View of Dubai Marina from a flat in Marina Terrace tower. Notice on the door of an apartment for non-payment of service charges.
View of Dubai Marina from a flat in Marina Terrace tower. Notice on the door of an apartment for non-payment of service charges.

Debtors' price: dishonour



DUBAI // Residents of Marina Terrace know where their neighbours live. They know what units they occupy, they know who has pets, they know who goes to work at what time. And now they know exactly which ones owe thousands of dirhams' worth of maintenance fees.

Yesterday, 107 residents of the Dubai Marina building were named on public noticeboards, along with the amount of service charges left unpaid. The move, which association members called unprecedented, came as Dh1.8million (US$490,000) in dues sat uncollected. Officials also threatened to seize the apartments in question for resale if their occupants failed to cough up. Owners have two weeks to pay, the notices said. After that, anyone living in the property could be penalised.

The association said the defaulting owners, more than half of the 188 who bought flats in the building, have forced management to cut back severely on maintenance, which even switched off the building's facade lights to save electricity. The group has banned those who owe money from using their parking bays and the tennis courts, and said they could even be stopped from using other facilities like the gym and swimming pool.

The tactic could set a precedent for other developers and maintenance managers fed up with non-paying property owners. On Thursday, the association sent defaulting owners a letter reading: "Despite various reminders, many owners have not paid their fair share of these charges. This is putting tremendous pressure on the cash flow and building operations, which in turn delays regular maintenance and upkeep of your building. ... If after the stipulated period we have not received any payments, the owners' association will be forced to file a case with Dubai courts and [the Real Estate Regulatory Agency], which could lead to the court putting a lein on your apartment. This will allow the association to sell the apartment under the supervision of the courts to recover the financial discrepancies owed to the owners' association."

In addition, notices were posted on individual doors headed "Notice of non-payment of service charges" and warning the owner that he or she no longer was entitled to use certain facilities. Kevin Ryan, a spokesman for the association, yesterday said the move was necessary. "This is the first time a 'name and shame' list has been put up in Dubai and in fact, any building in the UAE," he said. "It is not a disrespectful thing or a judge, jury and executioner scenario, it is saying to people our books are in minus credit because of the amount of money owing."

"We have tried diplomacy and politeness to get them to pay but it has not worked," he added. "It is the owners who have paid who have pushed for this. Owners who are not paying cannot continue like this. It is unacceptable. We are trying to build bridges with owners and to create five-star living but if there is not enough money in the pot, how can we do it?" Mr Ryan said the shortfall had been compounded by a deficit of more than Dh1m owed by some of the 12 commercial units in the building.

As a result, he said, only one-third of regular maintenance procedures are being performed. The windows, for example, have not been cleaned since the cradle used to reach all 37 floors of the building broke seven months ago. And three months ago, the association switched off the facade lights in a bid to save Dh35,000 per month. Iranian-born Mehrtash Razavi, 68, a resident owner, disputed the Dh7,747 she was said to owe.

"I paid Dh5,000 recently," she said. "No one cleans the windows, there are bugs coming up from the rubbish chute and they are not doing the most basic maintenance. I seem to be paying all the time but do not see any results. A lot of the owners are not satisfied." Marina Terrace was the seventh building to spring up in the marina and Damac Properties' first iconic building in the area. Since responsibility for upkeep was handed over to the homeowners' association - a move that still isnt't finalised - Damac General Maintenance has been paid to look after the building.

When the contract was renewed in February, the association hashed out a deal to keep service charges at Dh14.54 per square foot. The fees cover the cost of air conditioning in communal areas, overall wear and tear, plus the upkeep of facilities such as the gym, sauna, swimming pool and tennis courts. When owners who had paid their service charges complained to the Real Estate Regulatory Agency (Rera) that others were missing payments and affecting repairs to the entire building, they learned there was sparse legislation to force them to pay up aside from a one per cent penalty fee, which did little to act as a deterrent.

In one case, the owner of a penthouse apartment had notched up defaulting payments of Dh124,453. Others owe amounts ranging from Dh166 to tens of thousands. The association lobbied the maintenance comapany for the names of defaulters and amounts owed. A spokesman for Damac Holding said these were supplied with Rera's approval. Niall McLoughlin, Damac's senior vice-president of corporate communications, said: "These are the actions of the homeowners' association, not DMG, which was requested to supply details of outstanding payments and owners and supplied them with approval from Rera."

Mr Ryan - who owes Dh1,000 himself - said many apartment owners lived abroad, which could be a reason for their failure to pay. "A lot of the problem is that owners do not live here," he said. "In this building alone, Dh3m is owed. Forty-five per cent of owners have paid, but the remainder will not or have not paid. We are not the only ones facing this problem. The reality is that a lot of developers are having the same problems. People just do not want to pay.

"I do not know why, because they have a clear mandate for any grievance or problem through customer relations management. There are processes and proper channels for any problems that people have." * The National

At a glance

Global events: Much of the UK’s economic woes were blamed on “increased global uncertainty”, which can be interpreted as the economic impact of the Ukraine war and the uncertainty over Donald Trump’s tariffs.

 

Growth forecasts: Cut for 2025 from 2 per cent to 1 per cent. The OBR watchdog also estimated inflation will average 3.2 per cent this year

 

Welfare: Universal credit health element cut by 50 per cent and frozen for new claimants, building on cuts to the disability and incapacity bill set out earlier this month

 

Spending cuts: Overall day-to day-spending across government cut by £6.1bn in 2029-30 

 

Tax evasion: Steps to crack down on tax evasion to raise “£6.5bn per year” for the public purse

 

Defence: New high-tech weaponry, upgrading HM Naval Base in Portsmouth

 

Housing: Housebuilding to reach its highest in 40 years, with planning reforms helping generate an extra £3.4bn for public finances

The five pillars of Islam

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4. Shahada

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Rating: 5/5

Skewed figures

In the village of Mevagissey in southwest England the housing stock has doubled in the last century while the number of residents is half the historic high. The village's Neighbourhood Development Plan states that 26% of homes are holiday retreats. Prices are high, averaging around £300,000, £50,000 more than the Cornish average of £250,000. The local average wage is £15,458. 

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Politics in the West
How has net migration to UK changed?

The figure was broadly flat immediately before the Covid-19 pandemic, standing at 216,000 in the year to June 2018 and 224,000 in the year to June 2019.

It then dropped to an estimated 111,000 in the year to June 2020 when restrictions introduced during the pandemic limited travel and movement.

The total rose to 254,000 in the year to June 2021, followed by steep jumps to 634,000 in the year to June 2022 and 906,000 in the year to June 2023.

The latest available figure of 728,000 for the 12 months to June 2024 suggests levels are starting to decrease.

Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”