Developers step up repossession of defaulters' units

Union Properties (UP) has joined a growing list of Dubai developers that have obtained cancellation orders through the Land Department and are seeking to repossess units of defaulters, Emirates Business can reveal.

Ayman A Okasha, Chief Property Officer, UP, told this paper that the company has started executing the orders to repossess units of defaulting investors in its MotorCity project. "We had sent out notices to investors at February-end, mostly for the MotorCity project, asking them to honour their commitments and make the final payment for handover of their units. A default would lead to termination of their contract as per the applicable laws," he added

Although Okasha did not reveal the number of notices issued to defaulters in MotorCity, industry sources said these were in the hundreds. UP joins a number of other local and international real estate developers, including Emaar Properties, Omniyat Properties, Bonyan International, Al Mazaya Real Estate and Bando Corporation, that have reportedly issued notices to defaulting clients to pay up or face repossessions.

"Most of the investors have reached an amicable settlement with us since the completion of the project's construction. We have obtained cancellation orders for the rest and are moving to repossess the units," said Okasha.

Real estate defaulters stand to lose up to 40 per cent of the value of their units, including any down payments, in the event of a repossession. Generally, UP expects customers to make an initial down payment of between 40 and 50 per cent while the final payment is due on handover, Okasha said.

"We are still optimistic and open to talks with these [defaulting] investors to find an amicable solution by offering them an instalment option, which is a three-month interest-free option to pay the balance."

In case of repossession, Okasha said the company intends to add these units to its leasing portfolio and has no plans to sell them at lower prices in the market.

UP has witnessed good sales of units in MotorCity since January, he said without revealing numbers.

Okasha reiterated UP is looking to sell assets in the "non-freehold" area and is in talks with a number of parties in this regard.