Nakheel mulls legal action against service fee defaulters

Nakheel, the Dubai-based master developer, is contemplating taking legal action against property owners who are not paying service charges, Emirates 24|7 can reveal.
 
“We are following Rera’s guidelines and regulations through the owners' association registration process – this is a process that embraces legal mechanisms to protect the interests of all property owners by dealing with defaulters,” a company spokesman said.
 
Although the company refused to divulge the total amount of unpaid service charges, industry sources said the figure is quite high.
 
Asked if service charges had been reduced for all communities in 2011, the company spokesman said: “Yes, the master community service charges and building service charges have been reduced across all Nakheel master communities.”
 
He attributed the achievement to efficiency initiatives, negotiation and renegotiation of service provider contracts and through a thorough review of all contributing cost factors.
 
The master developer did not provide percentage-wise decline across its communities. It charges 2 per cent per month as penalty for non-payment of service charges.
 
DM, who owns two apartments in Discovery Gardens, admits he owes the developer over Dh35,000 in service charges, but is not willing to pay, citing poor service.
 
“We haven’t received any communication from them on reduction of our service charges. I believe it is very high, considering the service provided within the community.”
 
Nakheel confirmed it was still managing all of its master communities and its jointly owned property Interim Owners' Associations (IOAs).
 
In February, the master developer told this website that it was processing registration requirements of about 290 IOAs and had disclosed that the response for election of IOA board members was poor.
 
In May 2010, the Dubai Land Department issued four separate directions for the implementation of Strata Law, which set October 13 as deadline for registration of IOAs.
 
Rera CEO Marwan Bin Ghalita said recently that a total of 150 homeowners' associations have been registered with the agency. It has already made it mandatory for all developers/ master developers to seek the agency’s approval before finalising service charges.
 
Last month, this website reported that Nakheel’s operational plan was being fully funded by the Dubai government that allows it to sell assets going forward.

“The operational plan in the later years does have ongoing sale of assets (land and built form) in the normal course of business. And the operational plan is fully funded by the Government of Dubai,” a Nakheel spokesman said.

Ali Rashid Lootah, Chairman of Nakheel, has said the company plans to complete nine projects, with an investment of Dh8 billion, in the near term. Among the projects proposed to complete in the near-term are Al Furjan Jumeirah Village, Jumeirah Park, Jumeirah Heights, Jumeirah Island, Vento and Badra.

Follow Emirates 24|7 on Google News.