Ghost Projects – A Lurking Problem For Investors In Dubai!Tuesday, April 03, 2012
Developers can cancel any project any time and many of them do so. This practice however, makes things complicated for investors for whom recovering their money becomes a headache. Similar case was reported from Dubai where investors bought properties in Jumeirah Village community but can’t get their money back after the developer cancelled the project.
Spring Cluster, a cluster of apartments that was planned in the Season’s Community but could not take off as it was scheduled to launch in January 2008. The situation left the investors in a hapless situation as the developers committed a series of contractual violations. The investors also claimed that the work on Summer and Autumn clusters began but the Spring Cluster was cancelled along with Winter without any prior notice.
An investor told the media that investors are struggling hard to get their hard-earned money back from developers but without luck. The developers themselves are not willing to honor any sales and purchase terms according to agreement. The developers have neither informed the investors about the cancellation of project nor have they given any reason to the investors for canceling the project.
Some investors claimed that developers have given them a consolidation offer by giving them the option to take up an apartment in the Autumn Cluster after paying more to them but many investors have refused to take this option based on their previous experience. Investors want their money back from the developers. Their frustration is mounting up as they have contacted Dubai Land Department but the officials did not attend to their queries.
The situation is really worsening especially for those investors who have paid 70 to 85 percent of the apartment cost through bank loans. They are not even in a position to return the loan to the banks. According to law, the developers will have to refund the money to the investors within 14 days of cancellation of project and if it is done through escrow account and escrow cannot cover the refunds, the developers have 60 days to return money to the investors.
To get the viewpoint of the developers, we tried to contact a few but neither of them seemed to keen to comment.