DISTRESSED PROPERTY INVESTOR
Investor 101
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Diary of a distressed property investor, Part IV - - RERA and other Departments you need to survive ? your property nightmare in Dubai
Posted by 7starsdubai on April 1, 2009
We know that property investors are struggling, and for the most part, we know why. But what most of us don’t know are everyday struggles they’re going through. One investor agreed to write a journal of her experiences for Kipp. We asked her to be ruthless: she obliged.
Click here to read Part I
Click here to read Part II
Click here to read Part III
Ah Rera. I loved the new regulations and
announcements you made over the past eight months, and the threats you
were making to incompliant developers raised my hopes that you’d come
through for me.
I was wrong. Mind you, I know you have good intentions. All the announcements you’ve made recently are very nice, but it’s too bad that no one in your building has heard of them.
After months of waiting for my good-for-nothing developer to come through with either an announcement that they’ve broken ground or that they’ve cancelled the project, I decided to go to Rera to understand my rights, and to know what I would need to do to cancel my contract and get my money back.
Before I went, I called the authority a number of times to know what documents I needed to have with me to argue my case. Aside from the contract and the receipts, Rera asked me to prepare a letter explaining everything that had happened up until that point, and to outline – in detail – why I wanted to cancel my contract. I wrote it, printed it and filed it along with the hundreds of papers I had gathered about my developer.
I was ready!
Unfortunately, however, Rera wasn’t. I was told to get a number and wait for my turn at counter two. There was no one attending to counter two. I waited. I sat there with a file on my lap determined not to lose my temper, and waited for over an hour and fifteen minutes. No one showed up. I asked around if someone actually works at counter two, and I was told to be patient. So I waited some more.
And then, the guy sitting at counter one asked me what my issue was. I told him, and he said: ‘You shouldn’t be waiting here. You should go to the fourth floor, room 413, and speak to a legal consultant.’
So I went to room 413, where I found a waiting room with three people: two men and one woman, each sitting behind a desk chatting. I sat down and waited. Finally, one of the consultants turned to me and asked me what the problem was. I explained the whole thing. He said I should take my case to the Dubai Courts, and to speak to someone in the real estate section. I asked him why I had been told to come to Rera. He said he didn’t know.
Neither did I.
So I went to the Dubai Courts. I asked where the real estate department is, and I was taken by a helper to the department, and that’s when it hit me: no wonder developers feel they can do what they want. The department was made up of four men, two of which were throwing paper balls at each other, the third guy, the receptionist, was playing a game on his phone, and fourth man, the only one who was helping, was neither in mood nor capable of speaking English.
I spoke to him with my broken Arabic, explaining the mess I’m in and what I need from my developer (my money, my dignity, plus 9 percent interest). He was helpful, and once we got talking, he proved to be helpful. But the process he outlined hurt my brain.
He told me to draft a letter stating all the laws my developer has broken, and have it translated in Arabic. Then I should go to the public notary at the Dubai Court and have the letter authenticated. The court would then send the letter to the developer in the hopes that the mavericks would run to their escrow account and withdraw my cash.
If that doesn’t work, he said, go to court.
Court! I have never gone to court before. I didn’t even know how much hiring a lawyer costs. So I called a number of British and Emirati law firms to get an idea.
Apparently, here’s how it works: if I seek legal representation from a foreign lawyer, I’d have to pay him or her up to AED1,800 an hour for the ground work, but I’d also have to pay court fees and hire a local lawyer – who’d get up to 15 percent of what the court awards me – if my case goes to court. So, my foreign lawyer would act as a consultant to my local lawyer; in short, I’d have a team of lawyers, and I could kiss my present and future savings goodbye.
Or, I can go straight to a local lawyer and pay him or her directly. But then I wouldn’t have peace of mind.
It’s a tough choice, especially given that what little money I have is tied in a phantom property.
I was ready to give the translator and typist the
letter that I drafted for Rera, but then I realized that I still have
no idea what my rights are. How am I supposed to know if my developer
has broken property laws if I don’t know what the laws are? And what am
I supposed to understand of the property laws if most of the people I
encountered at Rera and the court each told me a different story? The
only laws I can reiterate are those that have appeared in the press,
such as the much-contested and highly controversial Law 13. And to be
fair, I don’t even know what it actually says, I just like the fact
that investors have won cases because their lawyer’s cited it in court;
last week an investor won his money back because his developer failed
to register the transaction 60 days after it took place…thank you Law
13. Incidentally, does anyone know how to find out
whether your property or transaction has been registered with the Land
Department? In any case, I decided against having my letter
translated. I didn’t want my developer to read a ‘threatening’ letter
that had gaps. I wanted them read something that’ll knock them
unconscious. All I need now are the laws. Does anyone know where I can find them…in English?
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Claims of scams, fraud, and embezzlement are hitting the real estate market in Dubai.
The multi-billion dollar construction craze which has attracted investors from all over the world, has seemingly brought in unsavoury types who have been preying on the never-ending appetites of locals and foreigners lining up to invest in the market.
A German company which claimed to have acquired a 2000-apartment plot in the proposed all Dubai’s projects, has reportedly sold off apartments in the plot, with no prospect of them ever being built. The company, Pyamod German Developments, and its Fraud associates, and sales agents, are being investigated by Dubai and Germany authorities.
- German Sports Tower I
- German Sports Tower II
- Munich Millennium Office Tower I
- German Supreme Residences I
- German Supreme Residences II
- German Supreme Tower I
- German Supreme Tower II
- German Design Tower I
- PYAMOD Paradise
- German Design Villas
- German Skyscraper I
- German Sky Tower I
- German Sapphire Tower
Dubai authorities are also investigating the mysterious German Towers being constructed at Dubai Sport City, JVS, Slilicon Oasic . As we reported several weeks ago, Roland Paxino & Partners .sold several hundred apartments in the project off-the-plan some years ago, over 10 projects taking payments upfront. had sold the project on the basis that it would have been ready by June 2008. So far, no construction have been started. Roland Paxino left Dubai Dec 2008, and work has stopped.
In recent weeks I’m owner of twenty flats receiving calls and faxes from representatives in Pyamod Developments advising me construction on the project had stopped and would not be resumed. I have been offered their original cost, deducting 9% commission to Real Estate Agents + 3% documentation fee, back. Means 12% less money that I invested 4 years ago, losing more than 7million AED in deposits after Roland Paxino abandoned the scheme and fled the country to Europe “We lost our money, our flat, our future — everything,” with a sales brochure promising prospective buyers that it would “add comfort, security and joy to your life”
We have sighted one of the letters sent which verifies the investors' claims. Over several hundred by order of Dubai Court in favour of the Case No 361”. Buyers are also considering a criminal action against Roland Paxino for fraud.
When we visited the site two weeks ago we found no construction in progress. We contacted the builder on site who confirmed Mr. Roland Paxino sold the site to the newly-formed, UK-based, Properties. A Sales Agent however quotes a company spokesman as saying, 'We sold the towers on again a week back.'
Having bought their apartments and paid for them almost in full, well before construction started, I am now wondering how 'my' apartments could be on-sold, on two separate occasions since.
Several calls to Sport City Properties, the master developer of Dubai sport city, where the project is sited, have not been returned.
Meantime the investigation into the conduct of the former CEO of, Pyamod German Developments , has been widened. According to Dubai's Attorney General, few persons has been arrested in connection with the investigation.
Two other men have also been detained and questioned, but have since been released.
A hastily convened meeting by the authorities, involving Pyamod and Master Developers, resolving the matter. That action averted a class-action lawsuit against Pyamod by at least sixty angry investors, most of whom were from Iran. ""
From: Investor 101 <invest...@live.com>
To: dubai property - investors <dubai-proper...@googlegroups.com>
Sent: Thursday, April 2, 2009 9:55:54 AM
Subject: [Dubai Property Investors] DISTRESSED PROPERTY INVESTOR