Homeowners protest over surprise charges

Flat owners in Dubai's Discovery Gardens are hit with unexpected management fees.

Apartment owners in Discovery Gardens in Dubai have been hit with unexpected fees after the mortgage company contracted out the management of the buildings.

DUBAI // Dozens of homeowners in Discovery Gardens have been hit with unexpected fees after their mortgage company contracted out management of their buildings. Several dozen signed a letter last month addressed to Tamweel, which financed many buyers, protesting about what they claimed were excessive fees and opaque business practices. They said they had chosen Tamweel on the premise that it had bought buildings in Discovery Gardens with the intention of continuing to manage them, while selling individual units. However, months after handing over downpayments, many said they were surprised to learn that the buildings had instead been sold to third-party individuals and companies.

Notified of the decision in letters sent by Tamweel late last year, they were also instructed to pay the new building owners tens of thousands of dirhams in charges. While some of these fees were legitimate, they also included charges that the property regulator, Rera, has since ruled should be paid by building owners, not by the purchasers of flats. Rera told homeowners in e-mails that they did not have to pay many of the fees.

The flat owners say that when they approached Tamweel with Rera's ruling, it responded that the fees were out of its hands, telling them to take it up with the new building owners. Michael Aldendorff said he was asked in a letter from Tamweel late last year to pay more than Dh51,500 (US$14,000) in charges to a company he had never heard of. His bill included a building registration fee, and an affection fee, for the documents that define the area of the flat. Rera has since said that both of these charges should be met by building owners, not flat owners.

"Since Tamweel took out full-page ads in newspapers in 2007 about Discovery Gardens flats, there was never any mention of these third-party building owners," he said. "We're paying exorbitant charges that even Rera says we don't have to pay, there's a lack of clarity, and nobody's taking responsibility. "At the end of the day, my mortgage is with Tamweel, and they're all I've ever dealt with on this issue - so, in my opinion, they're the responsible party."

However, in an e-mail statement, Tamweel disputed the accusations, saying that its "[c]ustomers were aware that Tamweel sold the property in its capacity as the agent acting on behalf of the investor/building owners". The company also said the fees it listed in its letters were "guided by the fee structure communicated by the building owners and Nakheel. None of the fees have been retained by Tamweel."

The reason Tamweel had instructed homeowners to pay third-party building owners, the statement added, "was to facilitate the handover process [of the flats]". But there seemed to be confusion between Tamweel and Nakheel as to where queries about fees should be directed. If customers had any issues regarding fees, the Tamweel statement said, "they should take [up] the matter directly with the building owners and Nakheel who have actually received the fees."

Yet in response to similar questions, Nakheel said in an e-mail statement that such concerns should be directed elsewhere: "Any queries of matters between building owners and their purchasers need to be addressed directly to the parties involved." Krishna Vura, 35, an Indian national, made a Dh60,000 downpayment for a one-bedroom flat in June 2007. In a letter late last year, Tamweel instructed him to send it a cheque for Dh31,101.72; it was for fees, to be made payable to an unfamiliar third-party building owner.

"I received a message on my mobile from the new building owner saying, 'Congratulations, your flat is ready,'" he said. "He said I had to pay a certain amount in order to get the keys, and all I was thinking was, 'Who are you? I literally have no connection with you.'" Mr Vura approached Tamweel and Nakheel about the issue on several occasions, but received mixed responses from each. He then decided to pay the fees because he feared he would not receive the keys to his flat.

"I feel like I've fallen into a trap, like there's no light at the end of the tunnel," he said. He said he paid around Dh8,900 a month in fees and mortgage instalments. Bhaskar Gollapudi, 43, from India, complained that his building owner asked him to pay more than Dh44,000 in fees last year. The charges included a building registration fee of Dh5,000, and an affection plan fee of Dh2,000. "We were never told about these third-party building owners," said Mr Gollapudi. "All the documents we've signed with Tamweel are rubbish now.

"If you have a complaint, Tamweel just tells you to go and talk to the building owners." [e-mail]