Nakheel’s Legal Battles Are Depriving Investors Of Property OwnershipWednesday, June 13, 2012
According to sources, investors in the two projects of Nakheel have not been getting ownership of their completed property for nearly two years. The reason behind the investor’s inability to gain ownership is the ongoing legal battles between the third party contractors and Nakheel.
The owner of one of the islands on ‘The World’, Sao Paula Development, claims that Nakheel has backed out on an agreement as per which Nakheel had to transfer funds it had paid into Jumeirah Village plots. Since Nakheel has backed out of the agreement, it is suing it. Diamond Developers, the joint plaintiff in the case, reserved the plots in real.
More than 250 investors are deprived of ready property ownership due to this ongoing legal battle. Since the units cannot be handed over until the case is resolved, one of the investors said that they do not care who wins because they only want the case to be resolved soon. They also added that whatever is the issue, when the property is ready for two years why is it not being handed over?
As per the documents of the court, Diamond Developers says that for 253 property units, they have been unable to secure final payments and issue completion certificates. Diamond has obligations of approximately AED 45 m to contractors and third parties. This case is currently before the Dubai World Tribunal.
In addition to this case, there is another case where investors are not getting ownership due to legal battles of Nakheel. Nakheel is also facing a battle with Souq Residence, which is a joint venture between of a unit of Dubai World and Ifa Hotels & Resorts in Kuwait. Nakheel is suing Ifa for return of advance payments, since they say they have cancelled the agreement and must receive a refund. They’re asking for a refund of about AED 100 m in advance payments to buy units in the Golden Mile ground floor.
Investors in the Golden Mile last year also threatened to terminate their contracts, since they are deprived of ownership of their ready apartments for nearly 2 years. Ifa, on the other hand, claims that the agreement was not cancelled and Nakheel is liable to pay around AED 1 bn in arrears. It also highlights that investors are not given access to the units because Nakheel is not giving the certificates required for handover. This case is also now before the Dubai World Tribunal.