Dubai Property Court Desaster - Four Judges and over 1000 cases

source The National
Heavy workland of Justice

The hearing begins and a few words and papers are exchanged between the judge and the lawyers representing each side.

Within minutes, it is all over. Claimants and defendants are quickly ushered out of the courtroom as their respective lawyers whisper a roughly translated version of the judge’s ruling. Moments later, the next case begins.

Welcome to Dubai’s Property Court, a division of the emirate’s legal system that has been dealing with the fallout of its property crisis since September 2008.

As case files spill out of a room one floor down from the court, officials decline to reveal how many property disputes are under way or pending. A clerk in charge of registering cases hints that the figure may be in the “thousands”.

“We are overwhelmed … it is too much work,” says the clerk, who does not want to be named. “Some cases are small, some are big. People should try and settle with the developer as they will spend more bringing the problem here.”

Just a few months after it opened in 2008, the Property Court had a mammoth challenge on its hands after the property downturn.

The court is a “work in progress”, says Dr Jamal Alsumaiti, the director general of the Dubai Judicial Institute. “You can see there’s movement from the government for regulation and for developing the judicial system as well … it’s a very critical period.”

Ron Oakeley is more than familiar with the Property Court, and the huge investment of money and time that come with a lawsuit.
The British businessman, who has been in Dubai since 1985, is about to attend his 15th hearing in a case filed more than a year ago against Alternative Capital Investment (ACI), a German developer.

Mr Oakeley is trying to recover more than Dh1.2 million (US$327,000) he spent on two offices at ACI’s long-delayed Niki Lauda Twin Towers, one of a trio of projects launched in late 2007.

His efforts, in part, paid off in February when the court rendered his agreement with ACI for one of the units “void” and ordered the company to repay him Dh569,585, plus 5 per cent interest from the date he started proceedings.

The court ruled for Mr Oakeley because ACI had failed to register the property with Dubai’s Land Department, according to court documents. A property contract is valid only when it is registered with the department.

But Mr Oakeley lost the case for the second unit, which cost Dh695,000, because the court found that the property had been registered, although it has since emerged it was under somebody else’s name.

ACI was quick to appeal the decision on the first unit. At yesterday’s hearing, the court decided to appoint an official to check on construction progress at the site, which appears to be at a standstill.

If there is still no conclusion at the next hearing, scheduled for June 23, then the case could go to the Court of Cassation, the final stage in the judicial process.

Mr Oakeley is one of dozens of investors with suits against ACI. He says it has so far cost Dh400,000, including fees and the cost of lawyers. But with the project showing little sign of progressing, he says he has no choice but to fight on.

“It’s the principle … most people can’t afford to keep fighting,” he says. “Unlike elsewhere in the world, you’ve got to spend so much more money to get your rights.

There are hundreds of other projects in the same boat but nobody seems to be helping the people.”

Robin Lohmann, the chief executive of ACI, was unavailable for comment in the past two days.

Property disputes are generally filtered through the Dubai Land Department, where the department’s legal team tried to resolve them before they reach a courtroom.

While there is a surge in the number of investors turning to the department after the financial crisis, fewer people are approaching it today, says Mohammed Sultan Thani, the assistant director general of the Land Department.

“We are now seeing a lot of agreements between the buyer and seller,” Mr Thani adds. “There’s been a lot of movement of buyers between a project that hasn’t started to one that has.”

Since the Property Court is costly, it has mainly been used by major investors such as Mr Oakeley, who have the funds to pursue a case.

It costs Dh30,000 to register each case with the court, so if an investor has bought 10 apartments from one developer, simply lodging the dispute will cost Dh300,000.

As well, all cases require a local lawyer, who will charge a commission of up to 5 per cent of what the client is claiming. The proceedings are in Arabic so a claimant would have to pay for the translation of court documents as required.

“For an investor contemplating filing a legal case against a developer, it is advisable to first seek consultation with a lawyer who can advise whether filing a case makes sense based on the circumstances,” says Ludmila Yamalova, a partner at Al Sayyah Advocates and Legal Consultants.

Some cases have been settled out of court, Ms Yamalova adds, with developers agreeing to reimburse claimants in instalments.

With just four judges at the Property Court, cases can be long. But more than 18 months after it was established, steps are being taken to refine the system, says Dr Alsumaiti – a move that will likely boost confidence among investors.

“Four judges are not enough,” he says. “The concept of having a specialised property court isn’t new but the implementation is. The judges need to have the skills and knowledge to understand every single detail of a case. As long has you have provisions to speed up your procedures, you have a very strong legal system.”

RERA - Dubai mulls cancellation of 27 projects

source ArabianBusiness

Dubai is considering cancelling 27 projects, the head of its real estate regulator said on Monday, as the emirate's property market slumps in the global downturn.

A decision whether to cancel or not would be made by the end of the month, said Marwan bin Ghalita, the head of the Real Estate Regulatory Authority (RERA).

"The decision has not been done. They are projects all over Dubai - third party projects (sub developers)," he said.

Earlier this year, Ghalita said he believed 25 percent of projects will be cancelled in Dubai as a result of the global economic slowdown.

"It's almost the same," he said when asked if that figure had changed. The Dubai Land Department and RERA set up a committee last week to cancel projects in the emirate that are not feasible.

RERA Dubai - Panel to identify unviable projects for cancellation

source Business24-7

Dubai Thursday, May 07, 2009

The Dubai Land Department and the Real Estate Regulatory Agency (Rera) have set up a committee that will decide on cancellation of "unviable" projects, senior department officials said yesterday.

Addressing an investors' meeting, officials said a committee has been formed to study and analyse non-feasible projects.

"It is a tedious task and requires a lot of paper work. But the committee has been created to address the issue," a senior official said.

Ludmila Yamalova, Partner, Mac Davidson Legal Consultants, who was present at the meeting, told Emirates Business that officials admitted project cancellations were not under their purview earlier, but amendments to Law No13 regulating the Interim Real Estate Register in Dubai now allows them to cancel projects that they deem not feasible.

In February, Rera Chief Executive Officer Marwan bin Ghalita said he believes 25 per cent of the projects will be cancelled, as developers did not start them or don't have an intention to begin. However, he could not be reached for comment on the number of developers requesting cancellation.

The officials further told investors that the detailed regulations for Article 11 of Law No13, which lays down the terms for cancellations of "off plan" properties, will be announced soon and will explain terms such as "beyond developers control" in detail.

According to Yamalova, the authorities said developers will no longer be allowed to retain any money on reselling of units on termination of investors' contract.

"Developers will no longer have any incentive to cancel contracts, as the money received on the resold unit will have to be deposited with the trust account of the Land Department," she added.

Besides, Rera is also ensuring all amended payment schedules from developers need to be approved by them, with it planning to upload all payment plans on their website.

According to Rera statistics, 31,003 and 43,880 units will enter the market in 2009 and 2010, respectively.

However, it believes 20 per cent of residential units may not enter the market this year.

In February, it said the number of developers has come down from about 870 to 427.

Dubai Property Court - Realty developers, agent told to pay Dh1.77m to couple

source GulfNews

Dubai: Two property developers and a real estate promoter have been ordered to repay Dh1.77 million paid in by a couple for a 26th-floor-flat overlooking Dubai's Business Bay.

The Dubai Real Estate Court ordered the Dubai-based promoter and property developers to repay the couple, a businessman and his wife, Dh1.77 million which they had deposited as a first instalment for the flat in a high-rise tower project.

Lawyer Dr Habib Al Mulla, of Habib Al Mulla and Co Advocates and Legal Consultants, who represents the couple, lodged the civil lawsuit against the defendants after they refused to collect the remaining instalments and write a contract then deliver the flat.

Presiding Judge Shehab Ahmad Al Shehi also ordered the defendants to pay the above-mentioned amount plus nine per cent legal interest.

Dr Al Mulla argued in his lawsuit that his clients purchased the flat for Dh17.7 million, out of the first payment was made to the promoter. "They collected a receipt for the first instalment. When the second instalment was due, the promoter asked my clients to pay it for the sake of one of the property developers based in Dubai."

Dr Al Mulla said since the deal was made, it was his clients' first encounter with the Dubai-based property developer.

"The claimants asked the promoter why should they pay the second payment to the Dubai-based developer before, they later agreed to pay & surprisingly, the promoter informed my clients that they stopped receiving payments for that project," he continued.

He said his clients were asked to follow up with the Dubai-based developer and a Kuwait-based developer.

The Dubai-based developer met with the claimants and informed them that there were no problems and they would be collecting their contract within a week, according to the lawsuit.

"Since then, the plaintiffs had been avoiding the claimants, refused to collect any instalments and didn't process the contract. Since my clients didn't get the flat, the price of which tripled after sometime, they lodged this lawsuit and claimed Dh1.77 million plus Dh500,000 in financial and moral compensation for the damages they incurred by the plaintiffs' act," argued Dr Al Mulla.

Presiding Judge Al Shehi further ordered the plaintiffs to pay Dh3,000 in lawyers' fees. The primary verdict is still subject to appeal.

Confusion over RERA Rental Index

source 7Days

A new feature of the Real Estate Regulatory Authority (RERA) web site caused confusion over the expected Rental Index update today, as it seemed to indicate a fall of up to 50 per cent in rental rates.

The new ‘Rental Increase Calculator’ on the web site showed significantly lower rents across Dubai, in what many media reported as an indicator of the updated version of the Rental Index, expected before the end of April.

However, a spokesperson from RERA told 7DAYS that the authority was still working on the index and there was no official update as yet.

The ‘Rental Increase Calculator’ on the web site today showed that a three-bedroom villa in the Springs would now be priced at between dhs140,000 and dhs160,000 a year down by up to 50 per cent from the previous guideline of dhs250,000 to dhs280,000.

A studio apartment in Dubai Marina had fallen to dhs65,000 to dhs70,000 from dhs80,000 to dhs90,000, which would be a discount of up to 28 per cent, while a two-bedroom apartment in Discovery Gardens fell up to 37 per cent, from dhs130,000 to dhs145,000, to dhs90,000 to dhs125,000.

The calculator only recommends any increase in rent if the tenant is paying from ten per cent or more below the low end of these ranges, and in that case, it gives the maximum rent increase as five per cent. In no scenario is the maximum rent increase more than 20 per cent.

RERA had said it would release an updated version of the index first released in January, which was criticised at the time for showing prices nearer to 2008 peaks rather than prices impacted by the global economic slowdown.

The RERA spokesperson today could not confirm when the update would be released.

Go to  www.rpdubai.com

to see the ‘Rental Increase Calculator’

Dubai’s soon to be official April Rental Index - RERA Dubai

source ArabianBusiness

This website has unearthed new rental data from RERA that looks certain to form the basis of the next Dubai Rental Index.

A new service on the the Dubai Real Estate Regulatory Authority’s web site allows landlords and tenants to enter details of their type of accommodation, current rent, and the name of their residential district. The web site then gives a guide price for how much rent should be paid.

However, the RERA web site stops short of publishing a full table of rents, so Arabianbusiness.com has put in the leg work to produce what is, in effect, the April 2009 Rental Index.

Having created the table, we then looked at the change in rents for every applicable area since the Index was last published in January 2009.

For villas, we compared median prices for three-bedroom homes; for apartments we compared median prices for two-bedroom units.

The results are startling. In the four months since the Rental Index was last published, rents have plummeted by almost 50 percent in some parts of the city.

Freehold developments have been worst affected, with two-bedroom apartment rents for Jumeirah Lakes Towers, Dubai Investment Park and Dubai Silicon Oasis all registering price drops of well over 40 percent.

Villa rental drops in the freehold areas have also been battered. Rents for a three bedroom villa in The Springs fell by 45 percent. Green Community, The Meadows and Arabian Ranches have all seen rents fall by one-third.

Table 1: Rental Index for Apartments (AED,000 per annum). Residential Areas are ranked according to the price change for a two-bedroom apartment.

	Studio	1-bed	2-bed	3-bed	4-bed	Change
Jumeirah Lakes Towers	60-70	65-100	90-125	140-170	170-190	-44.9%
Dubai Investment Park	40-45	55-60	70-80	…..	…..	-43.4%
Dubai Silicon Oasis	40-55	50-60	75-80	90-100	…..	-42.6%
Al Buteen	50-65	65-80	98-110	80-90	…..	-34.6%
Al Muraqqabat	50-65	65-85	80-120	105-140	…..	-31.0%
Al Riqqa	50-60	65-85	80-120	105-140	…..	-31.0%
Al Garhoud	50-60	65-75	80-110	95-105	…..	-30.8%
Mirdif	45-65	65-75	80-100	105-115	…..	-28.0%
Al Jafeliah	40-45	45-55	65-85	90-120	….	-26.8%
Greens	55-70	90-110	120-140	160-200	220-240	-25.3%
Al Huamriya	45-60	60-80	80-100	110-150	150-170	-25.0%
Al Hudaiba	45-55	60-70	80-100	100-130	130-150	-25.0%
Discovery Gardens	45-50	60-70	90-125	…..	…..	-21.8%
Rigga Al Buteen	45-65	65-90	70-110	105-120	…..	-21.7%
Al Qusais	42-47	58-68	70-95	90-105	…..	-21.4%
Al Muteena	45-60	55-65	80-95	90-110	…..	-20.5%
Palm Jumeirah	…..	95-135	160-200	175-210	280-300	-20.0%
Green Community	55-60	80-90	110-125	150-170	…..	-19.0%
Port Saeed	45-55	65-75	70-100	95-115	…..	-19.0%
Al Nahdah	35-45	53-65	68-78	80-90	…..	-18.9%
Al Refaa	45-65	60-80	90-105	105-140	130-160	-18.8%
Al Warqaa (Buildings)	35-45	46-66	70-80	80-150	…..	-16.7%
Dubai Marina	65-75	80-120	120-160	160-200	220-240	-15.2%
International City	35-45	45-50	70-80	…..	…..	-14.3%
Hor Al Anz East	45-60	57-85	90-100	110-130	…..	-13.6%
Al Badaa	40-50	55-70	70-90	….	….	-13.5%
Hor Al Anz	40-50	50-60	70-80	75-100	…..	-11.8%
Abu Hail	40-50	50-70	70-80	95-105	…..	-11.8%
Trade Center 2	60-70	80-90	100-140	135-165	….	-11.1%
Trade Center 1	60-70	80-90	100-140	135-165	….	-11.1%
Al Souq Al Kabeer	45-55	60-70	75-85	100-130	….	-11.1%
Al Musalla	45-55	60-70	75-85	100-130	….	-11.1%
Al Muhaisna Fourth	35-45	50-60	60-70	80-90	…..	-10.3%
Jumeirah Beach Residence	75-90	100-125	140-160	160-200	230-250	-9.1%
Dubai Tower / Downtown	80-85	100-165	175-200	200-260	220-280	-8.5%
Al Murar	35-45	50-60	60-70	75-85	…..	-7.1%
Al Sabka	40-45	50-60	65-75	90-100	…..	-6.7%
Satwa	40-50	55-70	70-110	….	….	-2.7%
Gardens	…..	70-75	100-115	130-140	…..	0.0%
Al Baraha	35-45	45-60	65-75	85-95	…..	0.0%
Ayal Nasir	40-50	60-70	70-80	75-85	…..	0.0%
Umm Hurair	50-60	60-90	85-115	120-140	….	0.0%
Al Mankhool	45-65	70-80	85-125	120-150	150-170	0.0%
Oud Metha	55-65	65-95	95-125	105-140	….	2.3%
Al Ras	40-50	55-70	70-80	80-85	…..	3.1%
Al Barsha	50-55	65-85	95-115	110-140	….	5.0%
Al Daghaya	35-45	45-60	70-80	75-85	…..	6.7%
Naif	35-45	46-58	65-75	80-90	…..	13.3%
Al Karama	45-55	65-85	100-110	105-135	140-160	16.7%

Table 2: Rental Index for Villas (AED,000 per annum). Residential Areas are ranked according to the price change for a three-bedroom villa.

	2-bed	3-bed	4-bed	5-bed	6-bed	Change
Springs	100-130	140-160	160-180	…..	…..	-43.4%
Jumeirah Islands	…..	…..	270-290	300-320	…..	-37.8%
Green Community	…..	160-190	180-210	230-240	250-270	-36.4%
Meadows	…..	190-210	220-240	260-280	…..	-35.5%
Arabian Ranches	120-140	150-200	220-250	250-350	330-400	-34.0%
Umm Suqeim	145-175	200-240	260-320	290-360	…..	-32.3%
Palm Jumeirah	…..	250-280	300-350	375-420	…..	-29.3%
Al Barsha Residential	130-160	170-200	200-240	240-280	…..	-24.5%
Jumeirah	140-170	180-240	250-310	280-350	…..	-20.8%
Al Quoz Industrial	130-140	140-170	180-210	200-240	…..	-18.4%
Al Safa	130-160	160-200	200-240	240-280	…..	-18.2%
Al Badaa	120-150	140-180	180-220	210-250	…..	-18.0%
Al Mankhool	110-130	140-170	200-250	240-270	…..	-17.1%
Al Manara	135-165	170-200	200-250	250-290	…..	-15.9%
Umm Al Sheif	135-165	170-200	200-250	250-290	…..	-15.9%
Al Rashidiya	…..	120-150	150-170	175-185	…..	-15.6%
Hor Al Anz	…..	100-120	140-160	160-190	…..	-15.4%
Al Warga	…..	130-150	150-170	175-205	…..	-15.2%
Al Mezhar	…..	130-150	150-170	180-210	…..	-15.2%
Al Muhaisna First	…..	130-150	150-170	165-200	…..	-15.2%
Al Tawar	…..	130-160	155-175	195-205	…..	-14.7%
Al Muteena	…..	110-130	140-160	180-200	…..	-14.3%
Nad Al Hamar	…..	140-160	160-240	190-220	…..	-14.2%
Al Garhoud	…..	180-200	210-250	240-280	…..	-13.6%
Al Khawaneej	…..	130-160	160-170	190-210	…..	-12.1%
Al Wasl	130-160	170-200	200-240	240-280	…..	-11.9%
Al Wahaida	…..	115-135	135-145	160-180	…..	-10.7%
Al Jafeliah	100-120	110-140	130-160	150-180	…..	-7.4%
Nad Shamma	…..	150-150	150-170	175-185	…..	-6.3%
Abu Hail	…..	115-135	145-165	170-180	…..	-3.9%
Al Qusais	…..	120-140	130-150	150-170	…..	0.0%
Al Hudaiba	105-125	130-160	150-180	170-200	…..	0.0%
Mirdif (Complexes)	No data available from RERA
Mirdif (Individuals)	No data available from RERA

Schon Properties Dubai - Back in the Headlines with negative News

source Xpress4Me

Investors suffer due to massive delay in project Dubai Lagoons

Anita Henry, a British teacher who has invested in a one-bedroom apartment at Dubai Lagoons, now faces a double whammy. So does Purvi Beri, an Indian advertising executive, and many other investors.

The units they bought are delayed for two years and the developer, Schon Properties, is “stonewalling” them.

“It now costs me Dh8,000 per month to rent, as they have delayed this build,” said Henry. “Now, they have advised me of a December 2010 completion – how disgusting is that?”

She said her one-bedroom unit at Dubai Lagoons – a 52-building project at the Dubai Investments Park (DIP) – was scheduled for a June 2008 handover.

“They have no intention of compensating anyone. I had planned my kids’ schooling around this,” she said.

Major payment

“In 2007, I sold my house in the UK and invested that money in a one-bedroom unit at Dubai Lagoons for Dh480,000,” said Henry, who has paid more than 63 per cent of the property price.

Purvi Beri is in the same bind due to the delay. “I am stuck. I took out a bank loan for Dh250,000 to be able to buy this unit. I sold property in India to survive and take care of my son’s fees. Since my property has not been handed over as promised, I was forced to move to my sister’s place. Now, the developers are asking me to pay more, but I’m not going to because the construction hasn’t even happened.”

Asher Schon, Vice-President of Schon Properties, said, “The project has been set back a little, due to numerous reasons,” he said.

“Firstly, the expansion of the two-lane road into a six-lane highway took out about 40 metres off our plot. Secondly, there was an internal feud between partners of our first contractor so we replaced them. We negotiated with the Roads and Transport Authority (RTA), who were cooperative. We are also working with investors to move them into zones that will be completed earlier,” said Schon.

 

RERA Dubai - New Law for settling Property disputes

sourche Xpress4me

Full refunds will be given to investors of real estate development projects that are officially cancelled by government property regulators under a pending law, XPRESS has learnt.

Under Law No 9 of 2009, Real Estate Regulatory Agency (Rera) has stipulated that if – after a thorough government review – a project is cancelled, all cash paid by buyers will be returned by developers upon termination of contract.

Effectiveness

Law No 9, which provides a sliding scale for refunds, has been signed and approved. The law however, only becomes official and legally binding once it gets published in Dubai’s official gazette.

Rera will apply the law and give directions to developers on what steps to take. Mohammad Kamal, Head of Real Estate

Rera officials couldn’t be reached for comment by press time. The new rules amend previous laws and will frame new procedures for “terminations of sale and purchase agreements for off-plan units and will set the damages payable to the developer depending on the progress of construction”, according to Lovells law firm.

Lovells stated that if a “developer’s project is cancelled by Rera” the “purchaser shall be refunded all monies paid to date”.

The changes may help unravel months of uncertainty by investors who have faithfully continued to pay instalments to developers who failed to begin any construction on projects to which buyers legally signed contracts.

“Law 9 will provide significant guidance to the real estate market and will clarify the uncertainty on terminations and damages,” said Lovells.

Mohammad Kamal, Lovells Head of Real Estate Middle East, said the final version of the new law contains the full refund provision for cancelled projects only.

Kamal was part of a Rera working group that helped draft the new rules.

“Rera will apply the law and give directions to developers on what steps to take,” Kamal said, noting that arbitration won’t be needed because “the disputes would be settled under the law”. Compensation rate

As previously reported by XPRESS, the new law contains a sliding scale that spells out the rate of investor compensation to be paid by developers based upon the amount of construction completed.

Roughly 875 projects are now being visited by government inspectors across Dubai to determine the progress of each development.

The new law, meanwhile, dictates that all terminations “must be served through the Dubai Land Department and the purchaser shall be given 30 days to rectify a breach”.

Sliding scale

The following is the percentage of refunds as provided for in Law No 9:

• 80 per cent completed: Buyer forfeits 100 per cent of cash he/she has paid to date
• 60 per cent completed: Buyer forfeits 40 per cent of purchase price
• Less than 60 per cent completed: Buyer forfeits 25 per cent of purchase price
• Construction hasn’t started: Buyer forfeits 30 per cent of cash he/she has paid to date
• When project is officially cancelled by Rera: Buyer shall be refunded all cash he/she has paid to date.

(Source: Lovells)

Comment of the Day - To the Case Shahram Zadeh against Al Fajer Properties Maktoum Hasher Juma Al Maktoum

April 10, 2009 comment from Salahudin

I am a lawyer & familiar with such disputes known as financial cases.

Its actually very simple, the judge has to appoint an Accounts Expert (Court Appointed Auditor), to examine the accounts of Al Fajer Properties, and it will be very clear if Sheikh Hasher Maktoum has invested anything. I believe the lawyer of Sheikh Hasher Maktoum, Sheikh maktoum Hasher & Al fajer will do their best to close the case before the court appoints an Expert to avoid the embaressement.

If Sheikh Maktoum Hasher Al Maktoum succeeds in closing the case without the court Auditor examining Al fajer accounts, then it will be a big loss to dubai justice system because it shows they are afraid the truth will come out!!!

Sheikh Hasher Maktoum should be smart and try to settle the case with Dr.Zadeh Shahram before it becomes a nationalembaressement for Dubai ruling family.

The Case Al Fajer Properties - April 8 , 2009 - Dubai court postpones 1.9 Billion Dollar case against Sheikh Maktoum Hasher bin Juma Al Maktoum, Sheikh Hasher Maktoum Juma Al Maktoum and Sheikha Maryam

DUBAI, Apr 08, 2009 (AFP) -

A Dubai court postponed on Wednesday a 1.9 billion dollar lawsuit by Shahram Abdulla Zadeh ( Iranian) gainst members of the ruling family over an allegedly lost property investment to give the defence time to prepare.

Lawyer Hussein al-Jaziri asked for a "long period of time to respond to the case," but the judge set May 4 as the date for the next hearing.

No one represented the defence during the first hearing, on March 11.

Iranian Shahram Abdullah Zadeh claims he invested the 1.9 billion dollars as the sole capital of a company, Al-Fajer Properties

Under United Arab Emirates law, only UAE and Gulf citizens may register property firms, and ruling family member Sheikh Hasher Maktoum bin Jumaa al-Maktoum is listed as the owner.

"I was the sole investor. Al-Fajer Propertiesis my company. Sheikh Hasher's only contribution has been the real estate licence as a sponsor," he said in March.

Zadeh, who was sacked as company president last year, is demanding the "recovery of all material assets of Al-Fajer Properties," according to legal documents obtained by AFP.

These include liquid assets and property, which are estimated at seven billion dirhams (1.9 billion dollars), and nine percent interest since the suit was filed.

"We have enough documents to prove he was the sole investor," Zadeh's lawyer Salem al-Shaali told AFP after the first hearing.

Sheikh Hasher is a brother-in-law of Dubai ruler Sheikh Mohammed bin Rashid al-Maktoum. Also named in the suit are his daughter, Sheikha Maryam, a partner in the company, and son Sheikh Maktoum, who was made president of Al-Fajer after Zadeh was sacked.

Their names were only made public on Wednesday.

Zadeh said he was detained by Dubai police at the time he was dismissed last year and held without charge for 60 days, and that his passport was confiscated and is still being held without explanation.

The case comes as several executives from high-profile Dubai firms are held on suspicion of embezzlement and as the once-booming regional business and tourism hub struggles to stave off the impact of the global economic slowdown.

ak/al

More about the case Al Fajer Properties
which must be seen also in relation to the pending case Dynasty Zarooni

Property Disputes Dubai - Mediation Centre

source The National

Dubai has created professional groups and a mediation centre to resolve the hundreds of disputes that have arisen among investors and developers as the property sector soured in the global economic downturn.

The initiative, an effort by the Dubai Land Department and the Dubai Real Estate Regulatory Agency (Rera), is designed to integrate the main participants in the property industry into a regulatory framework headed by Rera.

A mediation centre was established to help resolve disputes faster, away from Property Court. Currently, more than 500 cases are said to be pending with the court.

---

We need to have more communication between the main players in the market,” said Sultan Butti bin Mijrin, the director general of the Land Department. “Now is the time to form professional groups, not for today but for the future of the market. These groups will continue to build up and Rera will give them its umbrella and ensure transparency. An arbitration centre is better than going to court.”

“We need people to sit down “We need people to sit down together, speak and reach an agreement. And if they manage to, they won’t need to go through the whole process of going to court. It is quicker and free of charge.”

The centre has already resolved 95 cases over the past month, he said. “It has been very efficient before it was even officially established.”

The idea was welcomed by some as progress for the industry. “The establishment of a focused stakeholder community of consultation groups can only be good for future development of regulation and the broader property industry,” said David Nunn, a partner at the legal firm Simmons and Simmons. “However, it appears that lawyers and banks, for example, are excluded from the process, which is disappointing, given their key perspective and experience.”

As early as next month, property investors, developers, brokers and evaluators will each form groups within Rera. These professional committees will meet regularly with Rera to review and develop a regulatory strategy and create plans to manage conflicts that come up in the property sector.

Recently, several groups of investors have been filing petitions to developers regarding cancelled projects or other issues. Last week, a hundred investors delivered a petition to Nakheel’s Dubai sales centre, urging the developer to reschedule payment plans for villas on Palm Jebel Ali because of delays.

Emaar said this month that it was considering cancelling or postponing three projects after a petition from the Emaar Investor Group.

“We welcome the Land Department’s initiative greatly and would like to be part of it,” said Nigel Knight, a co-founding member of the Dubai Property Investors Group. “Last time we met Rera we had suggested to create an investors’ advisory panel. Following that, we were asked to give proposals, which we did.”

His group is Dubai’s largest investors’ coalition with more than 600 members and investments in projects worth Dh3.2 billion. In January, they gave Rera a petition that demanded, among other things, the cancellation of projects that are not being built.

The investors have put about Dh600 million into those projects so far, but are reluctant to keep paying until they have assurances that the developers will be able to finish the projects, Mr Knight said.

Individuals and homeowners’ associations can be part of the new investors’ community within Rera.

Investors’ groups, which were not part of a regulatory process, will be part of this new process. “Everybody was sending their own messages,” said Marwan bin Ghalita, the chief executive of Rera. “This is not good. Now, they will discuss together and we will send their recommendations to the government.”

Yesterday’s announcement is the latest in a series of steps taken by the Government to increase confidence in the market. In February, RERA announced that the agency next week would begin publishing monthly progress reports on each of the 695 projects with escrow accounts. The reports of progress made on the developments will be published online and also contain photographs of construction progress.

Dubai Property Court - Developer must repay 7.4 Million AED

source The National

25 March 2009

DUBAI // A property developer has been ordered by the Dubai Real Estate Court to return Dh7.4 million (US$1.38m) on the sale of several apartments to a buyer after failing to register the sale with the Dubai Land Department’s property register.

The court ruled the sale null and void yesterday and ordered the developer to pay nine per cent interest to the buyer on the money from the date of the sale last April. The developer must also pay the full court costs.

According to a statement issued by the Dubai Courts Department, the ruling is the first of its kind to cancel a property sale since the court was established last August.

In his summary, the presiding judge, Omar Miran, said the law stipulates that any transfer of ownership or other property transaction not registered in either the land department’s property register or its preliminary property register is null and void.

The law gives developers a 60-day grace period to register all property sales concluded before that date. Failure to do so also renders the sale null and void.

The sale in this case was concluded on April 8. The buyer filed his case on Jan 21 this year, asking the court to order the developer to refund the money he had paid for the apartments plus 12 per cent interest.

RERA Dubai Project Indicators now online

For more information click: RERA Dubai

The Announcements RERA Dubai made in 2009 - Kippreport

Click to get the answer

Schon Properties in Problems ? - Developer call on UAE banks to resume lending

A high profile Dubai developer has called on banks in the UAE to resume lending as soon as possible in a bid to restore confidence to the struggling real estate market.

Danial Schon, vice president, Schon Properties which came under fire from investors last year after long delays to its flagship Dubai Lagoon development, said he hoped to see banks take action in the next six months.

Schon, who believes the correction in the Dubai property market will last until June or July, said: “People are losing jobs, visas are being cancelled, traffic has decreased. Banks have a major role to play in building confidence. My worry is that banks will act later rather than sooner

"If they do this and come in 2010 instead of this year, this will be bad for the real estate industry.”

He added in an interview with Arabian Property: “The major thing I see happening over the next six months is banks will start to give mortgages again. Their job is to give end-user financing to residents. Mortgages are such an important function of the real estate cycle.

"Here, there are excessively high mortgages and they are very limited and there is a lack of mortgage flexibility – this market has been running on cash which can only last so long.”

Schon Properties’ Dubai Lagoon project has come in for criticism after the seven billion sq ft development, to consist of 49 buildings and around 4,000 apartments, saw completion dates slip from December 2007 to 2011.

Schon said one reason for the delay was the plan by the Roads and Transport Authority to build a six-lane highway in close proximity to the development.

After months of negotiation, Schon Properties eventually gave up 10 metres of land to the transport authority.

The Dubai Lagoon concept is about affordability and Schon added: “In Dubai, real demand from end-users was for affordable living. If you see the percentage of affordable property compared to high-end, luxury developments, it’s 10 percent affordable housing and 90 percent luxury and luxury developers are the ones taking the hit.”

However, Schon said he believes Dubai will recover quicker than other places.

“It’s a very dynamic place and now is the time you’ll find out who the true believers in our city are and those who only speculate,” he said.

refered by ...... ->
url is -> www.arabianbusiness.com%2F548127-developer-calls-on-uae-banks-to-resume-lending

RERA - Encouraging signs for Dubai’s property sector - The National Newspaper

Encouraging signs for Dubai’s property sector - The National Newspaper

DUBAI // The Dubai property market may be closer to reaching its nadir with assurances this week that the Government will help its fully and partially owned property companies meet their obligations, and the announcement of a new raft of regulations to make the market safer for investors, analysts say.“Sentiment is not just going to improve overnight, but announcements like this suggest that some stimulus is possible,” said Sana Kapadia, a property company analyst at EFG-Hermes. “It is still expected to take some time to fully take shape.”
The past six months have been tough for the sector. After a period where prices were jumping by leaps and bounds every week, the cost of homes in places such as Burj Dubai Downtown and the Palm Jumeirah have dropped significantly. The Land Department reported on Wednesday that the value of property transactions in the first two months of this year had fallen by 45 per cent to Dh14.7 billion (US$4bn) from Dh26bn in the same period last year. Banks and consultancies have given even more dire prognoses for the sector.
But on Wednesday, the property market in Dubai received two substantial shots in the arm. First, Nasser al Shaikh, the director general of the Dubai Department of Finance, said that government-controlled property companies would be the first to get funds from the $10bn that Dubai was borrowing from the Federal Government.This is important, because a big part of the lack of confidence in the market stemmed from concerns about the ability of major developers to pay their debts and finish projects. Nakheel, the developer behind iconic Dubai projects such as Palm Jumeirah and The World, has to refinance a $3.5bn sukuk in December. Others, such as Sama Dubai and Emaar Properties, are dealing with a sudden lack of revenue, forcing them to lay off staff and slow projects.
“There is a serious cash flow problem with the big developers,” said Chris Dommett, the chief executive of John Charcol, a mortgage advisory firm in Dubai. “They’ve stopped paying their suppliers and contractors. Everything relating to them is grinding to a halt. They need an injection very quickly.”Just across town, at another press conference on Wednesday, the Real Estate Regulatory Agency (RERA) was laying out a series of new guidelines that will change the way property is developed, bought and sold in Dubai.
Marwan bin Ghalita, the chief executive of RERA, said the agency next week would begin publishing monthly progress reports about each of the 695 projects with escrow accounts.The move was made to increase trust in the property sector. Since the downturn began, investors have been scrambling to get information about the buildings in which they had invested, to determine the safety of their money. In some cases, buyers have refused to pay instalments because they were afraid the project would not be finished.
“The trust that you have put in Dubai and the transparency you asked for is there,” said Mr bin Ghalita, adding that the landscape of the market would change dramatically this year, with cancellations of projects and mergers between developers.Mr bin Ghalita also announced that no new project would be able to begin sales unless the land on which it was to be built was fully owned by the developer and at least 20 per cent of the finances needed to build it had been secured.
After meeting those standards, developers will be able to collect no more than 30 per cent of the purchase price before starting construction, after which payment plans will have to be connected to construction milestones.And to prevent prices from sliding too far as the economy evolves from a market dominated by speculators to one controlled by people who want to buy a home for themselves, Mr bin Ghalita said the Government would control the supply of units coming onto the market by limiting the number of developers and building permits.
Hundreds of companies have been struck off RERA’s list of registered property developers because they were unwilling or unable to launch a project, or because they had merged with another company. Mr bin Ghalita said housing projects could be split into four broad categories: those that will be cancelled; those that will be rescheduled; those that will be merged; and those that will be completed on time in the next two years.
Bobby Sarkar, an analyst at Al Mal Capital, said the changes would help repair confidence in the market. “Announcements like this are positive for sentiment,” he said, “but the inflection point will be when the market becomes more dynamic and transactions stabilise.”For this to happen, home finance lending needs to be revived. There have been indications that some of the $10bn will make its way to banks, but they will not be lending at the rates or volumes that took place in the summer. The planned government-backed mortgage lender, Emirates Development Bank, has not yet announced when it will become operational or how much money it will have to lend.
Analysts say this is why the market is still at the beginning of a long recovery process.“What people need to see in the market is stability and that is what this process is trying to achieve,” said Chet Riley, an analyst at Nomura Securities. “These announcements help but they are not a panacea. At an individual level, we’ve still got some big problems in the system. People can’t get mortgages. It’s going to take time.”bhope@thenational.ae

RERA Dubai: Property Buyers may move court for cancelled contracts

Buyers may move court for cancelled contracts:

Property buyers can contest their "terminated" off-plan contracts, signed after August 31, 2008, in the newly set-up Property Court, but will have to go through the Dubai Land Department (DLD), a senior government official said."

The purchaser will be further able to seek compensation from the Property Court if he establishes a ground for the termination," Emad Eldin Farouq, Senior Legal Counsel, Dubai Land Department, told Emirates Business.In November 2008, the Land Department in an administrative circular, said developers – not buyers – would have to initiate the official procedure to cancel the off-plan transactions.

But for sales contracts, signed before August 31, 2008, the terms and conditions of the contract will be applicable for the two parties under the UAE Civil Code. However, these would not have to go through the DLD.

In the internal administrative circular, the department gave the interpretation of the meaning and practical application of Article 11 of the Law No.13 regulating the interim real estate registration.

According to this circular, in case of a termination of an off-plan contract, the developer shall be entitled to 30 per cent of the purchase price plus 30 per cent of the any further monies paid above 30 per cent of the purchase price."In case of a cancellation of an off-plan contract where the purchase price is Dh1 million and the purchaser has paid 40 per cent of the property value, then the maximum claim the developer can make is of Dh330,000 (30 per cent of Dh1 million and 30 per cent of the remaining 10 per cent)," he said."

If a buyer wants to contest this, he can go to the Property Court which shall apply the civil jurisdiction on this. Nobody can prevent the buyer from going to the court. Further, the Property Court may or may not agree with this and they can choose to either cancel these terms or they can adopt it or they can apply any other rules to this. The Property Court will look at it based on the rules and regulation in place under the Civil Code Law," added Farouq.

Legally any agreement can be terminated either amicably, voluntarily or can be terminated by a court order based on the facts.

Under the Civil Code, the purchaser has the right to terminate the contract if there is a breach by the seller.

The purchaser is entitled to refer the matter to the appropriate court with jurisdiction (which is now the Property Court)

Mohammad Kawasmi, Senior Associate Al Tamimi & Company, said: "We are not aware if the administrative circular issued by the DLD will hold true in the Property Court and they can choose to override the circular."

Earlier this week, Farouq told this newspaper that investors facing cash-flow constraints can approach the Dubai Land Department for rescheduling payments for their properties.

Register onlineDevelopers will have to register their off plan and completed units through the Dubai Land Department's online registration system, said Farouq.Called Oqood, the new system will enable effective implementation of Law No13 of 2008 for regulating the interim real estate register in the emirate.

Developed by Emirates Real Estate Solutions for the Dubai Land Department, the Oqood online interim registration process will lead to minimising conflicts arising between developers, investors and sellers, while contributing to cutting down the escalating off-plan selling and reselling costs.

Charges will be the same as levied by the Dubai Land Department – one per cent of the total value paid by the seller and one per cent to be paid by the consumer. Following the issuance of Law No 13, developers now have to register all their units prior to launch of the project and only then can they proceed with their sales.

The law aims to create further consumer ease and protection within the Dubai realty market.

Strategic plan for commercial courts

Strategic plan for commercial courts:

"119,843 cases were presented to the emirate's courts in the first 10 months of the year."

Foreign experts in judicial and international economic affairs are helping to develop the operations of commercial courts set up in Abu Dhabi earlier this year.The specialists are drawing up a strategic plan for the coming years that will enable the courts to arbitrate in economic disputes, including those involving the Abu Dhabi stock market.The source said there were no plans to scrap the courts as the department regarded them as highly important.Meanwhile, the department's annual report said yesterday 119,843 cases were presented to the emirate's courts in the first 10 months of the year.

Dubai Property Court - Most disputes involve payment defaults

original published http://www.business24-7.ae/

Most disputes involve payment defaults

Disputes involving payment defaults resulting from construction delays form the largest category of cases registered so far with Dubai's new Property Court.

Seventy-one cases have been registered with the court, which began to deliver judgments earlier this month. All the cases so far have been filed by buyers but officials expect developers will start to launch legal actions too.

The number of cases before the court exceeds 500, as hundreds have been pas-sed to it by the Real Estate Regulatory Agency (Rera)."

The court started considering cases this month and has so far passed judgment on four cases," Chief Judge Mohammed Yousuf Sulaiman, Deputy Director of Dubai Courts and Cassation Court's Senior Judge, told Emirates Business."

Two have gone in favour of the defendant and two against," he added.Judge Abdul Qadir Moosa, Chief of the Court of First Instance (Properties Court), said: "We can only proceed with cases if the parties involved come to the court and register their contact details. Many people are aware their cases are pending but have yet to come to us. We will go ahead once they do."The court is currently seeking the advice of real estate experts holding high positions in the government and members of the Ruler's Court to assist the judges in the decision-making process while passing judgment on cases. The experts who are brought in will have to be approved by Dubai Courts and will have to swear that they will pass on any advice in an unbiased and fair manner."

The time between the registration of a case and the judgment will on average be 52 days, say officials.
Chief Judge Sulaiman added: "The process is that after registration we notify the parties involved about the case and ask them to register their contact details with us. Then they have a consultation with our team members and we arrive at a decision.

The 52-day timeframe is a record compared with the length of time taken in courts abroad.

Dubai Courts arrive at decisions much more quickly than other courts in the region."The time is needed because we have to follow the procedures set out by the law but once the decision is made then passing judgment does not take long."The court has not so far recruited any extra judges but will do so depending on the number of cases that are registered.

Officials are also considering publishing a property guide that will include details of Dubai's freehold regulations.

Dubai Property Wrongs

November 2008

original published Gulf Business
over
http://www.zawya.com/printstory.cfm?storyid=ZAWYA20081007053225&l=053200081007


Real estate investors are crying foul over project delays and cancellations. While developers blame surging inflation, the regulators are rolling out new laws to make the market foolproof. But is enough being done, asks Seban Scaria.

Dubai-resident Manish Kumar was looking forward to moving into his own studio apartment in a plush tower next to the Emirates Road in July this year. After all, he had been diligently making his payments to the Saudi developer behind the project for a full two years.

Delays being the norm, not exception, in Dubai construction, he was disappointed to learn that that date would be missed. But nothing prepared him from the shock of finding out the company hadn't even started building the tower, and, was instead cancelling investors' contracts.

Local and international investors had purchased off-plan units in the 20-storey Ivory Towers project by Saudi-based Sokook Investment Group. Launched in 2005, the project was supposed to be completed by 2008, but the development began to show the proverbial cracks last February when Sokook told investors to stop paying their instalments due to a dispute with Tecom, the master developer of the International Media Production Zone.

The scandal has been making its way through the local media, with deadlines being set by the Real Estate Regulatory Agency (Rera) for the company to start construction.

However, with the November 1 deadline for construction to start just round the corner, the 40-strong group set up by investors to safeguard their rights is not satisfied by the answers from either Sokook or Rera.

Sharon Anderson, an Australian investor, had booked two studio apartments in the Ivory Towers project back in 2003 and had paid Dhs218,000 ($59,390), about half of what she owed in total. Sharon, along with her brother and sister who also had invested in the same project, is now demanding answers, and is clinging to the hope that her money isn't completely lost.

Hers is becoming an alarmingly familiar tale. According to experts work on more than 150 projects across the GCC is currently on hold. Gulf projects valued at $48.4 billion are either on hold or have been cancelled, according to Proleads. They include at least 88 projects in the UAE, 54 in Saudi Arabia and 15 in Kuwait.

Although Dubai real estate regulator Rera has directed the Saudi based Sokook Investments to reinstate contracts, issue a new payment pattern and deliver the building by 2011, Prakash Parmer, one of the several investors in the Ivory Tower project, who had already paid 60 per cent for a one-bedroom apartment, is still not clear whether the company will complete the construction.

Engineering a scam"This is a clear scam.

The developers trying to scare small investors into liquidating contracts for trivial sums, saying they might lose their investments as the project is delayed due to surging raw material prices. This is happening when Rera clearly states that cancellations are illegal," says Parmer.

"Ivory Tower was initially designed to be 12 floors, but now they have redesigned it to have around 20 floors. The developers clearly don't want to start construction but to make money based on the off-plan selling model," he says.

Earlier, Rera said action would be taken against master developers and sub-developers if they fail to meet contractual obligations. Rera has dismissed reports that Sokook has cancelled the contracts. According to Rera, it has mediated the issue between Tecom and Sokook.
Investors, however, question Rera's stance. "If Rera can tell us how much funds remain in the escrow account it will be a clear indication of whether Sokook can complete the project. Also, why is Sokook sending us fresh contracts with no penalty clause when Rera clearly states that cancelling a project is illegal?" asks Parmer.

Gulf Business took up the matter with Rera, but the regulator failed to reply to repeated queries from this magazine on the investors' woes.

Surprisingly it is not only the low profile builders who are playing the elusive game or delaying projects.

Leading developer, Schön Properties had to stop work on its Dubai Lagoon Project, tossing investors into a pool of pain and dilemma. Twenty-five out of 2,000 investors, whose properties were due for completion in December, have been told they can have their money back. Schön later said that in spite of previous problems, Dubai Lagoon, a residential development near

Dubai World Central, is back on track and would be delivered, albeit with a delay.

According to the developer, the project has engulfed with several problems, including work being delayed because of requirements by Dubai's Roads and Transport Authority (RTA), issues with contractors and the blocking of a work permit. "The RTA wanted to take 45 metres off our land for the Metro's Purple Line. So, we had to redesign the whole project," says the company.

To protect its margin, the company has decided to sell the remaining plots at higher prices and the whole development is due for completion by 2011, as the project's budget was more than doubled due to the rising construction and raw material cost.

Pumping up confidence

While most of the constructors blame the surging prices and non-availability of raw materials such as cement and steel for project delays, manufacturers insist materials are freely availabile in the market. Besides rising cost of materials, the other reasons usually cited for putting projects on hold are: delays in approving designs, design changes and disputes between contractors and developers.

With complaints from investors soaring, Rera is now under pressure to add a shot of the much-needed confidence to the market. The regulator has issued a new property law, requiring all off-plan units to be registered with Dubai Land Department, which is expected to make Dubai's real estate market a safer place for people to invest their cash.

Dubai has also moved to calm concerns over the rapidly growing mortgage market, where central bank data shows that mortgage lending in the UAE jumped 55 per cent in the year to March, with Dubai responsible for the lion's share. A new mortgage law, which comes into effect by the end of the year, stipulates that mortgage contracts be registered with the land department, specifying the size of the loan, the repayment period and the value of the property to which the loan is linked.

Research conducted by Colliers International, in the second quarter, in Dubai and Abu Dhabi highlights that by 2010, almost 160,000 new residential units are expected to be delivered in Dubai, with total office supply in the emirate expected to increase to 4.9 million sq m. Also, the number of hotels and hotel apartments is expected to cross 50,000 units by then.

In Abu Dhabi, an additional 100,000 residential units will be required by 2010 to absorb excess demand and as many as 140,000 additional units are expected between 2011 and 2013, assuming developments are completed on time.

"Dubai is certainly a safer place to invest than it was three years ago. There has been a sustained focus on introducing new laws and developing Land Department procedures with a view to achieving an appropriately regulated and transparent real estate industry. We would expect this trend to continue and, with the introduction of the new property court, a level of confidence to return to the market in due course," says Will Grinter, Legal Consultant, Clyde & Co.
© Gulf Business 2008