Dubai: Investors who bought units in a Dubai Marina skyscraper, which was put on hold after the developer failed to settle dues, will receive handover at the earliest if their unit was registered with the Dubai Land Department (DLD), a top official has said.
Gulf News reported on October 10 that lead lender Bank of Baroda had taken control of the Marina 101 tower in Dubai Marina after the developer Sheffield Holding Limited ran out of funds for the 10-year-old project, which is 97 per cent complete.
Buyers were concerned about what would happen to their investment, especially as at least 15 unit purchasers had claimed Sheffield Holding Limited didn’t process their Oqood, which is a contract registered with the DLD, to prove the investor owns the unit.
Any unit registered under Oqood will certainly be honoured and will be handed over to respective investors upon project completion and after all payments are made.
In a statement issued to Gulf News on Monday, Marwan Bin Ghalita, CEO of the Real Estate Regulatory Authority (RERA), said, “We’re currently in the process of completing the project at the earliest time and in conjunction with Bank of Baroda as the account trustee, contractor and consultant.
“Any unit registered under Oqood will certainly be honoured and will be handed over to respective investors upon project completion and after all payments have been made.”
Marina 101 – what is the issue?
Developer Sheffield Holding Limited ran out of funds to complete the project, which was started in 2007. Three Indian banks led by Bank of Baroda, along with Indian Overseas Bank and Bank of India, have now been left with dues of over Dh400 million and are courting new developers to come in and complete the project.
In the meantime, investors are in limbo until a new investor can be found, but worse still some investors – Gulf News understands at least 15 – don’t have an Oqood, which is proof of ownership registered with Dubai Land Department.
Asked what would happen to those without an Oqood, Bin Ghalita replied, “Should such an unfortunate situation arise, investors will be requested to seek legal counsel in demanding compensation from the developer as per the laws and regulations set in place.”
Explaining the delay and RERA’s role, Bin Ghalita said, “Through RERA, the DLD consistently sets legislations to regulate the relationship between contracting parties as well as monitors projects financially and technically to protect investors.
“The project was 97 per cent complete in 2018 and was put on hold due to the failure of the developer to settle dues with the project’s contractor.
“Additionally, DEWA’s connection charges are yet to be covered by the developer, and the project still requires some minor work to be completed.
“For these reasons, DLD decided that any and all progress on the project is to cease until all matters have been resolved before a BCC (building code compliance) application may be requested.”
No Oqood registration for some
One of the investors, Canadian national Parham Gohari, 44, paid 90 per cent of Dh1.5 million for his one bedroom apartment back in 2013, but never registered the Oqood because he was planning to sell the unit and let the new buyer handle that responsibility.
“I’m very frustrated because beside the fact the value has probably gone down 50 per cent, I may also now lose all my money as well,” he said.
“I’ve been told it’s a long and costly process to appeal this, Dh40,000 just to open a case and Dh60,000 to hire a lawyer, so that’s Dh100,000 just to get started, and six months to complete. It’s doable but I need to find proof of all my payments. I’ve no choice but to follow this course, but it’s frustrating because at the courts I’m pushed from one department to the other and no-one knows what’s going on. I’m now caught up in the system so why would I do business and invest here again?”
What Bank of Baroda says
In an earlier interview with Gulf News, Bank of Baroda CEO Ananda Kumar said, “We are embarking with developers, working to find a resolution to complete this project to ensure all investors and banks get back what they paid.
“How long that will take, we may not be able to tell exactly, but we are expecting that within six months, this entire thing should be over.
“The building is 97 per cent complete and the market appears to be good keeping in view locality,” he said of the bank’s chances of finding a new developer.”
Asked if investors would get their flats or be repaid once the new developer came in he said, “We are analysing various options to protect individual buyers’ as well as banks’ interest.
“We are committed to getting this done in the quickest time possible, but there are court processes ongoing out of our jurisdiction that we have to respect.”
Asked what would happen to those who paid out of escrow and/or without Oqood, he replied, “It’s difficult to say. If there’s no registered agreement, it’s not recognised and nothing is there to be taken as lawful. They may not have any right or money back.”
What is an Oqood?
Proof of payment registered with Dubai Land Department
What is escrow?
Payment made between a third party, not direct to the developer. Some have made payments outside escrow, which now may not be recognised by the DLD.