Dubai homeowners go on offensive

Complaints against property developers include broken locks and excessive, unexplained fees.

Michael Aldendorff, far right, prompts other Discovery Gardens tenants and homeowners to come up with measures to get Nakheel to fix outstanding structural problems in the Mediterranean Cluster yesterday.
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DUBAI // In an increasingly familiar display of discontent with the property market, two dozen residents of Discovery Gardens gathered yesterday to petition for more transparency and better property management services.

Homeowners in the community pay annual service charges of Dh30 (US$8.17) per square foot, among Dubai's most expensive, but accuse its developer, Nakheel, of not fulfilling its building maintenance and service obligations. Their complaints include broken door locks, frequently clogged toilets and unstable balconies, and slow repair service. Many also say they have not received apartment title deeds, which verify ownership, despite purchasing their units months ago.

"We want to make it very clear to Nakheel that if they don't fulfil their agreement as to what is stipulated on their turnaround times for maintenance, then we want our money back," said Michael Aldendorff, 39, an apartment owner in the 50,000-resident community who helped organise the demonstration. "Either they serve us the next year for free, and they improve their maintenance substantially, or they give us back the money that we've already paid in maintenance fees."

The group plans to get 400 signatures for two petitions to be delivered to senior officials at Nakheel and Tamweel, the country's largest home lender by volume which has financed purchases at Discovery Gardens. In the other petition, homeowners are demanding breakdowns of Dh32,000 in fees that have been added to their expenses but not clearly explained by Tamweel. "Till now, I really don't know which fees are for what - there's absolutely no transparency," said Doaa al Ghamrawi, 32, an Egyptian who purchased a one-bedroom flat financed through Tamweel.

Officials at Nakheel and Tamweel could not be reached for comment yesterday. But in an e-mail sent on Thursday, a Nakheel spokeswoman said the responsibility for title deeds was not Nakheel's but that of the building owner. "Nakheel, however, is assisting building owners in facilitating the registration of the titles with the Dubai Land Department," she said. She said the company had reviewed the existing service fee structure "to take advantage of recent reductions in cost of services" and that homeowners could expect a reduction.

Asked about the deficiencies in services alleged by residents, the spokeswoman said: "Nakheel is committed to providing the best possible service to all our customers. We have a 24 hour customer service call centre for residents, and we endeavour to address service requests in a timely manner." The spokeswoman, who declined to be named for unspecified reasons, did not give further details about the reductions.

Juergen Schmidhofer, a 41-year-old German flat owner in Discovery Gardens, said his maintenance and cooling fees were unjustifiably high, about Dh2,000 a month, for the quality of service he receives. "Why don't they use a normal electrical meter like they do in Germany to determine what you pay?" he said. "That would save us all money and energy." Meanwhile, Flo Weisweiler, 28, a German national who rents a one-bedroom flat in International City, said months of complaining by residents had essentially yielded nothing from Nakheel, the community's developer. "We're not asking them for miracles here," he said. "We just want basic maintenance, security, proper paint on our walls."

Hallways and façades in the 60,000-resident complex were crumbling and besmirched by dirt, he said, while odours from a nearby sewage-treatment plant continued to permeate the area. Municipal and federal rules were also not enforced, evidenced by the scores of labourers moving into studio flats or residents smoking in such communal areas as elevators or hallways. "We told Nakheel that a lot of people smoke inside buildings, in the elevators, and that they set off alarms," Mr Weisweiler said.

"We asked them to put up no-smoking signs, but they said they didn't have a budget for that." In Jumeirah Lake Towers (JLT), Paul Vincent wonders why he and other homeowners are asked to pay high maintenance and service fees when basic amenities have yet to be built. Despite trying on several occasions to obtain a breakdown of the Dh25,000 in yearly fees, there has been no response from JLT's master developer, Dubai Multi Commodities Centre (DMCC).

"You can't go out in the night-time because there is no street lighting and no sidewalks," said the 32-year-old Briton. "It's still a construction site here - no supermarkets, no shops - you're basically confined to your apartment." "We really don't know what we're paying for, so what we want to know is where this money is going, bearing in mind that we already pay electric and water separately. The only formal channels we have to communicate with officials in the development is what's indicated on DMCC's website."

But Bryan Wilson, the executive director for property management at DMCC, said the company "had been completely transparent with all our fees." Some developers have launched programmes recently to improve customers service. Deyaar, which expects to deliver 3.6 million square feet of finished units in 2009, has introduced a newsletter for property owners and made its website more user friendly. Still, many residents appear unappeased.

Softening rents have persuaded growing numbers to relocate to higher-end communities with better reputations in residential management. Others are pursuing a collective-bargaining approach, such as the Jumeirah Beach Residence homeowners group. They and other grassroots groups have banded together to call for transparency from authorities and more say over community management decisions. Authorities have also sought to more thoroughly intervene in the ailing real-estate sector, most notably with the increasingly active role of Dubai Real Estate Regulatory Agency, or Rera. But falling property values and expected population declines, by as much as 17 per cent in Dubai this year, according to a March EFG-Hermes report, may require bolder intervention.

"My feeling is, looking forward, the Government is going to have to step in and take a bigger regulatory role in this market, because it has become uneven between different parts of Dubai," said Hafed al Ghwell, the director of external affairs at the Dubai School of Government. This may mean a painful but necessary break with Dubai's long-standing preference for managing communities from a hands-off, private-sector-led approach, he said, mainly because "the private sector doesn't run these things for any larger goals than making profit."

"If you're running your own company, you're not really worried so much about the public good," he said.