Buying property in Dubai – beware of the hype

It was Dubai’s Cityscape Global property show last week. Global sounds impressive. But it is not really a global show. It is a show promoting the UAE’s developers and their property developments in the UAE.

So let me relate a personal experience from buying property in Dubai.

In January 2007 my wife ad I committed to buying an apartment at Executive Towers in Business Bay. Completion was scheduled for Q1 2008.

Completion eventually took place in January 2010; two years late requiring an additional two years of rent to be paid.

The condition of the apartment was appalling.

Some pictures taken in the apartment in January 2010:

Here is what I wrote at the time:

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

At the end of that quarter the following 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.

And remember Dubai Properties is a part of Dubai Holding, owned by the Dubai ruling family.

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. Landscaping 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. (It was in fact much later and has been closed for over a year since October 2016.)

The gym may open by June. It was much later.

The mall area may open in six months. I suspect this is closer to the year end. Much of the Bay Avenue Mall is still untenanted space.

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.

No one ever apologised.

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 weeks 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. 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 commitment 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.

But the story is not just about the building. It is about how it is managed.

Since handover Dubai Properties as the developer has appointed its own subsidiaries as property manager, facilities manager and to provide security.

None of these activities have been put out to tender yet their costs amount to over 60% of the total of the annual management fee.

Here are notes sent to the property manager in August 2015:

“Owners Association.

When the Tower B “Interim Owners’ Association Board” was set up in April 2011 DAM wrote that the process of setting up an Owners Association would “take several months to complete.” It has been over four years since that meeting.

The RERA circular on the role of Interim Boards is clear:

It states that “once the Interim Board is elected the developer must hand over to them a full register of purchasers and their contact details and any other information relevant to the operation of the development.”

Further RERA emphasized that “the developers and Interim Owners Associations must act in the utmost good faith with regard to the obligation and responsibilities as set down in the Regulations.” There is little evidence that the developer has acted, or is acting in good faith, for the betterment of the Executive Towers community.

I also draw your attention to Schedule 2 – the Code of Conduct for Association Managers – issued as part of Law 27 of 2007 concerning ownership of Jointly Owned Properties. Clause 4 states that “an Association Manager must at all times act in the best interest of the Owners Association and, without limitation, must not favour the interests of a developer or contractor over the interest of the Owners Association.”

The fact that Taziz was appointed by, and is wholly owned by, DPG is itself a considerable conflict of interest and clearly not in the best interests of the Owners Association.

Please also read Clause 7 of the Code of Conduct which you are clearly in breach of.

Clause 9 requires you to put contracts for goods and services out to tender. Please advise what action you will take to ensure that competitive tenders are received for all security and maintenance services.

Owners should be told why Taziz/DPG continue to ignore the 2007 JOP Laws. If it is DPG’s intent that no owners associations should be formed at Executive Towers then this needs to be communicated to owners together with an explanation of the legal position taken by DPG.

Perhaps what saddens me most is that DPG and Taziz have refused to establish any form of regular meeting/forum with owners and residents to work towards the betterment of the community.

Communication

There were early attempts in 2011 to issue a quarterly newsletter to owners and residents. There was even input from owners to try and ensure that the newsletter addressed real concerns.

In 2012 owners’ worked with Taziz to send out email updates for owners and residents on behalf of the Interim Owners Association.

Taziz now produces an annual community update. The report issued in March 2013 is instructive. On the front page it assure owners that “since 2010 one of Taziz’s key priorities has been to work with the relevant stakeholders and government authorities to ensure that….BBET remains fully compliant with all RERA regulations.” As noted above that is clearly not the case – and explanations have not been forthcoming.

The 2014 update stated that a quarterly update would be issued in 2015. There has been none.

Pedestrian Building Access and Common Area Completion

It was clearly not the original intent of the Developer that pedestrian access to the Towers should be through the car parks and through temporary ground floor lobbies. There are serious safety issues for pedestrians both from drivers who regard the car park as a race track and from the number of people that appear to be camped in the car parks on a daily basis, morning and night. DPG/Taziz should be responsible for providing safe, secure, and attractive access to the towers.

The reality is that I am embarrassed every time visitors come to our apartment. The lobby area is dirty; the entrance is adjacent to the garbage room; the furnishing is temporary; doors, walls and floors are damaged. It is an appalling introduction to the building. It would not require a great deal of effort, and some expense, to make the lobby more welcoming. I do not understand why this has not been done.

DPG and Taziz should ensure that the internal common areas maintain an aesthetic appeal similar to the original renderings and promotional material.

It is clearly unfortunate that DPG converted the original plan for a lake at the rear of the development into a large car park. It is equally unfortunate that this was done without consultation or communication with the owners. Externally there have been temporary renovation signs around the building for the last two years – clearly not so temporary.

The renovation of the lobby areas should be one of your first priorities and would make an immediate and positive impact on Tower B.

Pool and Fitness Areas

There has been more than enough correspondence on the unavailability of the East Heights swimming pool. But for months owners have been told that “we are continuously following up with the master developer once timelines are received we will share the same.” But Taziz reports to and is owned by the master developer. The fact that you appear unable to resolve this issue makes it clear that it is not a priority for you and that you are not hearing the residents who clearly want their pool and fitness facilities.

I have seen pictures earlier today of the condition of the pool and the surrounding area. Appalling is an understatement. The area appears to be suffering from wanton neglect. The longer the condition is allowed to deteriorate the more expensive any repairs and renovations will be.

It is time for Taziz/DPG to take action and to restore this facility for the benefit of owners and residents.

Roads and Access

For years road access to Executive Towers was appalling. Dirt, mud and potholes.

Now we have good road access; until that is we want to access our development. Between DPG (and I assume the RTA) you have made access to the buildings frustrating and at times near impossible.

All East and West Heights traffic is required to exit the development at the single (and single-lane) exit in front of Tower B. Yet your security staff allow cars and delivery vehicles to double park in front of Aspect Towers sometimes leading to a complete halt in the traffic flow.

The junction by the sales building where west heights traffic meets traffic entering east heights is an accident waiting to happen. The stop sign for West Heights traffic is ignored. The speed bumps removed or dismantled.

At peak times it takes far too long to enter or exit the towers.

Recently the access road in front of The Taj Hotel was blocked meaning that residents could not use the exit next to Choithrams to leave the towers. This has since been re—opened, I believe after residents complained to the RTA. What is not clear is if the original decision was the result of demands made by the developer or the Taj Hotel? In either case residents were neither consulted nor advised. And as Property Manager you need to be consulting and communicating with owners and residents on any issues that could impact the development, for good or bad.

Parking

On November 27 2012 Ms. Neish from Taziz advised that work on external car parking was due for completion by the end of 2012 and that “once the work is completed the barriers in Zone 1 will be activated and residents will be advised to park in their allocated spaces.”

Three years late the situation is unchanged. It remains one of the subjects that most vexes owners in East Heights.

Bizarrely Taziz insist that owners can secure their parking space with a parking blocker. Available for a significant cost (approx. aed1,100) including an administrative fee payable to Taziz. So we are in this bizarre situation where owners are expected to pay to prevent others from using our own allocated and purchased parking spaces, because your own security company is ineffective at ensuring that non-residents do not park in our building.

In the meantime Aspect Tower office staff flood into our parking spaces between 8am and 9am because they have been told by DPG that they are entitled to park in parking places that they do not own. Confront any of the people that work in Aspect Tower and they will tell you the same thing; that they have been given permission to park on our parking floors. DPG’s ability to rent out office space in Aspect Tower appears to be dependent on making parking spaces available – spaces that do not belong to DPG but to the owners.

This is not difficult to manage. Parking barriers; access cards; allocated parking and effective security.

Façade Creaking.

Façade Creaking has been an issue since handover. For five years there have been promises of action and rectification. There has been neither. You even issued a survey form in 2011 to better understand the extent of the problem. Still no action was taken.

If you are going to address this problem then do so. If you are not going to address this problem then please definitively inform owners that no work will be carried out .

Service fees.

2014 Accounts:

We are already in Q3 2015 and no accounts have yet been issued for 2014. Why is there a delay? Why have you not arranged for the auditors to present the financial statements to the owners as part of an AGM of owners?

For once owners and residents would like to see a manager that is pro-active in working with owners and residents to build a first-class community. This needs to be a manager who is aware that he is responsible and accountable to the owners as envisaged by the JoP laws; and not to the developer.

The reality is that owners and residents have no reason to trust Dubai Properties or its subsidiaries who have provided Executive Towers with six years if missed deadlines, ineffective management and misrepresentation.”

Of course, absolutely nothing happened. Dubai Properties continue to ignore the property laws of 2007 and to ensure that no owners association can be formed.

It is hard to know where to start; buyer beware is my best advice. And be prepared for genuinely poor management despite the high management fees after completion. We were paying nearly US$7,000 a year in fees for a 1,650 square foot apartment.