Update....
Paradise Lakes Towers’ new construction-linked payment plan ensures completion and delivery by 2011
April 30, 2010
R Holding and the Real Estate Investment Corporation (REIC) of Ajman have announced the launch of a new construction-linked payment schedule to ensure delivery of ‘Paradise Lakes Towers’ project by end of 2011 - a move that reflects the developer's determination to complete the project by the new deadline, which has been approved by ARRA. This follows the significant impact of the global economic tsunami on the world's real estate and other vital sectors, which resulted in the delay or cancellation of a huge number of real estate projects in the region and some parts of the world. The newly introduced payment plan will ensure that payments of installments will be made based on construction progress, which will be monitored by ARRA.
Under the terms of the new payment scheme, investors of ‘Paradise Lake Towers’ will be required to continue paying the remaining construction-linked installments, which would be channeled by Sweet Homes into the project's escrow account. The remaining 10 per cent would have to be paid on handover, upon which the transfer of title deed and registration will be affected in the names of the investor or Sweet Homes Holding. To further assure the speedy progress on the project, the developer has now undertaken the construction and infrastructure works on eight buildings within ‘Paradise Lake Towers’, including B2, B3, B4, B5, B6, B7, B8 and B9. ARRA underlined that understanding and cooperation between investors and developers will ensure timely completion of a project and avoid further postponement.
“The negative impact of the global economic meltdown and lack of cash flow have resulted in a delay in the construction and delivery of many real estate projects in the region as well as the AED 785 million residential complex in Ajman,” said Fahad Sattar Dero, CEO, Sweet Homes Holdings. “Industry professionals and some real estate experts have acknowledged that the delay in construction of real estate projects and investment buildings is beyond the developers' control, while others consider the current unprecedented financial crisis a ‘force majeure. By shifting to the new payment plan, investors are being assured of the project’s completion and delivery by December 31, 2011.”
More info:
http://dubaiconstructionupdate.blogspot.com/2010/04/paradise-lakes-tower...
what about infrastructure
what about infrastructure of the whole EC --- water ,electr., rodas , malls ,etc.... which is the responsibility of master developer who is the same as ajman gov body?
One more decision in favor of the developers
I guess this decision is again in favour of the developer not the investor. Investor has nothing in it to benifit, no guarntee, no penalty to developer, no - proce reduction due to market price adjustment, and so on ...
As mentioned in your post, under the terms of the new payment scheme, investors of ‘Paradise Lake Towers’ will be required to continue paying the remaining construction-linked installments.
I assue this is one more more to get payments from the investors?
What is the guarantee that it will be Handedover in 2011?, if the handover does not take place in 2011, will the investors get 100% refund of their amount paid to sweet homes? What is the penalty on the develper for the delay of the project? many more questions...
which need to be written in the agreement before the investors should start paying.
Additionally, no mention of the infrastructure as well?
As for me, I do not trust R-Holding/ARRA/Ajman Govt,they have made similar promises before which have not been fullfilled yet and they keep on changing based on their cash flow needs not for the project but to continue their life style...
What if not in 2011
There is no sentence from ARRA or Sweet homes, that in case if they collect the money and not deliver by Dec 2011 what ARRA or any authority will do for the investors.
Since we all have signed and respect the initial contract and developer has just backed out from their written contract so without any solid guarantee how investor will pay further to the developer in this market where 1 Bed room flat available in Ajman market @ AED 25,000/- per Annam where if we pay to developer its not less than AED 36,000/- with no clue what will happen in the future.
Developers has lost the faith of investors and believe them is next to impossible, the simple fact is when we bought ARRA was not there and we are not sure after one year or by end of 2011 ARRA may not there, dissolve by some other decree of the government.
If Ajman government come forward and ensure our investment and put the pressure on the developer to produce weekly / monthly progress chart and it to be declared with the revised contract and not only authority but investor can monitor the weekly progress by themselves before release any single dirham to the escrow account it should be not a problematic format if developers are serious and ARRA is transparent.
Same time every contract to be endorsed by master developer about the infrastructure, if developer made the property but couldn't handover without the basic facilities which suppose to provide by Master developer, so all payments installments to be linked with project development and community development as well.
If ARRA really want to help to developer through investors they must be very clear to their mind that only threatening to investors for payment will never success their project but transparent approach with developments and hefty penalties to both investors and developer
Hope ARRA will respect the investor simple demand before finalise any conclusions.
What about payment through Escrow Account
Additionally, I missed the point, can you please clarify, Does the payment go to sweet home account, which would be channeled by Sweet Homes into the project's escrow account?
It seems that ARRA had developed a law/system by which all payments are to be made to ESCROW account and not directly to the developer,in this case they have already started twisting their own law if my understanding is correct.
Can some one shad light on it..