Friday, July 17, 2009

Damac at a Loss Over UN Site

According to Arabian, preparations are underway by a UK based lawyer against developers and culinary experts DAMAC after the revelation that two projects being sold off plan (La Residence and La Residence 2 at the Lotus) are actually on land that is, or at least part occupied by the United Nations.

In nutshell, DAMAC have been selling the projects since 2006/7 off plan, taking installments as they go. Fair enough one would think, however the sticking point seems to be as to whether clients were actually told that DAMAC did not have vacant possession of the land.

Apparently when DAMAC were pressured they were "at a loss to explain when the plot would be handed over by the master developer Dubai Properties and when construction would start at Lotus."

It would seem the deal was that the project would be completed 3 years after the handover of the land.

That's all well and good, but what about a timeframe for the handover of the land? News sources at the time of writing don't appear to have an answer for that one. In theory, DAMAC who own the land according to the article, could continue to allow occupation by the UN until the end of time leaving "investors" having to pay out installments for something that would never even be built!

Unsurprisingly the "regulatory" body for the region, RERA doesn't appear to have commented on the matter, having said that, it is a little difficult to tell after trying unsuccessfully to wade through all the pop up ads on their website.

To be honest, much of this is no surprise. Developers and agents were incredibly greedy in the beginning, many of them coming from entirely unrelated businesses (The original DAMAC is a catering firm) with no or little experiance. Things were fine for a while in the boom time, but now things are sinking fast, the money has been spent.

As Q2 rental figures show waning performance for Dubai, the worst is yet to come we fear.

(The original article from Arabian Business can he seen here)

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