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Thursday, July 29, 2021

Dubai’s Marina 101: Some property buyers in stalled skyscraper project will lose all their millions

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Marina 101
Just about another 3% would do it – but reaching the completion mark is still proving difficult for Marina 101, the mixed-use skyscraper that was launched in 2005.
Image Credit: Gulf News

Dubai: Even as Dubai works out solutions for extensively delayed/shelved projects launched by private developers in the past, one group of property investors in these projects will have no reason to cheer. These are the unfortunate ones not to have their unit sales recorded in Dubai Land Department’s ‘Oqood’ offplan sales register for various reasons.

Nowhere is this more apparent than at the Dh1 billion Marina 101 skyscraper development in Dubai Marina. According to feedback from investors, there are “more than 50 buyers” who don’t have the Oqood certificates and will “lose everything” when a settlement is reached.

“It is believed that among them is an investor who bought a Dh30 million penthouse, and which he failed to get registered.”

The Marina 101 is the most visible among the projects that were launched with such fanfare and then got stuck at some point in its development. But with the Marina 101, it is even more striking because the project has gone past the 97 per cent on the project side, as per official records. It was at that point that developer, Sheffield Real Estate, ran out of funds. Since then, the banks that have unpaid loans with the developer have tried to come up with various solutions to get the project complete – but none worked. The project was launched in the middle of the last decade and was initially headed for a completion in 2008-09.

Not losing hope

Dubai recently set up a high-powered committee to clear all such delayed projects and ensure that investors’ rights are protected. This is why some buyers in Marina 101 – and other projects – remain hopeful that any deal to revive it will take care of those not holding Oqood certificates.

“Our unit was not registered under Oqood for no fault of ours,” said an investor talking to Gulf News. “It was my parents who bought the apartment and they had made all the payment commitments. But each time we wanted to get it registered, the Sheffield representatives kept delaying it.

“When the project got stuck in 2019, we tried to contact Sheffield representatives and legal sources. There was no one to connect with at Sheffield. And without an Oqood certificate, we have been told that we have no rights on the apartment that we bought and paid for.

“We remain hopeful that the authorities will work out some special arrangements to help investors like us when the project is revived.”

What is Oqood?

This is the Dubai Land Department’s centralised system to manage offplan properties and streamline property sales in this category. All such offplan sales need to be entered into the official records.

What does the Law say?

“Most contracts only need to contain two elements to be legally valid,” said Ibrahim Hanifeh, Senior Associate – Litigation at Abdulla Alawadi & Associates. “Parties must be in agreement after an offer has been made by one party and accepted by the other. Something of value must be exchanged such as cash, services, or goods or a promise to exchange such an item for something else of value. “However, the UAE regulation requires a formal shape for some transactions such as a property’s sale and purchase agreement (SPA).

“Although, the regulators doesn’t require a standard format for SPA to be entered between the parties, in Dubai, it is mandatory for the initial SPA to be registered in Dubai Land Department. Otherwise, the SPA shall be considered null and void. The law in UAE requires that all transactions related to a property to be registered with the concerned department.”

As clear as it gets

The law’s requirements on registration of property deals is clear enough. Lawyers say that even if there are valid reasons for property buyers not being able to register their units – such as developers’ apathy – it is unlikely that the judicial process will assign any rights to them. The only option then would be some special dispensation from the authorities on a case-by-case basis.

As for such investors, it will indeed be a double blow – for one, they have waited all these years hoping to see either the project completed or a return of their monies. Now, when there is a good chance that these projects will be revived, they will find they have no rights on their multi-million dirham units.

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