The property, plots of land and funds registered to developer Schon Properties will be seized after hundreds of investors in the Dubai Lagoon community have demanded their money back.
The Dubai Land Department will be in charge of the property and funds deposited in an escrow account until the Dubai Public Prosecution and Dubai Courts completes legal procedures to permit recovery by investors.
“The step is aimed at protecting the rights of investors in light of Schon Properties’ actions of exploiting investors by refraining from depositing their money in an escrow (guarantee) account,” according to a statement released by the Dubai Media Office on Thursday.
The planned Dubai Lagoon community launched by Schon Properties in the Dubai Investment Park area has been delayed by more than a decade.
Handover deadlines were never met for the Dh3 billion residential community conceptualised around a lake.
Hundreds of investors have asked for funds to be returned, filed court cases, petitioned the land department, the Real Estate Regulatory Agency, a government authority that regulates the property sector.
Following repeated complaints, authorities announced in 2014 that the project would be monitored and broken up into phases.
Authorities also warned the developer that legal action would be taken if the stipulations were not met.
Launched in 2005, the project attracted more than 2,000 investors from across the UAE, UK and Europe.
Brochures and online visuals promised a community of eight-storey buildings constructed around a lake with swimming pools, a mosque, shopping centre and a school.
Initially scheduled for completion in 2008, delays were first blamed on the economic downturn and delayed utility clearances.
There is no information available about the amount of money deposited in Schon’s escrow accounts.
As part of measures introduced by the government to protect investors and improve transparency, frameworks were introduced more than five years ago for the land department to regulate the escrow accounts of developers.
The Dubai Land Department called on all investors to deposit money in escrow accounts and transfer payments to developers based on the percentage of completion of projects.
“This is the only way investors can preserve their money and ensure their rights are protected,” the land department said.
“Buyers are not advised to make payments to developers outside escrow accounts.”
This is in reference to off-plan projects where a developer must open an escrow account into which the deposits of potential homeowners should be placed and payments should be made in instalments, according to the progress of construction.
There was no response to emails sent by The National to the developer.