Emirates City Forum

I received this from my saleman in UK.Please advise after reading.Is it worth going for another property in Dubai.It sound like Swapping.From frying pan to FIRE!!!!!!

Dear Customer
Please see the following from our Sales Department re Alhambra 2 and also possible upgrade to Dubai property. They are just asking for your feedback at this stage (and are NOT recommending anything at present).

Please reply back to me so that I can collate the customer feedback.

Rafia

Admin Department

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Possible Property IN DUBAI for AJMAN BUYERS

As you are aware, most of the property buyers who have purchased in Ajman from various developers have not seen much progress with their buildings. There are either likely to be long delays or the properties will eventually be cancelled. Following the credit crunch, we advised customers to stop making payments if they did not see clear and visible progress with their properties.

RE: Your Property in Alhambra 2 – CONFIDENTIAL UPDATE & PERSONAL ADVICE

You purchased from Tameerat (Ajman Developer) in Alhambra 2 Tower. Our understanding is that they have registered with ARRA and have done part of the the piling work (base foundations) only. We have not seen any evidence for ongoing construction for Alhambra 2. They state that they are proceeding with the build but have NOT offered a construction linked payment plan for Alhambra 2 and there is no evidence for these on their website www.tameerat.com. (all you see is a sign and empty plot with piling). When one of our Dubai staff visited the site (several months ago) they did not see evidence of any ongoing construction for Alhambra 2.

We regret having recommended this Ajman property to you in early 2008 (almost 2 years ago). At the time we did not envisage such issues. All of our Ajman customers have been similarly affected and we stopped selling properties in Ajman last year.

Your Possible Options:-

1. If Tameerat does proceed with significant development of Alhambra 2, at some point in the future they will ask you to start paying again:

a. You could comply with this and eventually get an apartment but one which is very much delayed.

b. You could refuse, in which case, you could lose the money already paid. There may be good reasons to refuse further payments even if they build Alhambra 2, as prices and infrastructure in Ajman are very poor. The amount of money you have outstanding may be higher than the present value of this Ajman property.

Until they make significant construction progress with Alhambra 2 (where you can physically see the building) then, our advice is that you should NOT re-start making payments and keep your payments on hold. They cannot force you to pay if they have made no significant construction progress on Alhambra 2, which is the building you have purchased in.

Feedback from a few customers suggests that they have already asked customers to make payments whilst not offering any evidence of significant construction or a construction linked payment plan for Alhambra 2. We advise you not to make any further payments until you have this, as most customers have already paid over 30%; and 30% of Alhambra 2 is definitely NOT complete!

2. If Tameerat cancels the Alhambra 2 building, they would be obliged to refund your money:-

a. They may offer you a unit in Alhambra 1 – Our advice would be NOT to accept this unless you have considered it carefully. If you accept, and if they do proceed with the construction of Alhambra 1, you will be obliged to make further payments and would not be entitled to a refund. Your agreement is for Alhambra 2 and if they cannot deliver this, they should refund your money.

b. They could refund your money voluntarily (after a variable length of time).

c. They may be forced to make a refund by legal action at some point in the future by you or on your behalf

d. With either of (b.) or (c.) they may only offer a partial refund and according to UAE Lawyers, there is still a risk that you may not get a refund at all ,if they go into administration or have no funds to repay.

Please also note that an Escrow Account does NOT guarantee completion of building or security of funds. Money from the escrow account can be used to pay for services, plot payments etc and be used in this way quite legally, without the building being completed. The Escrow account only specifies that the money is used for this project. It does not guarantee a refund if building is only partly built (e.g. foundations/piling only).

Your particular developer has indicated that they intend to go with option 1 and eventually re-start construction on top of the piling, fully construct, complete, add utilities and eventually hand over Alhambra 2. Normally it takes 4 years from start of construction to handover, assuming NO stoppages. However, not all events in Ajman are within the control of the developer, and whilst they may desire to be genuine, they may not deliver on their intentions due to external factors (such as lack of infrastructure, lack of utilities & electricity, master developer issues, Ajman government issues, investors stopping making payments, etc, etc,). Also they may be saying that they are going to build, just to avoid giving out refunds (this is our recent experience with many Ajman developers, although we are NOT accusing this developer of deliberately misleading you). However, at present there is no significant building to see for Alhambra 2.

If you ask for our personal view, we do not think that Alhambra 2 will be handed over within the next 5 years. There is a higher change that Alhambra 1 might be completed by that time, as Tameerat could pool the remaining customers who are willing to make payments. However, we cannot be certain of these things.

Thus our personal advice is that at preset you should NOT even consider making any further payments unless you get the progress mentioned above and a fair construction linked payment plan for Alhambra 2.

Dubai Property Upgrade Option

Some customers have asked us to find them similar apartments in Dubai (rather than Ajman), which are ‘ready’ or ‘nearly ready’ but still come with a good payment plan and a discount/’upgrade allowance’ which takes into account most or all of the payments already made for their property in Ajman.

We do understand that some customers may NOT want to consider any such property. We just want your views please (positive or negative)

WOULD YOU BE INTERESTED IN THIS or NOT?

PLEASE HAVE A READ BELOW AND LET US KNOW

We asked our Dubai Office to investigate such a volume discount deal from Dubai Developers. We specified that the criteria for such a deal should be as follows (from customer feedback):-

REQUESTED DUBAI PROPERTY CRITERIA

1. Main area within Dubai so it could be rented out easily. Not too far from the Airport.

2. 1 Bed or 2 Bed Apartments in Dubai (approximate cost less than AED 850 per sqft or lower in cheaper areas). Car park to be included in this price. Note that most customers who purchased in Ajman purchased for around AED 480 to 500 per sq ft. Pricing in Dubai was previously around AED 1200 to 1500 per sqft but has now fallen to less than AED 850 per sq ft in most good areas.

3. Property to be ready within 6 to 9 months, so that it could be used or rented out before the end of this year. The building must be already constructed and be in stage of internal fittings and decorations etc.

4. Previous customer payments to any Ajman developer must be taken into account (effectively a further discount)

5. Long Payment plan that provides about 35% to 40% of payments over 2 years POST completion (i.e. like a 5 year payment plan), so that some of this could come out of rental income.

6. Customers should still be able to claim a refund from their Ajman developer if their Ajman developer does not proceed with the construction and cancels the project.

Our Dubai Office is trying to negotiate a deal with Dubai Developers for an offer with the above criteria. It would be easier for us if we can get an idea of how many customers would be interested in such a proposition. If many customers were interested, we would be able to get a better deal from a developer who has ready or nearly ready property in Dubai. We do understand that some customers may not want to consider any such property. We just want your views please.

We would only make a recommendation once we had all the information. Initially our view is that such on offer would only make sense if:-

-You are still keen to have a property in the UAE

-Your financial circumstances are such that you can afford to start making payments again

Otherwise you should not consider such a purchase.

EXAMPLE

Here are possible payment examples for 1-Bed apartment in Dubai in a prime location. Note- Overall apartments in Dubai are larger and more expensive than Ajman, even in the current depressed market. NOTE- This EXAMPLE is to show you what MAY be on offer following the initial research. Please let us know your initial views.

If your finances are tight and you have purchased a 2-bedroom in Ajman, it may be worth considering just a 1-bed room in Dubai as this would be more affordable.

EXAMPLE 1 – 1-BED

A typical Ajman customer may have purchased a 1-Bed apartment for AED 500K in Ajman. They may have paid about 35% or about AED 175K to the Ajman developer. Amount approximate to this amount is taken into account, thus the Dubai 1-bed would be discounted from AED 779K to AED 607K. In this example customer would only need to pay an extra AED 256K by completion. Rest would be paid after completion and some of this could come out of rental income. Customer would still have a claim against Ajman developer for a full refund if their Ajman developer does not proceed with the construction and cancels the project.

PAYMENT PLAN
Unit
1 Bed

Dubai 1 Bed 900 sqft

Area
900.00
£ @ 6.2

Price
779,123
£125,665

Discount for Ajman Customer
171,407
£27,646

Total Cost to Pay
607,716
£98,019

Payment Plan
AED
£ @ 6.2
Ajman Customer

Original Booking
6,856
£1,106
PAID

Year 1 Payment
82,275
£13,270
PAID

Year 2 Payment
82,275
£13,270
PAID

Year 3 Payment A
83,412
£13,454
Pay Now

Year 3 Payment B - May 2010
89,370
£14,415
Pay in 3m

Year 3 Payment C -Aug 2010
83,412
£13,454
Pay in 6m

Completion

On Handover (Q4 2010)
89,370
£14,415

+ 3 m after completion
35,748
£5,766

+ 6 m after completion
35,748
£5,766

+ 9 m after completion
35,748
£5,766

+ 12 m after completion
35,748
£5,766

+ 15 m after completion
35,748
£5,766

+ 18 m after completion
35,748
£5,766

+ 21 m after completion
47,664
£7,688

TOTAL PRICE
779,123
£125,665

Discount for Already Paid –Ajman
171,407
27,646

TOTAL (For Ajman Customer)
607,716
£98,019

Pay Before Completion
256,194
£41,322

PLEASE LET US HAVE YOUR FEEDBACK – WOULD YOU BE INTERESTED IN SUCH AN OFFER OR NOT? Here the are options for replay

Option 1 – I am very interested

Option 2 – I may be interested

Options 3 – I am NOT interested in such a property

Please reply as this will give us an idea of how actively to push for this.

You should NOT consider this option, if you will find it difficult to stick to the payment plan.

In such a case you should just not make any further payments for your Ajman property if it remains stalled, and work for a refund or further progress, and review any offers you get from Tameerat. Would be happy to give our personal views on any matter, if requested.