai is the first,” Bu Malhab said.