Arabian Ranches' IOA mulls 'foreclosure'

Service fee dodgers in Arabian Ranches may either be named or shamed or be served with a legal notice that may result in foreclosure of their properties.

These are some of the options being weighed by the interim owners association (IOA) at upscale community in order to get defaulters pay their dues.

In a communication to the owners, and seen by Emirates 24|7, the IOA stated that one of the most significant issues currently facing the community was that of homeowners failing or refusing to pay their annual service fees.

“We are working closely with Emaar Community Management (ECM) to significantly increase collection efforts and to ensure that defaulting homeowners are subjected to severe penalties.”

The punitive actions being contemplated include restricting defaulting homeowners and their tenants from accessing/utilizing the facilities such as tennis courts and swimming pools, restriction of modification and transfer of their properties, naming and shaming the defaulters, providing a service to current and future tenants to check on the service fee status of any villa prior to renting it, and legal notice that ultimately may result in foreclosure of the defaulters properties to cover outstanding costs.

The current cumulative outstanding service fees (since 2008) at Arabian Ranches stand at around 20 per cent of the total 2011 budget. Around 10 to 13 per cent of homeowners failed to pay their service fees in 2010.

A British expat, who owns a villa in Mirador, told this website: “It’s annoying to see my neighbour not paying and still using all the facilities that we pay for. I appreciate the efforts of our IOA and the suggestion to penalize these defaulters.”

He believes that most of the people who have rented their units are the one who are not paying the fees.

“They have to realize that it is the responsibility of all to pay for the upkeep of our community… this only results in them getting premium rent for their units.”

In 2011, owners paid a service charge of Dh1.92 per square feet of plot area. Invoices have not been generated for 2012.

The IOA further pointed out that Emaar Properties, the developer of the community, has been funding the community to ensure uninterrupted services in order to make up for the uncollected service fees shortfall.

“Interest expenses arising from such lending are however resulting in increased costs to the community as a whole. For those of you who have defaulted on paying fees, we urge you to do so at the earliest. We are working towards improving efficiencies and costs and to improve communication on accountability and transparency of accounts and expenses,” the association said.

Legal remedies available

Hadef & Partners, a Dubai-based legal firm, says there were legal remedies to recover legitimately outstanding amounts for service charges.

Remedies might include claims through the courts against the owner based on a personal right; and statutory liens over the owner's property pursuant to Article 25 of the Joint Owned Property Law.

Article 25(2) grants the Association Manager the right to provide the defaulting owner with notice through the Notary Public. If the default is not remedied within three months then the matter may be taken directly to enforcement through the Execution Court.

However, it is important to note that these must legitimately assessed, properly levied and outstanding amounts, which might be difficult to prove for some developments.”

“If any owner is faced with either paying up, fighting lengthy court battles or losing their property, then this can be very motivating for payment,” the law firm said.

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