Nakheel is legally permitted to privatise the beach clubs on its flagship development Palm Jumeirah, and doesn’t expect tenants to be happy with its decision, its chairman said.
The state-owned firm developer, which plans to charge homeowners at its Shoreline apartments up to AED5,000 a year to access the building’s pool and gym facilities, would not be pushing ahead with its plans if it did not have regulatory approval, Ali Lootah said on Wednesday.
“There is no issue with that, people want something which they are not entitled to,” he said.
“I cannot make everybody happy. They should read their contract. We checked legally, we went to RERA (Dubai’s real estate watchdog).
“RERA is the regulatory authority [and] we don’t do anything without taking approval from the regulatory. We abide by the law and we respect the law.”
Lootah said he did not see the move damaging Nakheel’s reputation internationally.
Service fees and additional charges have become a particular bone of contention between developers and homeowners since the collapse of Dubai’s real estate market in late-2008.
Developers who once saw millions of dollars in profit during Dubai’s real estate boom have struggled to stay afloat after the emirate’s property bubble burst, leading buyers to accuse companies of charging inflated fees for building upkeep or access to promised facilities in a bid to maintain a revenue stream.
Real estate analysts have said any move to charge for access to beach and pool facilities in buildings would be a further deterrent to investors mulling property deals in the emirate.
“Developers overpromised and under delivered,” Charles Neil, CEO of real estate consultancy Landmark Properties said.
“It’s really bad for the development community because investors in future just aren’t going to trust them and that’s why they’ll never get an off-plan market going again – because investors now want to touch it, feel it and see exactly what’s on offer,” he added.
Residents on the Shoreline have opposed the move. In a letter to RERA homeowners have called for the real estate watchdog to step in and declare them the legal owners of Shoreline’s communal areas, a move that would smooth the way for a housing association to dictate its own service charges for facilities.
“[This] is not what the owners want. All the boards of all the owners associations believe that the clubhouses are part of the common property of the Shoreline,” said one investor, who asked not to be named. “The description laid out in the UAE law [law 27 of 2007] points to them being common property as well.
“All the [owner associations] have written to RERA letting them know what we thought we had purchased - i.e. what we believed we were sold by Nakheel.”
Tenants living at the Tiara Residence on the Palm Jumeirah were told last month their families and guests must pay AED200 to use the pool, gym and beach at the weekends. Developer Zabeel Properties said in a circular to residents that the move was measure to reduce overcrowding.
Dubai Properties Group told Arabian Business in September that tenants in its $1.6bn Jumeirah Beach Residence development would also have to pay for access to its long-awaited beach club when it opens later this year.