Nakheel defends service charges, as owners claim fees have increased

The company has promised to cut 2012 service fees by 15 to 20 per cent without compromising service.

Fifty per cent of service fees remain outstanding at the Shoreline residences on the Palm Jumeirah, even though Nakheel has blocked owners in arrears from accessing the beach, pool and gym.

DUBAI // Nakheel has kept its properties in good condition despite massive debts owed by owners in maintenance fees and complaints from residents about wear and tear, the developer's acting chief executive said yesterday.

The company will also cut 2012 service fees by 15 to 20 per cent without compromising service, said Sanjay Manchanda, by taking advantage of its bargaining power as a large company and the falling costs of contractors.

Mr Manchanda's defence of Nakheel's property management came amid complaints in various communities about maintenance problems - from leaks indoors to unkempt landscaping.

Word about such incidents had spread, but they did not represent the full story, Mr Manchanda said. He also denied accusations by owners that Nakheel had overcharged service fees to make a profit.

"I know there is a lot of scepticism in the owners' mind that Nakheel is doing everything just as they wish. But no, we are following a process of tendering," he said. "We are making every effort to provide quality service at a cost which we believe is competitive.

"There's been no cutback on services. On the contrary, we have funded those services.

"I could have stopped and not paid for them. But that is not what we want to do. Can you imagine if the trash is not picked up in communities like Palm Jumeirah? That is a question of Dubai. We cannot let this happen, and we will not let this happen."

He urged owners to contribute by paying the service fees charged each year for the upkeep of their communities - of which 60 to 75 per cent remains outstanding across Nakheel properties, he said.

Fifty per cent of fees remain outstanding at the Shoreline residences on the Palm Jumeirah even though Nakheel have blocked owners in arrears from accessing the beach, pool and gym since last December.

Owners, particularly on the Palm Jumeirah, have fought to negotiate their own contracts with service providers and set budgets themselves, believing they can cost cuts better.

They hope to do so through owners associations, which are intended by law to eventually take control from developers of managing their properties. But the bodies remain in a legal grey area in which they cannot sign their own contracts or open bank accounts.

Mr Manchanda said Nakheel would not give up control of property management as long as service fees remained unpaid, because the company needed to recoup money already paid to contractors.

"I'm not saying I'm going to cling to this business. If you can replicate these services, ahlan wa sahlan. But first pay my money back."

He rejected the claim that the funds collected for one community had been spent elsewhere. "I cannot fabricate these amounts and numbers. These are all backed by signed contracts."

Nakheel plans to continue reducing fees and has already done so in recent years, the Nakheel chairman Ali Lootah said in an interview last week, though a few invoices viewed by The National seemed to indicate otherwise.

A 25 per cent drop in the 2011 service fees for Jumeirah Islands, which Mr Lootah had pointed to, came one week after a notice was issued indicating a 50 per cent increase. In the end, the total charge for 2011 remained around the same level as in 2010.

A chart that Rera published this month in the Arabic newspaper Al Bayan said Shoreline service fees had stayed the same from 2010 to 2011. But an invoice for one apartment showed a 20 per cent increase.

Mr Manchanda said he could not comment on specific figures.

"It depends which dated invoices, what charges, and stuff like that," he said. "I don't have the exact details, but I can only assure you this, that the billed amounts to all these communities have dropped."