Tenants Avoiding Palm Property Due To Ongoing Battle Over Service ChargesThursday, June 28, 2012
According to sources, tenants are losing interest in Palm Jumeirah apartments due to the ongoing battle between landlords and Nakheel over the outstanding service charges. This battle started in December when Nakheel restricted access of 1300 residents from gyms and the beaches at Shoreline Apartments Residences. At that time, Nakheel said that the landlords owed it US$ 20 m in service charges.
The battle intensified when Nakheel drained out 6 swimming pools last week at Marina Residences Towers. Nakheel claimed US$ 4 m unpaid service charges from the owners of property in these residences. Sources say, though Nakheel has started to refill the pools, this action has badly affected its reputation and tenants have started to shun its residences. The high negative publicity of Nakheel has led tenants to ask for rebates for rent and some are even seeking to relocate somewhere else. Mario Volpi, head of leasing and residential sales at Cluttons, says that they have a wider selection of properties to offer and have noticed a reluctance towards the property on Palm Jumeirah. Moreover, he said now the main concern of tenants is to look for the landlords, who are up to date with their maintenance charges.
Assistant manager of leasing and residential sales at Better Homes said that some tenants on the Palm no longer wish to continue their leasing. No or limited access to the amenities is forcing them to look to get out of their leasing contracts. Some tenants who have been asked to enjoy access to facilities as a part of their contract are now asking for compensation from the landlords.
One of the tenants who recently moved to Marina Residences highlighted that many developers have unpaid service charges but no one is recovering them the way Nakheel is doing. He further advised tenants not to rent out property on Palm. Volpi also said that these ongoing actions are badly destroying the reputation of Nakheel, since the decision of banning residents from facilities is heavily criticized by almost everyone.
The chairman of Al Habtoor Group, Khalaf Al Habtoor, have slammed Nakheel is saying that the decision of banning access to facilities is not approved by the government. He further added that he is 100% sure that the higher authorities don’t know about the matter. Nakheel is shown to make money for the government but it does not know that it’s spoiling its reputation over less money. He also said that Nakheel is also damaging the reputation of the country.