Executive Towers Update - 29 March 2010

Time for another update from the wasteland also known as Tower B.

1. My letter to Salwan's CEO. So far this is the only reply -

Dear Mr. Robert,

Thank you for contacting Salwan Property Management.

As per your request, your e-mail has been forwarded to Mr. Saeed Bushalat for his review and reply.

Should you require any further assistance; please do not hesitate to contact us.

With Best Regards,[/I]

2. The false fire alarms are now a regular feature at Tower B. Between 5 - 10 times a day and night.

3. We had a friend to visit a few days ago -first time that we have dared let anyone else see the place. Their first observation was that - "it does not look like a new building - it is so run down." And she was right. The access corridors are dusty, damaged, have no ceiling. Door frames are slowly being stained and repaired etc etc.

4. Pictures of the pool and gym are at the bottom of this link :
http://picasaweb.google.co.uk/rascottdotcom/ExecutiveTowersTowerBHandover#

The pool may be no more than a month away but can it open before the rest of the gym and changing rooms which are months away.

5. Our snagging is more or less finished. But it has been like pulling teeth. And contacting Salwan or Idama to get anything done is pointless. The only way to get work done is to have the phone number of one of the Al Habtoor foremen.

6. Has anyone else noticed how dusty the apartments are? Although ours is cleaned each week after only a couple of days there is a fine dust over everything. I assume this comes through the cooling system.

7. This morning the only working elevator around 10.30am was the freight elevator by 01/02. And that was not stopping at the 34th floor. It took 30 minutes to get to the Ground floor. And an elevator only arrived (there were at least 7 or us by then) because I called the Al Habtoor contractor....30 minutes wasted. No point in yelling at Salwan - as far as I can tell they could not manage their way out of a paper bag.

8. And a question. Is anyone else disturbed by loud banging sounds - almost sounding like something is banging into the outside of the building - seems to affect the East side of the building the worst ? It is loud enough to wake anyone sleeping. I have no idea what the sound is.

9. A request. Could people please use caution in the car park - and maybe even park in designated parking spaces.

I was away last week. And had been careful to park in a designated space at the side - away from the main traffic.

I came back to find my bonnet and grill have been badly damaged.

To the offender's credit he or she did call the police - and a green report was left under my windscreen. But I now have no car for 2 weeks.

But after giving him or her some credit - to do that much damage he/she must have been reversing at speed. Pathetic.

That's this week's update. There is news today that Dubai Holdings is looking to restructure some US$20 billion of debt. No great surprise. I guess they must have overspent at Dubai Holdings palatial HQ building. Rarely have I seen so many people wandering around doing so little.

Executive Towers Update - 4 March 2010

I should be happy today. Idama were going to come this morning and complete the snagging work. And Du were going to instal tv/internet/landline.

But this is Executive Towers; and nothing goes as planned.

Idama did not appear. Despite so many promises yesterday.

And Du did come; and were very pleasant - and very apologetic.

There was nothing that they could do because the contractor has failed to instal a power socket in the equipment box above the apartment entrance. I don't know whether i am unlucky or whether this is a fault with the whole building.

So the contractor has to instal the power socket; then I have to re-schedule the Du installation.

I am so effing cross.....

Executive Towers Update - 3 March 2010

There has been no progress by the contractors since the 14 February update.

But we did get an entertaining visit from one of the Idama managers today; it was a bizarre visit.

Yes they can move the main bathroom toilet roll holder - but we have to pay for it. It is in the wrong place; it is not our fault. It is the far side of the bidet; rather than between the bidet and the toilet. All the apartments are the same said our Idama man. It was fitted this way because of the drainage.

What is this Executive Towers disease where people need to lie about everything.

The apartments are not all fitted like this. Let me show you. 3402 and 3601 (both unoccupied) have the toilet roll holder in the correct place.

There is no toilet roll holder in the spare bedroom. Drainage he said. So why does 3402 have one?

Does anyone have a bathroom plug? I have not seen them in any apartment.

The chipped and stained bathtub seemed to amuse him rather be of concern. I doubt anything will be done.

The second bedroom still has almost more paint on the floor than the ceiling; and the tiling and plaster work still needs to be redone around where the build in wardrobes were stripped out and changed.

One piece of good news. DU has completed their network installation and just maybe we will have internet and tv access tomorrow.

The car park is getting busier - which means it is harder to find a car parking space when so many are being used for building material storage.

Road access all but got washed away by the rain.

Executive Towers - Online Comments - 23 February

This is from a web forum: written by another owner or tenant:

"Has anybody noticed how bad the smell from the air ducts (the metal boxes in the walls - in the lounge/bedrooms etc) is !!!

It is horrible.

At first they blamed the sewage in the bathrooms, but later we found out the truth (from workers/engineers)... read on.

I was told by the engineers that the ET buildings were ready & sitting for the last 2 years & during this time 'RATS' had infested the buildings (and had been happily eating away the plastic/cables/wiring/everything etc) !!!

Al Habtoor have used rat poision & killed a majority of them - that's what the aweful smell is !!! There are dead rats all over the building & air ducts etc. (all the Towers).

This is REALLY BAD & unhealthy specially for children and we wonder for how long it will continue...?!? There is nothing they can do about the smell.

To quote DP "The ET apartments come equipped with modern amenities, high-tech facilities and internationally designed interior spaces that embody superb architectural innovation and breathtaking views of the winding Creek." INDEED !!!"
 
Executive Towers Update - 14 February 2010

We have now moved into our building site apartment. And it is time for an update:

I have painted walls in the living room and main bedroom and put a bit of colour in the place. And made far less mess in the process than the contractors.

Discoveries: The bathrooms were all designed by very small people. A dwarf's bathroom. Which makes little sense in a 1,550 square foot apartment. The bath is so small that it does comply with Dubai's rules on conservative behaviour. Because there is no way in the world that you could get two people into the bath or shower.

There is a woeful lack of storage space and the built in cupboard units were obviously designed by a man who has only one suit and one pair of shoes....and must have been designed by a man - a woman would have known better.

The kitchen has an opening to the lounge/dining room but still has a kitchen door. Why ? Better to have no door and create some space in the small kitchen.

The living room is cold.

The apartment gets a lot of dust and dirt. Not healthy. Presumably through the ventilation from other rooms.

If the contractor says that he will be there for 2pm today - it could mean any time or never. Three times I was told after two pm on different days last week. Three days I sat in waiting. No one ever appeared.

The built in wardrobes in the spare bedroom have been finished (again) - but they have taken tiles off the skirting board and plaster off the surrounding walls.....more work for the working men to do - if anyone remembers old Flanders and Swann songs.

One afternoon last week this guy walks in with a jacket that says Dubai Security - just walks into the apartment - who are you I asked - I am security - he is clearly checking on my friendly labouring team - so I had a go at him - telling him he had no right to simply walk in to a private apartment...and that next time I expect the courtesy of a front door bell and he can wait until I invite him in.

Internet/TV/Telephone - were due to be availble from Du by 28 February. As of last week that is now 12 April 2010. But their web site still says on schedule. Jokers! Someone has to explain to me why a building that is two years late has not already been wired by Du.

These were apartments that were supposed to "come equipped with modern amenities, high-tech facilities" according to the Dubai (take your money and run) Properties.

There is only one elevator operating in the building. Which is a real problem for removal and delivery people. But it is leading to some fun conversations with other owners and tenants in the elevator. No one has a good word to say about the building or DP.

The contractors proved to be highly entrepreneurial last week. They seem to have a period of overtime that starts at 5pm precisely.

Executive Towers Update - 23 January 2010

Dubai Properties - who I remain convinced are the least customer friendly organisation that I have ever dealt with - insisted that the apartment that we have bought in Executive Towers had to be handed over and paid for in full by 6 January 2010 - or we would be found in default - and potentially liable to lose the 70% already  paid on the apartment.

Building Dreams is the Dubai Properties tag-line. Delivering Nightmares is the reality.

Unusually they insist on payment before they identify any snagging work that needs to be done. So here we are - we have now owned this apartment for 16 days - we are paying DEWA and cooling fees. The apartment is not ready to be lived in. The entire Executive Towers complex is months, maybe years from being complete.

The snagging list was prepared on 6 January. As of yesterday no work had been done. These are a just a few of the pictures:

Executive Towers - The Reality

The Dubai Properties Development named Executive Towers at Business Bay was originally due for completion in Q1 2008.

At the end of that quarter a press release was put out by Dubai Properties on 27 March 2008. It is, in hindsight, either shameful, embarrassing or simply hilarious. Yet no one is held accountable. No notice was given to purchasers concerning the delay.

"Dubai: 27 March, 2008 - Dubai Properties, leading master real estate developer, today announced the AED 3 billion Executive Towers, which are markedly visible from Sheikh Zayed Road and Al Khail Road, is nearing completion, and the anticipated Handover date will be during the fourth quarter of 2008.

Work is proceeding simultaneously on all 11 buildings of the Executive Towers, which include nine residential units, the Aspect Tower, and the Business Bay Hotel. The development's outdoor component, the Bay Avenue, is also on its way to deliver 175,000 square feet of retail space as well as water-front terraces.

With all the units of the Executive Towers sold out, the handover of all towers will commence in the fourth quarter 2008....

Al Zarooni said: "With 5,400 on-site workers, we are delighted to inform that our ambitions for the Executive Towers will soon achieve fruition. The towers and the lifestyle they represent are geared towards people who celebrate success and an intelligent way of life, and we are confident the development will set new benchmarks in the industry."

Termination and refund clauses for failure to deliver the project within a year of the original completion date were contained in the property sale and purchase agreements but were worthless. As a buyer you could have tried to fight Dubai Properties in a local court but you would have needed great patience, a good lawyer and to afford significant legal fees.

So the only option has been to sit and wait for completion and handover of the property. In the meantime I (and I am sure many others) have incurred the costs of two additional years of property rental.

On 21 June 2009 Samer Zabian, the Director of Customer Service (never has a department been so badly named) wrote to the owners to announce: " We are delighted to announce that the completion date for the Executive Towers project is now confirmed as 20 July 2009."

More fiction. This was nothing more than an attempt to bring in some cash from the final payments. It was clear that a summer 2009 handover was impossible.

Another email (this time) on 15 November said that Tower B would be handed over from 30 November. And the threats started – “failure to book your handover appointment by 26th November 2009 may result in your account being marked delinquent.”

No matter that the building was already almost 2 years late.

A December handover appointment was then replaced by a January appointment; although I only knew that when I rang the customer service department to confirm the December appointment and was told there was a further delay.

Now lets look at the handover process. How should this work; the purchaser examines the property; prepares the snagging list (defects to be addressed before handover) and ensures the snagging list is resolved before the final payment is made and the property is handed over by the developer.

Not so with Dubai Properties. They take your money first thank you. Then you can go to the property and prepare you snagging list. You are now paying utilities and management fees for a property that is not yet fit to inhabit.

Incidentally Dubai Properties did not put management of Executive Towers out to tender. They just appointed their subsidiary management firm - Salwan LLC. A company that has no history of property management and that appears able to charge whatever management fee it wishes. This appears to be around AED14.50psf - for what??? Employing a security gurad in the car park to take my name every time i go to see the apartment that I own.

Salwan did retain some UK consultants to advise on the handover process. The consultants said completion of the pool, gym, public areas is further delayed. The pool may be ready by the end of March. Lanscaping will not start for six months.

Some of the consultants have been retained by Salwan to manage the handover. They are openly and honestly embarrassed to be handing over the project in this condition.

Simply put Executive Towers is not ready to be handed over. And it should not have been handed over in this condition.

The pool may open in by March.

The gym may open by June.

The mall area may open in six months. I suspect this is closer to the year end.

But remember these are Dubai Property dates so are subject to lengthy delay.

There is no landscaping. The towers currently sit on a mud and sand patch with no proper road access.

At present there is no safe access to the building. Access to my tower, Tower B, is available through the car park only. Only one of the three elevator banks is working. The car park is dirty, dusty, poorly lit, full of building materials and is base camp for the many labourers still on site. I am sure they are delightful people but I do not think my wife should have to walk through them if she comes home alone to the building. I do not regard it as either safe or secure.

 My car parking spot is B13. That and the surrounding spaces are currently being used as storage space for building materials.

Then the big moment - you get to your apartment and see it for the first time.

The view out over the Burj Khalifa. Lovely.

Inside - I have never been more disappointed. The plasterwork, grouting and paintwork all looks like it was completed by five year olds using playdoh.

The flooring is stone tiles; it looks like the tiles that you might use on a garden path.

There is mould/fungus on the wall of one of the bedrooms. The built in wardrobe there is showing signs of rotting and warping.

There are panels missing. There are chips, marks, damage throughout. Door fames are damaged. Doors are chipped. Switches and sockets are missing. Cracks in the plaster work have been painted over. Tiling is uneven. Doors do not fit properly etc.

The quality of the materials that have been used is very poor. The doors and door frames are especially bad. This looks like cost cutting of the worst kind.

The saddest part is that there appears to be absolutely no quality control and no sense of a duty of care. Isn't this what customer service is supposed to do. There can have been no check of my apartment to ensure that basic fixes had been done; that obvious damage had been repaired. None of this is rocket science. The contractor should be signing off on this apartment before I am expected to review it.

The schedule of finishes in the sale and purchase agreement said that "All finishes, fixtures, construction and installation will be to relevant international and local standards." That must have been in the fiction section.

The Dubai Properties web site eulogises on Executive Towers : "The Executive Towers comprise 12 towers: ten residential towers, one commercial tower known as Aspect Tower; and one hotel called the Business Bay Hotel. The apartments come equipped with modern amenities, high-tech facilities and internationally designed interior spaces that embody superb architectural innovation and breathtaking views of the winding Creek."

It makes me weep to see the reality.

Khalid Al Malik, Group CEO of Dubai Properties Group, said: "The handover of The Executive Towers confirms Dubai Properties’ commitment to the continued development of Dubai’s landscape by delivering projects that surpass our customers’ expectations."

My expectations were pretty low already - and they could not even meet those !! Pathetic; shameful; incompetent.

It is now three weeks from the handover date. Firstly we were told it would take two eeks to complete the snagging work. Then we were told the work would start on 17 January. But now three weeks after the handover and final payment no work has been done.

I have now been promised that the work will be done in the next week. I have little confidence that this will be achieved or will be satisfactory. I

It is a shame. The people on site from Salwan and Idama do appear to care. But the contractor is not interested and Dubai Properties management have simply taken the money without any thought of their customers.

For those of us who have made a long term committment to working here, investing here and living here, this project is bitterly disappointing. The abiding and long term feeling is that the purchasers and investors have and continue to be treated incredibly poorly. As for the so called Director of Customer Service - he should be ashamed.

If I can find a way to post pictures of the defects to this forum i will do so.

Anyone who wants to compare notes or to confirm the accuracy of this commentary is welcome to contact me.

New strata law in Dubai

15 June 2010

The process has been set in motion to make developers relinquish their carte blanche over managing jointly owned property in Dubai. The recently announced guidelines to the Jointly Owned Property Law (Law No. 27 of 2007) have put the onus on developers to establish interim owner associations (OAs) and elect an interim board for completed property within the next six to nine months.

While the Real Estate Regulatory Agency (Rera) and the Land Department have established a regulatory framework to manage communal real estate, stakeholders are still seeking clarifications on numerous counts. "We think the biggest hurdle will be to get the developer to react to the new laws, i.e. to prepare all documentation, including surveys, leading to the registration of the project, then convening meetings to enable the creation of the OA and so on. Some developers seem entrenched in their manager role, which has now become redundant," says Graham Yeates, strata expert, Cluttons Middle East.

There are also concerns among some developers that entrusting building maintenance to an OA could be to the detriment of their brands.

"The main concern of brand dilution is for developers of hotels or serviced apartments under the jointly owned property regime," says Nima Khanpour, commercial director at Stratum, an OA management company.

"The biggest concern is from an investment perspective. There are not going to be many companies coming here to invest in the development of hotels if the law doesn't allow protection of their rights."

Given that developers have a short time frame to hand over management to an OA, Dubai's strata management companies should see a deluge of enquiries. "Some of the developers are unaware that they are required by law to have all this set up within a six-month period," says Gary Adamson, CEO, Stratum.

"If they don't, the owners can give a 30-day notice and in the event that the developer still doesn't register the interim OA, then the proprietors can take their own action to have it registered and bill the developer for it."

Interim OA boards

While interim OAs have a mandate to prepare members for the transition of power, they are merely consultation committees which will help homeowners identify their liabilities and obligations under the new regime. The directors of interim OAs will take over once the OA is registered and the first annual general assembly is convened. There has to be a minimum of five and a maximum of seven members on the interim board of directors, with three reserves. These owners have to be nominated first, then elected and no one can hold more than one position on the board - a point that restricts the clout of developers still holding substantial stock in a building.

"Once the OA is registered, a developer with unsold units will be rendered as just another owner within the complex," says Gary. "The building and all the services provided within the scope of the OA have to be maintained and every proprietor will be allocated a unit entitlement, which is the proportional liability to contribute towards all the expenses of the property.

"If they don't, they will be subject to the same law as everyone else and a penalty will be imposed. Developers will also need to pay service charges for units that have not been handed over."

Dispute resolution

Rera has also put a mechanism in place to recover service charges from owners who have fallen into arrears (‘delinquents'). Although a penalty of 12 per cent per annum will be initially levied, a public auction of the property would be the last resort.

"The feedback we are getting from developers is that the delinquency rate could be upwards of 50 per cent," says Gary. "There are also some developments with a delinquency rate as low as 7 per cent, where the owners are happy with the way the developers have been running them."

Graham says the guidelines remain silent on dispute resolution. "Ideally, there should be a specialist tribunal that would allow owners to air grievances without the need for protracted legal wranglings that sometimes occur."

There are provisions in the guidelines to restrict developers' ability to enter into supply agreements on behalf of the OAs. "Any contract that has been entered into by the developer can be cancelled at the OA's first annual general assembly," says Gary. "A disclosure clause must now be attached to all property sales and purchase agreements, which outlines how OAs cannot contract with companies unlicensed in Dubai. There will also be different licenses for facilities management companies and OA management firms providing services in jointly owned property."

"The new laws create an owners association as a distinct legal entity. Normally, this would override the pre-existing arrangements and the OA would be able to call tenders for components of their required facilities rather than accepting a blanket cover," says Graham.

Rera will, however, have the power to temporarily administer a development to deal with breach of community rules by owners. "Initially, the developer framed the community rules. Once the OA starts operating, it can change those rules, depending on the specific circumstances relating to that particular development and depending on where they sit in the scheme of things," says Graham.

For homeowners being handed over new properties, the regulations could give them recourse in the event that a developer provides "inadequate" facilities or common areas in a site plan. According to Article 11 of the directives, "The Department may refuse to register a Jointly Owned Property Declaration if (in its opinion) the Developer has withheld areas, services or facilities from the Site Plan or common areas site plan, or has included them within a Unit on the Site Plan, to the extent that the Common Areas are inadequate to cater for the reasonable needs of the Owners and Occupiers of the Unit or it is otherwise unreasonable to have done so."

Mixed-use buildings

Applying the Jointly Owned Property Law to mixed-use buildings is more challenging.

"There will be provisions within the scope of the legislation to determine the service charge levies not only on the basis of square foot, but also as per the usage of the service area," says Nima. "For instance, the seven different volumetric components within the Burj Khalifa can be partly charged on the basis of their use of common facilities, such as lifts, car parks and so on."

With the democratisation of facilities management, many in the industry believe that service charges are likely to decrease on average across all areas in Dubai.

Gary raises the possibility of how a building with a majority of owner-occupiers is likely to have higher service charges than one with long-term investors.

"All the investors are looking to get money out of tenants and if they can keep the cost of maintaining the building down, they will do that," he says. "But at some stage, the building will get to a point where it no longer generates sufficient income and they will have to put money back in to bring it back to a certain standard."

With owners assuming control of building maintenance, service charges may be adjusted upwards or downwards for a number of reasons. "Some of the service contracts were negotiated two years ago. These are fairly high compared to what is being negotiated today," says Nima, adding that variable costs - such as a concierge, marina maintenance and so on - lead to the variance in service fees in most buildings.

As a prerequisite to registration, every jointly owned building will need to present plans identifying common property and individual unit boundaries to the Land Department. The surveyor, in turn, will certify the accuracy of the subdivision and units of entitlement compared with the original design plans. (Units of entitlement determine which units must pay higher fees than others. In some cases, the higher the fees, the more clout the unit owner has in terms of contesting issues.)

For projects under construction, developers must submit drawings to the surveying section in the Land Department. "Land surveyor registration and methodology are fully catered to in the new regulations, but valuers are not. In most cases, the valuer is concerned more about market values and comparison with other properties in the area than mundane OA issues, unless there are well-publicised faults or litigation and so on, in a particular building," says Graham.

Meanwhile, the Land Department's surveying wing will set out rules and guide surveyors when calculating the dimension of units and common area entitlements.

In the meantime, common areas and each unit's floor area in existing buildings will be determined by architectural and engineering plans - something that has created confusion among those who expected all buildings to be subjected to the upcoming surveying regulations. Kent O'Brien, CEO and managing director of Strata Global says, "The current confusion in the market relates to what facilities are common areas and where the measurement of the unit title commences. The title boundaries under the new survey regulations are measured to the centre-line of the wall adjoining common property (including windows and balustrades) and also the centre-line of the wall between units."

Investor confidence

Until the time when the the Jointly Owned Property Law guidelines are outlined in an officially published document, they are unlikely to boost in investor confidence. "More important is the adjustment of price expectations, which, on average, still do not meet investment criteria. More specifically, for most investors, the current and projected yields simply do not justify local property investment," says Jesse Downs, director of research and advisory services, Landmark Advisory. The disclosure of OAs' books and records to prospective buyers may help restore investor confidence. "Prudent investors will be able to access the OA records. If full disclosure is available, intending purchasers will be able to make informed decisions. It is all part of the need for transparency, which can only benefit the property market," adds Graham.

Input from the experts

Jesse Downs
Landmark Advisory

"Recent clarification about the implementation of strata law shows some progress; however, we really need to have everything outlined in an officially published document that clarifies the implementation of the law. Generally, progress in the clarification of the owners association laws can help to solidify confidence. However, there are still a number of steps that will need to be taken to significantly boost confidence and improve liquidity."

Kent O'Brien
Strata Global

"Many developers have excised many areas, such as pools and gyms... out of the common areas of the development and added these into title property under the developers' ownership. This has led to disputes with owners who subsequently find they have to pay for membership to use these facilities. Rera has stepped in and will adjudicate on the plan before approving registration of the plan of subdivision."

Graham Yeates
Cluttons Middle East

"Australian experience has shown that a building sold as strata yields a much higher return than a single ownership one. This applies to both residential and commercial. The sum total of the separate strata lots will far exceed the value of a one-owner building. There has been comment about the difficulty of letting a commercial strata building where a tenant requires more than one lot, such as a floor and a half. There's no reason for strata title to impede such occupancy. Rental returns improve in such situations as space in those buildings is taken by this expanding tenant."

Survey regulations

Properties yet to be occupied as of April 13 will need to have their common areas and units determined in accordance with the upcoming survey regulations. Kent O'Brien of Strata Global believes the regulations will be released soon. "However, surveyors are currently lodging plans according to Land Department directives which follow the general directions relating to surveys," he says. "At present the department has been accepting theoretical site plans for existing projects that are complete and occupied based on as-built plans as a transitional arrangement. These will be subject to resurvey within a stipulated period by the owners' association and unit plans must be surveyed at the owners expense when resale occurs."