It appears today that the Rent Committee has told Emaar/Hamptons tenants that the renewal clause will be reinstated in the contract and that Emaar/Hamptons will cover the Rent Committee costs of the tenants who brought actions.
We do not have any judgement in writing yet, but this verbal judgement was given to some tenants today and they were told that the matter is resolved. It appears that this decision has happened after the matter was escalated to the chairman of Emaar.
Presumably if this is the case then Hamptons will write to affected tenants to inform them. It may be worth contacting Hamptons by email to ask them to confirm that they accept this judgement and will issue revised leases for signing.
Hopefully there will be no further issues. We await details from Hamptons. Those tenants with pending cases over this issue at the Rent Committee are best advised to attend unless they have a new revised contract signed prior to their appointment date.
Monday, October 1, 2007
Thursday, September 13, 2007
Trip to the Rent Committe, part II
If you have a hearing scheduled at the rent committee, some advice up front:
1. Bring a good book
2. Bring another one in case you finish the first
3. Bring a toothbrush and a sleeping bag.
Your hearing may be scheduled for 10.30am, but you'll be lucky if you get heard before 1pm. And the case will probably be adjourned anyway, so you'll have to turn up again and go through the same process in a few weeks' time, even if the other party does actually turn up.
Hamptons seem to have hired a lawyer full time to hang out at the Rent Committee and defend their cases, presumably because they have so many.
When you do eventually get called you enter a small room with a Rent Committe judge, his assistants and the other party (most likely the Hamptons lawyer).
The judge speaks English but Hamptons appear to have hired a lawyer who does not, so unless you speak Arabic your only clue as to what is going on is what the judge tells you.
The standard procedure appears to be for the judge to hear the basic arguments and then adjourn the hearing to reconvene in around 3 weeks' time. So you'll have to bank on at least another day enjoying the comforts of the Rent Committe waiting area. You'll be lucky to get more than 10 minutes hearing for your 3 or 4 hour wait.
It seems quite a few people have filed claims against the removal of the renewal clause in the Hamptons leases. However, Hamptons appears to argue that this has no bearing on the meaning of the contract and is done purely for simplicity so that 'everyone is on the same contract'. Of course, it is not simple for the tenant who faced with a new contract each year must seek legal advice each time as to whether the changes are important or not or will impact their rights. It also seems the Rent Committee do not quite understand the importance of this clause in protecting the tenant from arbitrary notices to quit.
So if you have a Rent Committee hearing over the renewal clause it is important that you stress the following:
1. The renewal clause gives you the right to renew and protects you from a new owner claiming they want the apartment for their own use - i.e. it is vital.
2. While it may simplify matters for Hamptons to have the same contracts for everyone, it does not simplify matters for you to have a changed contract each year, because each tenant must then seek legal advice each year on the new contract. The judge might not think it is important, but how are tenants to know what is and is not important without costly legal advice each year? Hamptons is a big rich company, the tenants are not rich and it is unreasonable to expect each tenant to have to seek legal advice each year at cost to themselves because Hamptons changes the contract.
3. Hamptons is not your landlord, they are an agent for the landlord. Retaining Hamptons does not give your landlord the right to impose a new contract on you simply because other Hamptons leaseholders have accepted it.
The judge implied that the tenant could insist on having the same lease, in which case the later hearing would have to decide what to do. It is unclear what the outcome might be.
The judge did not feel that the changes were significant, but as we all know, they are. Without the renewal clause, the new landlord can concoct a cock and bull story about wanting to move into the apartment and evict you.
You may recall back at the beginning of the year that Hamptons assured tenants that if their apartments were sold, they would have the right to renew their lease and would not be presented with rent increases above what the Rent Law permitted, nor denied a lease renewal. Well, Hamptons lied. We know of at least one case where an apartment was sold and Hamptons (who are acting for the new landlord) sent the tenant a notice to quit the apartment in 12 months because the lease would not be renewed. They then insisted that to stay in the apartment, the tenant must sign a new lease with his rent increasing from 60,000 to 95,000 AED per year. So much for Hamptons promises - they themselves are actually turning up at the Rent Committee to defend attempts to increase tenants rents by 60% when legally they are obliged not to raise the rent at all (since it was increased the year before).
All in all, the experience is rather mixed. It seems that if your new landlord is stupid enough to write to you and say you can only stay in the apartment if you pay a new massively-inflated rent, then the Rent Committee will probably side with you. But if your landlord is more subtle and is prepared to hire an expensive lawyer, it seems you, the little guy, have little chance of any protection.
And so for now this appears to be the situation in Dubai. The worst fears of the tenants expressed earlier in the year seem well-founded. Many tenants have received notices to quit or been faced with massive rent increases. Others are having their contracts adjusted by stealth to make it easier to force them out in the near future.
Despite the rent laws and the Rent Committee, average rents in Dubai appear to have grown by about 60% in the last two years. The evidence suggests that the current government measures are not enough to stop the inflationary melt-down of the UAE economy. It's probably a good time for most expats to review their options and decide whether the dwindling rewards of a weak Dirham salary, massively increasing costs and general insecurities of life in Dubai really make Dubai a good place to build a future.
In 3 or 4 years, the real estate agents will probably be the only ones left and the whole economy will consist of them selling and reselling empty and unfinished apartments to each other, ad infinitum.
1. Bring a good book
2. Bring another one in case you finish the first
3. Bring a toothbrush and a sleeping bag.
Your hearing may be scheduled for 10.30am, but you'll be lucky if you get heard before 1pm. And the case will probably be adjourned anyway, so you'll have to turn up again and go through the same process in a few weeks' time, even if the other party does actually turn up.
Hamptons seem to have hired a lawyer full time to hang out at the Rent Committee and defend their cases, presumably because they have so many.
When you do eventually get called you enter a small room with a Rent Committe judge, his assistants and the other party (most likely the Hamptons lawyer).
The judge speaks English but Hamptons appear to have hired a lawyer who does not, so unless you speak Arabic your only clue as to what is going on is what the judge tells you.
The standard procedure appears to be for the judge to hear the basic arguments and then adjourn the hearing to reconvene in around 3 weeks' time. So you'll have to bank on at least another day enjoying the comforts of the Rent Committe waiting area. You'll be lucky to get more than 10 minutes hearing for your 3 or 4 hour wait.
It seems quite a few people have filed claims against the removal of the renewal clause in the Hamptons leases. However, Hamptons appears to argue that this has no bearing on the meaning of the contract and is done purely for simplicity so that 'everyone is on the same contract'. Of course, it is not simple for the tenant who faced with a new contract each year must seek legal advice each time as to whether the changes are important or not or will impact their rights. It also seems the Rent Committee do not quite understand the importance of this clause in protecting the tenant from arbitrary notices to quit.
So if you have a Rent Committee hearing over the renewal clause it is important that you stress the following:
1. The renewal clause gives you the right to renew and protects you from a new owner claiming they want the apartment for their own use - i.e. it is vital.
2. While it may simplify matters for Hamptons to have the same contracts for everyone, it does not simplify matters for you to have a changed contract each year, because each tenant must then seek legal advice each year on the new contract. The judge might not think it is important, but how are tenants to know what is and is not important without costly legal advice each year? Hamptons is a big rich company, the tenants are not rich and it is unreasonable to expect each tenant to have to seek legal advice each year at cost to themselves because Hamptons changes the contract.
3. Hamptons is not your landlord, they are an agent for the landlord. Retaining Hamptons does not give your landlord the right to impose a new contract on you simply because other Hamptons leaseholders have accepted it.
The judge implied that the tenant could insist on having the same lease, in which case the later hearing would have to decide what to do. It is unclear what the outcome might be.
The judge did not feel that the changes were significant, but as we all know, they are. Without the renewal clause, the new landlord can concoct a cock and bull story about wanting to move into the apartment and evict you.
You may recall back at the beginning of the year that Hamptons assured tenants that if their apartments were sold, they would have the right to renew their lease and would not be presented with rent increases above what the Rent Law permitted, nor denied a lease renewal. Well, Hamptons lied. We know of at least one case where an apartment was sold and Hamptons (who are acting for the new landlord) sent the tenant a notice to quit the apartment in 12 months because the lease would not be renewed. They then insisted that to stay in the apartment, the tenant must sign a new lease with his rent increasing from 60,000 to 95,000 AED per year. So much for Hamptons promises - they themselves are actually turning up at the Rent Committee to defend attempts to increase tenants rents by 60% when legally they are obliged not to raise the rent at all (since it was increased the year before).
All in all, the experience is rather mixed. It seems that if your new landlord is stupid enough to write to you and say you can only stay in the apartment if you pay a new massively-inflated rent, then the Rent Committee will probably side with you. But if your landlord is more subtle and is prepared to hire an expensive lawyer, it seems you, the little guy, have little chance of any protection.
And so for now this appears to be the situation in Dubai. The worst fears of the tenants expressed earlier in the year seem well-founded. Many tenants have received notices to quit or been faced with massive rent increases. Others are having their contracts adjusted by stealth to make it easier to force them out in the near future.
Despite the rent laws and the Rent Committee, average rents in Dubai appear to have grown by about 60% in the last two years. The evidence suggests that the current government measures are not enough to stop the inflationary melt-down of the UAE economy. It's probably a good time for most expats to review their options and decide whether the dwindling rewards of a weak Dirham salary, massively increasing costs and general insecurities of life in Dubai really make Dubai a good place to build a future.
In 3 or 4 years, the real estate agents will probably be the only ones left and the whole economy will consist of them selling and reselling empty and unfinished apartments to each other, ad infinitum.
Tuesday, August 14, 2007
A Trip to the Rent Committee
The Rent Committee is Dubai's answer to the increasing problems for tenants faced with rent demands above the official rent cap or eviction demands (most likely due to the landlord wishing to sidestep the rent cap and rent out the property to a new tenant at a higher rent).
Some Greens apartments have been sold to third parties who are trying to impose 60% rent increases on the tenants by refusing to renew leases and instead only offering a new lease at inflated rent. Tenants in Greens apartments that are still owned by Emaar are being offered the same rent (in accordance with the rent cap law) but a slightly modified lease that removes the right to renew.
The law is apparently clear; any new landlord takes over the obligations of the lease, including the obligation to renew the lease if requested by the tenant. He must do this at a rent that is in accordance with the rent cap law (i.e. no rent increase if your rent increased last year). The law also requires that the renewal be on the same terms.
To file a complaint requires a trip to the Rent Committee. This is located in Deira at the Dubai Municipality building next to the creek. It's a big cube shaped building with "Dubai Municipality" in big letters visible from streets away. You cannot miss it.
The first step is to go to the counter, and they will advise that you get a ticket from the machine by the door. When you number is called, you will go to a small numbered room where you can talk to an advisor who will recommend whether to proceed or not. The advice from him regarding Emaar's new lease is that the lease must be offered on the same terms and that you should lodge a complaint if it is not. Apparently he said that many people have already done so.
The next steps are a little confused. You will require passport copies, both the old lease and the new one (if not available because your landlord won't supply one, put that information in your claim). You will then have to go to another counter to get an Arabic version of your complaint typed. It helps if you prepare a brief summary of what you want in English if you do not write Arabic. Keep it short and to the point, e.g.
1. The landlord has increased the rent beyond the rent cap and I wish to have the rent cap applied.
2. The landlord has changed the terms and conditions of the new lease and I wish to have the lease renewed with the original terms and conditions.
Have some cash with you as this Arabic translation costs 25 AED.
Next you have to visit another desk for the data to be entered to the computer system. You will then have to take your papers to the cashier desk and pay 3.5% of the current annual rent (you can use credit card at some marked windows). Get a photocopy of the receipt and the complaint form (the Arabic one you had translated) as you'll need these for the next step.
Finally, you need to visit a couple more rooms to get various signatures and stamps and then you will be allocated a date to turn up at the hearing.
The process is a little convoluted, but if you turn up early there are not too many people around and the staff are helpful in advising you where to go for each step.
If you win your complaint, the landlord will have to repay the fees you paid back to you.
The Dubai Government has provided the rent committee to provide some protection for tenants' rights and to help fight the damaging inflationary spiral that rent rises and bogus evictions are causing. While the process is not hassle-free, it only takes a couple of hours. You cannot complain about the system if you are unwilling to use the protections provided. Time will tell, but hopefully those Greens tenants who seek to use the protection of the rent committee will achieve a just outcome.
Some Greens apartments have been sold to third parties who are trying to impose 60% rent increases on the tenants by refusing to renew leases and instead only offering a new lease at inflated rent. Tenants in Greens apartments that are still owned by Emaar are being offered the same rent (in accordance with the rent cap law) but a slightly modified lease that removes the right to renew.
The law is apparently clear; any new landlord takes over the obligations of the lease, including the obligation to renew the lease if requested by the tenant. He must do this at a rent that is in accordance with the rent cap law (i.e. no rent increase if your rent increased last year). The law also requires that the renewal be on the same terms.
To file a complaint requires a trip to the Rent Committee. This is located in Deira at the Dubai Municipality building next to the creek. It's a big cube shaped building with "Dubai Municipality" in big letters visible from streets away. You cannot miss it.
The first step is to go to the counter, and they will advise that you get a ticket from the machine by the door. When you number is called, you will go to a small numbered room where you can talk to an advisor who will recommend whether to proceed or not. The advice from him regarding Emaar's new lease is that the lease must be offered on the same terms and that you should lodge a complaint if it is not. Apparently he said that many people have already done so.
The next steps are a little confused. You will require passport copies, both the old lease and the new one (if not available because your landlord won't supply one, put that information in your claim). You will then have to go to another counter to get an Arabic version of your complaint typed. It helps if you prepare a brief summary of what you want in English if you do not write Arabic. Keep it short and to the point, e.g.
1. The landlord has increased the rent beyond the rent cap and I wish to have the rent cap applied.
2. The landlord has changed the terms and conditions of the new lease and I wish to have the lease renewed with the original terms and conditions.
Have some cash with you as this Arabic translation costs 25 AED.
Next you have to visit another desk for the data to be entered to the computer system. You will then have to take your papers to the cashier desk and pay 3.5% of the current annual rent (you can use credit card at some marked windows). Get a photocopy of the receipt and the complaint form (the Arabic one you had translated) as you'll need these for the next step.
Finally, you need to visit a couple more rooms to get various signatures and stamps and then you will be allocated a date to turn up at the hearing.
The process is a little convoluted, but if you turn up early there are not too many people around and the staff are helpful in advising you where to go for each step.
If you win your complaint, the landlord will have to repay the fees you paid back to you.
The Dubai Government has provided the rent committee to provide some protection for tenants' rights and to help fight the damaging inflationary spiral that rent rises and bogus evictions are causing. While the process is not hassle-free, it only takes a couple of hours. You cannot complain about the system if you are unwilling to use the protections provided. Time will tell, but hopefully those Greens tenants who seek to use the protection of the rent committee will achieve a just outcome.
Sunday, August 5, 2007
From Rent Committee General Secretary - "Tenants can stay in rented homes for at least 3 years"
The Dubai Rent Committee has cleared air, and announced that landlords who wish to move back into their homes that have been rented out, cannot do so, until the tenants completes three years of contract.
Despite the fact that the standard rental contracts last one year, unless the agreement signed by both parties state otherwise, the rent committee would still stand in support of the leaseholder.
The General Secretary of the Committee, Mohammad Ahmad Al Shaikh, said the tenants have the right to stay in the property, due to the money invested in furnishing the house.
"It is no doubt, the prerogative of the house owners to live in their own house. But, in case, they have decided to let out the house for rent, they should understand that it is for a minimum of three years, though the contract is signed only for a year," Al Shaikh said.
Many landlords are said to have approached the rent committee as the tenants are refusing to vacate the property. But, according to Al Shaikh, the case will move in favour of landlord, only if, the contract clearly states that the house will have to be vacated after a year.
In the meanwhile, the landlords have branded the rule as "absurd" and "against the basic principles of ownership laws", as it prevents them from moving into their own house, but, the tenants have welcomed the policy.
As per the guidelines issued by the rent committee, the landlords who wished to move back into their own homes, could do so, provided, they do not rent our their house again.
The committee says that in case the landlord wishes to move back to their own house, their intention behind doing so, should be proven, and the landlord should ensure that the tenants are provided with sufficient notice period.
Any landlords violating these conditions will have to bear the consequences, the rent committee said.
Original story: http://www.estatesdubai.com/2007/07/tenants-permitted-to-stay-for-three.html
Despite the fact that the standard rental contracts last one year, unless the agreement signed by both parties state otherwise, the rent committee would still stand in support of the leaseholder.
The General Secretary of the Committee, Mohammad Ahmad Al Shaikh, said the tenants have the right to stay in the property, due to the money invested in furnishing the house.
"It is no doubt, the prerogative of the house owners to live in their own house. But, in case, they have decided to let out the house for rent, they should understand that it is for a minimum of three years, though the contract is signed only for a year," Al Shaikh said.
Many landlords are said to have approached the rent committee as the tenants are refusing to vacate the property. But, according to Al Shaikh, the case will move in favour of landlord, only if, the contract clearly states that the house will have to be vacated after a year.
In the meanwhile, the landlords have branded the rule as "absurd" and "against the basic principles of ownership laws", as it prevents them from moving into their own house, but, the tenants have welcomed the policy.
As per the guidelines issued by the rent committee, the landlords who wished to move back into their own homes, could do so, provided, they do not rent our their house again.
The committee says that in case the landlord wishes to move back to their own house, their intention behind doing so, should be proven, and the landlord should ensure that the tenants are provided with sufficient notice period.
Any landlords violating these conditions will have to bear the consequences, the rent committee said.
Original story: http://www.estatesdubai.com/2007/07/tenants-permitted-to-stay-for-three.html
Thursday, April 5, 2007
Anyone got a new landlord yet?
We're aware that some people have opted to purchase their apartments. But for those who confirmed over a month ago that they would not, we're not aware of anyone being contacted regarding their new landlord yet.
Considering that EMAAR originally wanted tenants to purchase in just two weeks, it seems rather strange that after a month of the apartments "being offered for sale on the open market" they are yet to inform tenants of their new landlords (if indeed the apartments have been sold).
And if the apartments have not been sold yet, it does rather cast doubt on EMAAR's claims to have purchasers lined up and chomping at the bit to buy.
Maybe the urgency by EMAAR was just designed to pressure tenants into buying? EMAAR presumably knows that a tenanted property, with the tenant on well below market rent, is not worth anywhere near what a similar apartment with 'vacant possession' would be (since it cannot be occupied or rented out at market rate). So what better way to maximize revenue than to cajole the current occupant into buying something he can currently rent at half the price?
And if you believe in property for long term growth, why not put money down on a new 2-bed for delivery in 2009, which would cost less than a 1-bed in the Greens now? That 2-bed is certainly going to be worth more than the Greens 1-bed once it is built.
Meanwhile, EMAAR's share price in the past couple of weeks has hit new lows, dropping to well below 11 dirhams.
Considering that EMAAR originally wanted tenants to purchase in just two weeks, it seems rather strange that after a month of the apartments "being offered for sale on the open market" they are yet to inform tenants of their new landlords (if indeed the apartments have been sold).
And if the apartments have not been sold yet, it does rather cast doubt on EMAAR's claims to have purchasers lined up and chomping at the bit to buy.
Maybe the urgency by EMAAR was just designed to pressure tenants into buying? EMAAR presumably knows that a tenanted property, with the tenant on well below market rent, is not worth anywhere near what a similar apartment with 'vacant possession' would be (since it cannot be occupied or rented out at market rate). So what better way to maximize revenue than to cajole the current occupant into buying something he can currently rent at half the price?
And if you believe in property for long term growth, why not put money down on a new 2-bed for delivery in 2009, which would cost less than a 1-bed in the Greens now? That 2-bed is certainly going to be worth more than the Greens 1-bed once it is built.
Meanwhile, EMAAR's share price in the past couple of weeks has hit new lows, dropping to well below 11 dirhams.
Wednesday, March 14, 2007
Emaar Annual General Meeting descends into shouting match
After Emaar chairman Mohammad Al Abbar announced a palty 20 fils (down from 40fils last year) stock dividend, angry shareholders refused several times to vote for the payout. Many investors who had bought Emaar shares on margin (borrowing money to buy the stock in the hope of the share price appreciating) were desperate for cash to offset their losses.
Big barney at Emaar AGM
Al Abbar said the company thinks it is more important to invest in the long-term future of the company.
"I criticise most of the companies in other Arab countries, because they only work for today," he said, adding that Emaar needs to have adequate capital to seize opportunities in countries such as India.
In other words, quite possibly money is running short and the prospect of profits in Dubai is deteriorating and forcing the company to focus elsewhere.
No 'working for today' for Emaar of course. They allow at least a couple of weeks for residents to make important decisions like purchasing the property they're living in!!!
The markets don't seem happy judging by the Emaar share price which dropped more than 5%. Emaar stock in the last two years has proven itself a spectacularly successful way to lose 75% of your investment. Hopefully its property offerings won't fair so badly.
Meanwhile in the US, the traditional leader of the global economic cycle, the property market is being rocked further by the implosion of the sub-prime lending market.
US stocks fall heavily again on mortgage lender fears
With many Dubai mortgage lenders now offering 97% mortgages, and a huge supply of property likely to hit the market this year, the chance of similar conditions to the US emerging here seems all too likely.
Big barney at Emaar AGM
Al Abbar said the company thinks it is more important to invest in the long-term future of the company.
"I criticise most of the companies in other Arab countries, because they only work for today," he said, adding that Emaar needs to have adequate capital to seize opportunities in countries such as India.
In other words, quite possibly money is running short and the prospect of profits in Dubai is deteriorating and forcing the company to focus elsewhere.
No 'working for today' for Emaar of course. They allow at least a couple of weeks for residents to make important decisions like purchasing the property they're living in!!!
The markets don't seem happy judging by the Emaar share price which dropped more than 5%. Emaar stock in the last two years has proven itself a spectacularly successful way to lose 75% of your investment. Hopefully its property offerings won't fair so badly.
Meanwhile in the US, the traditional leader of the global economic cycle, the property market is being rocked further by the implosion of the sub-prime lending market.
US stocks fall heavily again on mortgage lender fears
With many Dubai mortgage lenders now offering 97% mortgages, and a huge supply of property likely to hit the market this year, the chance of similar conditions to the US emerging here seems all too likely.
Saturday, March 10, 2007
Revaluation of the UAE Dirham getting closer?
From the UAEinteract site:
The UAE will not revalue its currency ahead of other GCC states, the Central Bank governor said yesterday. The continued decline of the dollar has weakened Gulf currencies, which are pegged to the greenback.
Sultan Nasser Al Suwaidi said Gulf states will discuss whether to revalue their currencies at the April meeting of central bank governors. "We will not act unilaterally," Al Suwaidi said. "But if [the governors] come to the conclusion that we should go in this direction or that direction, we will go along."
Gulf nations pegged their currencies to the dollar in 2003 under a plan to unite under a single currency by 2010. However, with questions of a possible delay to the union, and with the dollar falling 10 per cent against the euro last year, speculation of a Gulf-wide currency revaluation has risen in recent weeks.
Last month, investors betting on revaluation drove the UAE dirham and the Kuwaiti dinar to record highs.
The UAE Central Bank maintains that inflation is due to rent and property price rises and will subside this year as more supply comes to market. That's not what Emaar and the various well connected property developers are saying - in public the sales shill is just the same - that property will continue to rise in price impressively forever. They'd have a job shifting the stuff otherwise of course...
But they cannot both be right. For a central bank to put its inflation hopes on the supply/demand balance of property shifting towards the end of 2007 smacks of ostriches sticking their heads in the sand. And if the prices don't stabilize this year, what next? Do they have a plan B?
If the UAE wants long term stability and to establish itself as a business-friendly environment, the first step is to set an inflation target of 2-3% and stick to it. But we may well find in April that the other GCC countries take the decision that Dubai really needs and revalue the GCC currencies anyway.
The UAE will not revalue its currency ahead of other GCC states, the Central Bank governor said yesterday. The continued decline of the dollar has weakened Gulf currencies, which are pegged to the greenback.
Sultan Nasser Al Suwaidi said Gulf states will discuss whether to revalue their currencies at the April meeting of central bank governors. "We will not act unilaterally," Al Suwaidi said. "But if [the governors] come to the conclusion that we should go in this direction or that direction, we will go along."
Gulf nations pegged their currencies to the dollar in 2003 under a plan to unite under a single currency by 2010. However, with questions of a possible delay to the union, and with the dollar falling 10 per cent against the euro last year, speculation of a Gulf-wide currency revaluation has risen in recent weeks.
Last month, investors betting on revaluation drove the UAE dirham and the Kuwaiti dinar to record highs.
The UAE Central Bank maintains that inflation is due to rent and property price rises and will subside this year as more supply comes to market. That's not what Emaar and the various well connected property developers are saying - in public the sales shill is just the same - that property will continue to rise in price impressively forever. They'd have a job shifting the stuff otherwise of course...
But they cannot both be right. For a central bank to put its inflation hopes on the supply/demand balance of property shifting towards the end of 2007 smacks of ostriches sticking their heads in the sand. And if the prices don't stabilize this year, what next? Do they have a plan B?
If the UAE wants long term stability and to establish itself as a business-friendly environment, the first step is to set an inflation target of 2-3% and stick to it. But we may well find in April that the other GCC countries take the decision that Dubai really needs and revalue the GCC currencies anyway.
Sunday, March 4, 2007
Potential buyers beware! - understand your rights before you buy our homes
Those tenants who cannot or choose not to purchase their Greens apartments now face the prospect of their homes being put on the open market. If the apartment is sold promptly as Emaar clearly intends, you can expect notification shortly of who your new landlord is.
It is important that tenants in the Greens apartments that Emaar is selling understand their rights. Due to the rent cap laws, the new owner will almost certainly want the tenant out at the earliest possible opportunity in order to either take possession for himself, or rent to a new tenant at the market rate. But this is exactly the kind of act that the Rent Committee was set up to prevent. While we have been unable to get Emaar or Hamptons to state on the record what their understanding of the laws are, the reason may well be because they'd rather potential purchasers not know.
Here is an article demonstrating the protection that the Rent Committee can offer tenants not just against eviction, but even against having their tenancy limited via the proliferation of 'one year' clauses:
The rent committee steps in to protect a tenant in the Springs
Tenants (and potential purchasers) take note: the rent committee is not a toothless talking shop, but wields real power to protect tenants rights. It can not only prevent rent increases above the government's rent cap limit, but can prevent evictions and can even stop the landlord trying to impose a new lease agreement that gives him possession after one year.
Since the vast majority of Greens tenants wish to stay put, it is important for potential purchasers of our apartments to understand what they are buying: a property with a sitting tenant who will do whatever he or she can to stay put, with the protection of the rent committee. Most tenants will resist any attempts at eviction, unlawful rent increases or changes in the terms of their leases that require them to vacate the property after one year.
Potential landlords beware! Emaar is selling you an apartment at market rate, but you have a sitting tenant who might enjoy capped rent and tenancy protection for years to come. It doesn't look such a good investment now does it? Especially when for a similar price you could buy an empty apartment somewhere else and get 40-50% more income immediately, and just the same capital growth.
It is important that tenants in the Greens apartments that Emaar is selling understand their rights. Due to the rent cap laws, the new owner will almost certainly want the tenant out at the earliest possible opportunity in order to either take possession for himself, or rent to a new tenant at the market rate. But this is exactly the kind of act that the Rent Committee was set up to prevent. While we have been unable to get Emaar or Hamptons to state on the record what their understanding of the laws are, the reason may well be because they'd rather potential purchasers not know.
Here is an article demonstrating the protection that the Rent Committee can offer tenants not just against eviction, but even against having their tenancy limited via the proliferation of 'one year' clauses:
The rent committee steps in to protect a tenant in the Springs
Tenants (and potential purchasers) take note: the rent committee is not a toothless talking shop, but wields real power to protect tenants rights. It can not only prevent rent increases above the government's rent cap limit, but can prevent evictions and can even stop the landlord trying to impose a new lease agreement that gives him possession after one year.
Since the vast majority of Greens tenants wish to stay put, it is important for potential purchasers of our apartments to understand what they are buying: a property with a sitting tenant who will do whatever he or she can to stay put, with the protection of the rent committee. Most tenants will resist any attempts at eviction, unlawful rent increases or changes in the terms of their leases that require them to vacate the property after one year.
Potential landlords beware! Emaar is selling you an apartment at market rate, but you have a sitting tenant who might enjoy capped rent and tenancy protection for years to come. It doesn't look such a good investment now does it? Especially when for a similar price you could buy an empty apartment somewhere else and get 40-50% more income immediately, and just the same capital growth.
Thursday, March 1, 2007
If you're worried about eviction by new landlord, you can leave now!
Some of us met with Jeevan J D'Mello of EMAAR regarding feedback on our previous requests. It seemed that despite the job title of 'Director' he was not actually a company director, more a manager, lacking the authority required to negotiate deals and sign off agreements on behalf of his company without recourse to his bosses (who *are* actual company directors presumably). Anyhow, we appreciated him meeting us even if he wasn't really allowed to do anything except repeat the EMAAR PR releases.
He did at one point generously state that if tenants were worried about having a new landlord who might evict them, EMAAR would (probably) accept them terminating their tenancy now, with a refund of outstanding rent. In other words, if you are worried about eviction and higher rents from a new landlord in a few months time, you always have the option of facing that now instead. What a deal!
Regardless, we pushed EMAAR to try to get some movement on the points at issue. In particular:
1. That EMAAR extend the leases of existing tenants who wish to, such that any new owner would be bound to accommodate the tenant for at least the duration of their current tenancy plus one year
Amazingly, despite Hamptons being self-styled property 'experts' and EMAAR being the country's largest property developer and 30% owned by the Dubai Government, both claimed not to know with certainty what the rent laws actually were! And these are the 'experts'!? By this evidence, Dubai has some way to go in terms of legal development and business competence. Despite assuring us that they think you would have to be offered at least another year, they would not put it in writing and said that despite their understanding of the laws "there are no guarantees". Indeed.
Despite insisting that they have a waiting list of investors interested in capital growth not evictions, Mr D'Mellow stated absolutely that his bosses would not permit any lease changes to provide any more security (such as a year lease extension) to tenants other than what the law provides for (which they were unsure of anyway). The Rent Cap Laws aimed to stabilize rents, yet average rents in Dubai continue to climb at double digit rates. Despite the Dubai Government's stated aims to stabilize costs in Dubai and stem rampant inflation, it appears the 30% Dubai Government shareholding in EMAAR has not been used to influence EMAAR's decision towards preserving a large amount of reasonably priced rental accommodation in the Emirate.
2. That EMAAR offer more incentives, more time and more flexible payment plans for those who might be interested in buying.
It seems that only a tiny minority of affected tenants will actually buy. The few who do buy will largely do so through having succumbed to the "buy now or else" bullying tactics employed by EMAAR. After all, if people wanted to buy apartments at market rate, there are plenty of those for sale in Dubai already. Far too many in fact, with more coming on stream all the time.
Mr D'Mello agreed to raise the point regarding further small discounts with his directors, but since EMAAR is about to start its 'closing down' style sale imminently, it seems that they are more interested in money now regardless of who it comes from than in repaying the loyalty of customers with several years standing.
On a lighter note, Mr D'Mello assured us that the reason for the snap sale is nothing to do with any impending shock to the market in the next couple of months that EMAAR management have got wind of (think floating currency and massive interest rate hikes to fight inflation or the potential for Iranian military responses against US interests in the region). But then again, EMAAR also stated that the decision to sell was based on requests from tenants and just a couple of weeks ago that there were no plans to dump Lakes stock into the market in a similar fashion to the Greens sale.
So in the end, it's every tenant's choice. EMAAR is not going to change its mind and you must pin your hopes on a successful visit to the Rent Committee if you don't plan on buying, because it's pretty clear the new buyer will see you as a liability not an asset and do whatever they can to get you out as soon as the law allows.
Such uncertainty and instability has become part of the Dubai experience, and it's something we all have to factor in when making decisions about our future. As inflation rages, the calculations most of us made to justify coming here increasingly don't add up. Those who came a few years ago have seen costs double or triple since then. Many companies will be doing the same calculations and looking for more stable cost bases elsewhere.
The problem for Dubai is that on the one hand it is trying to convince real estate investors that property prices and rent receipts will rise impressively forever, while on the other hand telling international companies that costs will stabilize. There is an obvious contradiction, but at this point it's difficult to see which argument is going to give out first.
He did at one point generously state that if tenants were worried about having a new landlord who might evict them, EMAAR would (probably) accept them terminating their tenancy now, with a refund of outstanding rent. In other words, if you are worried about eviction and higher rents from a new landlord in a few months time, you always have the option of facing that now instead. What a deal!
Regardless, we pushed EMAAR to try to get some movement on the points at issue. In particular:
1. That EMAAR extend the leases of existing tenants who wish to, such that any new owner would be bound to accommodate the tenant for at least the duration of their current tenancy plus one year
Amazingly, despite Hamptons being self-styled property 'experts' and EMAAR being the country's largest property developer and 30% owned by the Dubai Government, both claimed not to know with certainty what the rent laws actually were! And these are the 'experts'!? By this evidence, Dubai has some way to go in terms of legal development and business competence. Despite assuring us that they think you would have to be offered at least another year, they would not put it in writing and said that despite their understanding of the laws "there are no guarantees". Indeed.
Despite insisting that they have a waiting list of investors interested in capital growth not evictions, Mr D'Mellow stated absolutely that his bosses would not permit any lease changes to provide any more security (such as a year lease extension) to tenants other than what the law provides for (which they were unsure of anyway). The Rent Cap Laws aimed to stabilize rents, yet average rents in Dubai continue to climb at double digit rates. Despite the Dubai Government's stated aims to stabilize costs in Dubai and stem rampant inflation, it appears the 30% Dubai Government shareholding in EMAAR has not been used to influence EMAAR's decision towards preserving a large amount of reasonably priced rental accommodation in the Emirate.
2. That EMAAR offer more incentives, more time and more flexible payment plans for those who might be interested in buying.
It seems that only a tiny minority of affected tenants will actually buy. The few who do buy will largely do so through having succumbed to the "buy now or else" bullying tactics employed by EMAAR. After all, if people wanted to buy apartments at market rate, there are plenty of those for sale in Dubai already. Far too many in fact, with more coming on stream all the time.
Mr D'Mello agreed to raise the point regarding further small discounts with his directors, but since EMAAR is about to start its 'closing down' style sale imminently, it seems that they are more interested in money now regardless of who it comes from than in repaying the loyalty of customers with several years standing.
On a lighter note, Mr D'Mello assured us that the reason for the snap sale is nothing to do with any impending shock to the market in the next couple of months that EMAAR management have got wind of (think floating currency and massive interest rate hikes to fight inflation or the potential for Iranian military responses against US interests in the region). But then again, EMAAR also stated that the decision to sell was based on requests from tenants and just a couple of weeks ago that there were no plans to dump Lakes stock into the market in a similar fashion to the Greens sale.
So in the end, it's every tenant's choice. EMAAR is not going to change its mind and you must pin your hopes on a successful visit to the Rent Committee if you don't plan on buying, because it's pretty clear the new buyer will see you as a liability not an asset and do whatever they can to get you out as soon as the law allows.
Such uncertainty and instability has become part of the Dubai experience, and it's something we all have to factor in when making decisions about our future. As inflation rages, the calculations most of us made to justify coming here increasingly don't add up. Those who came a few years ago have seen costs double or triple since then. Many companies will be doing the same calculations and looking for more stable cost bases elsewhere.
The problem for Dubai is that on the one hand it is trying to convince real estate investors that property prices and rent receipts will rise impressively forever, while on the other hand telling international companies that costs will stabilize. There is an obvious contradiction, but at this point it's difficult to see which argument is going to give out first.
Wednesday, February 28, 2007
New meeting with EMAAR
We are trying to arrange another meeting with EMAAR in order to follow up the points raised at the last meeting. However, EMAAR's decision to sell the Lakes (despite previous denials made at the time the Greens sale was announced) has rather let the cat out of the bag. It is pretty clear now that EMAAR is extremely anxious to liquidate its rental assets with almost immediate effect.
7days - EMAAR at it again
Speculation on the 7days comments is clearly rife, but it is pretty clear that the manner and rapidity of this sale seems to verge on 'panic selling'. Few organizations would embark on such a hurried sale and attract the inevitable bad headlines that result without good reason. The fact that EMAAR would approach the Lakes sale in a similar way after the outcry over the manner of the Greens sale is quite telling. EMAAR, it appears, must sell everything and it must sell now regardless of public opposition, bad headlines or the apparent contradiction with the Dubai Government's stated aims of stabilizing rental prices.
When it comes to precise reasons, it's anyone's guess. Possibly best to avoid the world news if you don't want to scare yourself too much. But whatever it is, it's probably going to happen in March or April judging by EMAAR's short deadlines. By then, it might all make more sense.
7days - EMAAR at it again
Speculation on the 7days comments is clearly rife, but it is pretty clear that the manner and rapidity of this sale seems to verge on 'panic selling'. Few organizations would embark on such a hurried sale and attract the inevitable bad headlines that result without good reason. The fact that EMAAR would approach the Lakes sale in a similar way after the outcry over the manner of the Greens sale is quite telling. EMAAR, it appears, must sell everything and it must sell now regardless of public opposition, bad headlines or the apparent contradiction with the Dubai Government's stated aims of stabilizing rental prices.
When it comes to precise reasons, it's anyone's guess. Possibly best to avoid the world news if you don't want to scare yourself too much. But whatever it is, it's probably going to happen in March or April judging by EMAAR's short deadlines. By then, it might all make more sense.
Thursday, February 22, 2007
EMAAR to sell Lakes too
As predicted here previously, EMAAR appears to be dumping the whole of its rental stock into the market for urgent sale. Lakes tenants of EMAAR are being informed in similar fashion to those of us in the Greens that they have just three weeks to decide to buy, or their homes will be sold from under them.
EMAAR press release
The speed and timing at which EMAAR wants to get rid of its stock of rental properties has obviously raised eyebrows. One can only speculate at the reasons for the almost unbelievable urgency and EMAAR's insistence that everything must go one way or another within a few short weeks. With most of the properties having leases of several months remaining, there seems no obvious reason why a more carefully planned sale could not be phased in at the point each lease is due for renewal.
EMAAR's PR states that with the freehold laws, people prefer to buy rather than rent. But the reaction of tenants in the Greens, and the tiny number who're actually considering buying, suggests otherwise. It seems disingenuous for EMAAR to suggest that their decision to sell is driven by the wishes of tenants, when it's virtually impossible to find a tenant who welcomes the EMAAR decision and hardly any tenants seem to be taking up EMAAR's offer.
Why the desperation to sell now rather than in a few months time? Many market pundits have viewed the oversupply of middle and high-end property in Dubai that will emerge in 2007 as a possible turning point for prices, but any declines are likely to be drawn out affairs, so that alone does not seem to explain the sense of urgency.
So, on the face of it there doesn't seem to be any particular reason for the urgency to dump the whole rental portfolio into the market in a matter of weeks for a snap sale. Perhaps EMAAR knows something we don't?
EMAAR press release
The speed and timing at which EMAAR wants to get rid of its stock of rental properties has obviously raised eyebrows. One can only speculate at the reasons for the almost unbelievable urgency and EMAAR's insistence that everything must go one way or another within a few short weeks. With most of the properties having leases of several months remaining, there seems no obvious reason why a more carefully planned sale could not be phased in at the point each lease is due for renewal.
EMAAR's PR states that with the freehold laws, people prefer to buy rather than rent. But the reaction of tenants in the Greens, and the tiny number who're actually considering buying, suggests otherwise. It seems disingenuous for EMAAR to suggest that their decision to sell is driven by the wishes of tenants, when it's virtually impossible to find a tenant who welcomes the EMAAR decision and hardly any tenants seem to be taking up EMAAR's offer.
Why the desperation to sell now rather than in a few months time? Many market pundits have viewed the oversupply of middle and high-end property in Dubai that will emerge in 2007 as a possible turning point for prices, but any declines are likely to be drawn out affairs, so that alone does not seem to explain the sense of urgency.
So, on the face of it there doesn't seem to be any particular reason for the urgency to dump the whole rental portfolio into the market in a matter of weeks for a snap sale. Perhaps EMAAR knows something we don't?
Wednesday, February 21, 2007
Initial meeting with EMAAR representatives
We were unable to meet with the managing director of EMAAR today and met with a representative "Jivan D'mello" and Hampton's representative Wahida karama.
Intially they were not willing to compromise on any topic - except that there is a possibility of extending the deadline (but even that they were unable to confirm by how much).
We stressed all our points as follows:
- Extension of time is a must FOR ALL and not on one to one basis. They must revert asap as people are already are chasing for update and must clarify way forward.
Their response was that they cannot confirm anything until they discuss with management but would confirm by tonight - they have since called us and said one week extension confirmed. We have stressed that this is not sufficient and minimum of 2weeks should be considered.
Wahida the Hampton's representative has agreed that she will discuss with management and revert to us by tomorrow if management have accepted 2 weeks extension.
- EMAAR should clarify the law to those tenants who will be faced with new landlords - we suggested that they contact the rent committee in the municipality on behalf of the tenants (since it would cost us 2000 dhs to file a claim) and then issue statement addressing the several scenarios possible - i.e. tenancy expires in one month, tenancy expires in 1year, landlord wants to rent what maximum increase can he impose, landlord wants to move in what increase can he impose etc.
They have responded that they will not state anything on behalf of the municipality as the law might change(!) our response was that they should at least clarify what the law is currently. They have agreed that they will contact the rent committee and circulate if they get a WRITTEN response from them - otherwise they will not state anything formally.
- EMAAR explained that by default our contracts will be renewed by another year - the law states that tenants must be given 12months notice if contract is not to be renewed hence we will get automatic renewal. They will not state this in writing since they don't have it in writing from rent committee. We have requested that they clarify on our behalf from rent committee. As we all know, the law in Dubai is sometime vague in places. It is obviously rather hard for EMAAR to claim tenants won't face huge cost increases or rapid eviction while on the other hand stating that they won't put to us in writing what they believe the law is. How can they be sure tenants will be protected from rapid eviction if they cannot actually confirm the law in writing?
We have pushed them to include a clause in the tenancy agreements which obliges the new landlords to renew tenancy for another year even if they believe that the law states that he has to anyway. They said they will discuss internally and let us know. From a logical standpoint, if they genuinely believe that the law does provide that the landlord renew tenancy for at least another year, then they should have no hesitation explicitly adding this to tenancy contracts for tenants prior to selling the properties, which would safeguard the tenants against a change in the law or some other interpretation of the law to what EMAAR claims to understand. This alone would greatly assist tenants, as well as ensuring that Dubai's vital steps to reduce inflation are kept on track, something that will not happen if the rent cap laws can be easily bypassed. Reducing inflation is critical - some surveys suggest the cost of living in Dubai is increasing by 28% per year, something that will destroy Dubai's competitive business position if tough measures are not taken and enforced. The future prosperity of Dubai should not be sacrificed for short term gain - it is vital that the economy is brought under control and that companies can make long term investments here knowing that the cost base is stable. At present, the biggest deterrent to companies is not just the high level of costs, but the lack of clarity in what costs might rise to this year or next.
- We have requested that they offer tenants who move (after 12months given the above) they offer further assistance e.g. waiving the estate agency commission - they agreed
- We have requested that they contact DIC re disconnection penalities which applies to TV/internet/phone. They have refused saying that this was not their concern
We strongly feel that they can come to some agreement with DIC re the above. If even 100 tenants move from one block to the next and need to reconnect with DIC surely there is a way to come to an agreement so tenants don't have to pay disconnection fees and then reconnection fees!! These are perhaps the least of the expenses but none the less important.
- We have discussed that they should offer those who buy either 20% discount or deduct their total paid rent. They have not agreed to any of these suggestions but will discuss.
In summary all we have received from them is the following:
- extension of deadline by 1 week with possibility of another week
- Contact Rent committee on our behalf and IF THEY RECEIVE ANYTHING IN WRITING they will forward to tenants
- Discuss with management any other concessions for Tenants who wont buy
- Discuss with management further reductions on price to those interest to buy - either 20% discount or deduction of rent
- To arrange another meeting next week to follow up
- To circulate any concessions etc to tenants once above meeting takes place
We understand that some tenants are obviously keen to get a running commentary of efforts, but given time and other constraints this is not necessarily possible. However we are doing our best to post information as and when we have it to keep fellow Greens tenants up to date. We hope that further meetings will take place and that we will get information back and some progress on the points raised above.
Intially they were not willing to compromise on any topic - except that there is a possibility of extending the deadline (but even that they were unable to confirm by how much).
We stressed all our points as follows:
- Extension of time is a must FOR ALL and not on one to one basis. They must revert asap as people are already are chasing for update and must clarify way forward.
Their response was that they cannot confirm anything until they discuss with management but would confirm by tonight - they have since called us and said one week extension confirmed. We have stressed that this is not sufficient and minimum of 2weeks should be considered.
Wahida the Hampton's representative has agreed that she will discuss with management and revert to us by tomorrow if management have accepted 2 weeks extension.
- EMAAR should clarify the law to those tenants who will be faced with new landlords - we suggested that they contact the rent committee in the municipality on behalf of the tenants (since it would cost us 2000 dhs to file a claim) and then issue statement addressing the several scenarios possible - i.e. tenancy expires in one month, tenancy expires in 1year, landlord wants to rent what maximum increase can he impose, landlord wants to move in what increase can he impose etc.
They have responded that they will not state anything on behalf of the municipality as the law might change(!) our response was that they should at least clarify what the law is currently. They have agreed that they will contact the rent committee and circulate if they get a WRITTEN response from them - otherwise they will not state anything formally.
- EMAAR explained that by default our contracts will be renewed by another year - the law states that tenants must be given 12months notice if contract is not to be renewed hence we will get automatic renewal. They will not state this in writing since they don't have it in writing from rent committee. We have requested that they clarify on our behalf from rent committee. As we all know, the law in Dubai is sometime vague in places. It is obviously rather hard for EMAAR to claim tenants won't face huge cost increases or rapid eviction while on the other hand stating that they won't put to us in writing what they believe the law is. How can they be sure tenants will be protected from rapid eviction if they cannot actually confirm the law in writing?
We have pushed them to include a clause in the tenancy agreements which obliges the new landlords to renew tenancy for another year even if they believe that the law states that he has to anyway. They said they will discuss internally and let us know. From a logical standpoint, if they genuinely believe that the law does provide that the landlord renew tenancy for at least another year, then they should have no hesitation explicitly adding this to tenancy contracts for tenants prior to selling the properties, which would safeguard the tenants against a change in the law or some other interpretation of the law to what EMAAR claims to understand. This alone would greatly assist tenants, as well as ensuring that Dubai's vital steps to reduce inflation are kept on track, something that will not happen if the rent cap laws can be easily bypassed. Reducing inflation is critical - some surveys suggest the cost of living in Dubai is increasing by 28% per year, something that will destroy Dubai's competitive business position if tough measures are not taken and enforced. The future prosperity of Dubai should not be sacrificed for short term gain - it is vital that the economy is brought under control and that companies can make long term investments here knowing that the cost base is stable. At present, the biggest deterrent to companies is not just the high level of costs, but the lack of clarity in what costs might rise to this year or next.
- We have requested that they offer tenants who move (after 12months given the above) they offer further assistance e.g. waiving the estate agency commission - they agreed
- We have requested that they contact DIC re disconnection penalities which applies to TV/internet/phone. They have refused saying that this was not their concern
We strongly feel that they can come to some agreement with DIC re the above. If even 100 tenants move from one block to the next and need to reconnect with DIC surely there is a way to come to an agreement so tenants don't have to pay disconnection fees and then reconnection fees!! These are perhaps the least of the expenses but none the less important.
- We have discussed that they should offer those who buy either 20% discount or deduct their total paid rent. They have not agreed to any of these suggestions but will discuss.
In summary all we have received from them is the following:
- extension of deadline by 1 week with possibility of another week
- Contact Rent committee on our behalf and IF THEY RECEIVE ANYTHING IN WRITING they will forward to tenants
- Discuss with management any other concessions for Tenants who wont buy
- Discuss with management further reductions on price to those interest to buy - either 20% discount or deduction of rent
- To arrange another meeting next week to follow up
- To circulate any concessions etc to tenants once above meeting takes place
We understand that some tenants are obviously keen to get a running commentary of efforts, but given time and other constraints this is not necessarily possible. However we are doing our best to post information as and when we have it to keep fellow Greens tenants up to date. We hope that further meetings will take place and that we will get information back and some progress on the points raised above.
Monday, February 19, 2007
Response from EMAAR
The Homeless Tenants group has received contact from EMAAR asking for a meeting to discuss tenants concerns. It's not clear at this stage whether the intention is to offer any material concessions that will help the dire effect that this sale will have on many tenants, or just to further explain EMAAR's position and reasoning. We will of course keep you informed when we have any news.
Thursday, February 15, 2007
No meeting tonight
It was agreed at the last tenants meeting that the group should meet again today, Thursday 15th February, to discuss progress.
At present there is no progress to report. Emaar's PR bods have been busy telling the newspapers that they are offering concessions and sweeteners, but as anyone who has seen the newspapers will realise, they are offering nothing more than was originally suggested and nothing that eases the plight of the affected tenants.
We still hope that the letters to prominent and influential local figures will yield results. But as yet, there appears to be no change in Emaar's position that it wants to sell all the affected apartments by the end of February at current market prices.
It appears too that there are also plans to sell off other Emaar leased properties in the Lakes in a similar fashion once the Greens tenants' homes have been dispatched. So this story may well have implications for far more people than it currently appears to affect.
We will post more news when available.
At present there is no progress to report. Emaar's PR bods have been busy telling the newspapers that they are offering concessions and sweeteners, but as anyone who has seen the newspapers will realise, they are offering nothing more than was originally suggested and nothing that eases the plight of the affected tenants.
We still hope that the letters to prominent and influential local figures will yield results. But as yet, there appears to be no change in Emaar's position that it wants to sell all the affected apartments by the end of February at current market prices.
It appears too that there are also plans to sell off other Emaar leased properties in the Lakes in a similar fashion once the Greens tenants' homes have been dispatched. So this story may well have implications for far more people than it currently appears to affect.
We will post more news when available.
Wednesday, February 14, 2007
Background on the newspaper articles
Some tenants have contacted us commenting that the newspaper articles do not represent their concerns adequately and only focus on the ridiculous two week timeframe offered by Emaar.
Rest assured that the focus of our comments and representations to the media have been to highlight the plight of the majority of tenants who cannot afford to buy. But we cannot write the articles for the newspapers.
The press in this country has to operate within certain conditions as we all know. Emaar is a rich, powerful entity with close links to the government. It is clear from talking to journalists that their editors are not happy to highlight the problems tenants face and the massive rent increases when this would put them in conflict with a powerful vested interest in the country.
The tenants letters have been sent with our representations. We will try to publish these shortly here, so that everyone can see the content. Please tell your friends to visit this site if they wish to receive the tenants point of view, as the newspapers' hands are very much tied as to what they can report, so you're likely to just get EMAAR's lame public relations shill.
We must all exist that within the framework of the laws of the land. Events such as this highlight the differences between how things work in many of our home countries and how they work in Dubai. We must all make our own decisions as to whether a place that operates like this is a good long term place to live; whether it is a safe place to invest and a safe place to do business, when powerful organizations can make snap decisions that turn our lives upside down, and where the press tread carefully to avoid upsetting them.
Many of us still feel that we have a future in Dubai, but for many this will convince them that the place no longer offers the better life that they hoped for. In the end, we can only voice our concerns, but we cannot force change. Ultimately we are all here by choice and we are all free to leave. Increasingly many will decide or be forced to. Emaar can exercise control over the local papers, but it cannot exert such influence over the press abroad, and it cannot prevent those who leave from passing on their experiences of how things work in Dubai to the people back home.
Much as these actions by Emaar at present only affect tenants renting, they highlight the differences between what is considered reasonable in Dubai and what is considered reasonable in many other advanced nations. Such a contrast is something that will undoubtedly be of concern to those who might be considering investment or property purchases, as well as those choosing to move to Dubai with the intention to rent.
Rest assured that the focus of our comments and representations to the media have been to highlight the plight of the majority of tenants who cannot afford to buy. But we cannot write the articles for the newspapers.
The press in this country has to operate within certain conditions as we all know. Emaar is a rich, powerful entity with close links to the government. It is clear from talking to journalists that their editors are not happy to highlight the problems tenants face and the massive rent increases when this would put them in conflict with a powerful vested interest in the country.
The tenants letters have been sent with our representations. We will try to publish these shortly here, so that everyone can see the content. Please tell your friends to visit this site if they wish to receive the tenants point of view, as the newspapers' hands are very much tied as to what they can report, so you're likely to just get EMAAR's lame public relations shill.
We must all exist that within the framework of the laws of the land. Events such as this highlight the differences between how things work in many of our home countries and how they work in Dubai. We must all make our own decisions as to whether a place that operates like this is a good long term place to live; whether it is a safe place to invest and a safe place to do business, when powerful organizations can make snap decisions that turn our lives upside down, and where the press tread carefully to avoid upsetting them.
Many of us still feel that we have a future in Dubai, but for many this will convince them that the place no longer offers the better life that they hoped for. In the end, we can only voice our concerns, but we cannot force change. Ultimately we are all here by choice and we are all free to leave. Increasingly many will decide or be forced to. Emaar can exercise control over the local papers, but it cannot exert such influence over the press abroad, and it cannot prevent those who leave from passing on their experiences of how things work in Dubai to the people back home.
Much as these actions by Emaar at present only affect tenants renting, they highlight the differences between what is considered reasonable in Dubai and what is considered reasonable in many other advanced nations. Such a contrast is something that will undoubtedly be of concern to those who might be considering investment or property purchases, as well as those choosing to move to Dubai with the intention to rent.
Tuesday, February 13, 2007
Emirates Today and Adrian Murphy's sorry maths skills
Greens residents were probably amused to read the Emirates Today article from a journalist who among other things clearly has trouble counting without using his fingers.
Adrian Murphy's article laughably suggested that the meeting had just 60 tenants, while 7days got it about right with 200.
In tomorrow's Emirates Today, perhaps Adrian Murphy will explain how a meeting of 60 tenants contributed over 100 signatures to accompany the letters being sent on the tenants behalf?
Given his previous work, it seems pretty clear he's probably just following editorial orders so let's not give too much of a hard time.
Adrian Murphy's article laughably suggested that the meeting had just 60 tenants, while 7days got it about right with 200.
In tomorrow's Emirates Today, perhaps Adrian Murphy will explain how a meeting of 60 tenants contributed over 100 signatures to accompany the letters being sent on the tenants behalf?
Given his previous work, it seems pretty clear he's probably just following editorial orders so let's not give too much of a hard time.
The meeting at the Greens
Thank you to everyone who attended the 'Meet your neighbours' get together at Al Ghozlan a few hours ago. We appreciated the suggestions given and have tried to ensure that we cover the interests of all residents, both those that wish to remain as tenants and those that would consider the offer to buy.
Those we spoke to who had experience of the Rent Committee and the government of Dubai made clear to us that the leaders of this Emirate genuinely care deeply about the lives of the expatriates who come here to live and work. One gentleman had taken matters to the Rent Committee on several occasions and received judgement in his favour every time. The measures taken by the government, under the leadership of His Highness Shaikh Mohammad Bin Rashid Al Makhtoum, Vice President, Prime Minister of the UAE and Ruler of Dubai, are making a real and significant contribution to protecting tenants and ensuring the continued competitiveness of the Dubai economy. They prove that our leaders do care and have taken active measures to address the problems faced by Dubai residents.
We hope that our suggestions will be seen as reasonable and constructive and that given time, an outcome will be achieved which is in the interests of all the parties involved.
Thanks again for your support. We will keep you informed of any developments.
Those we spoke to who had experience of the Rent Committee and the government of Dubai made clear to us that the leaders of this Emirate genuinely care deeply about the lives of the expatriates who come here to live and work. One gentleman had taken matters to the Rent Committee on several occasions and received judgement in his favour every time. The measures taken by the government, under the leadership of His Highness Shaikh Mohammad Bin Rashid Al Makhtoum, Vice President, Prime Minister of the UAE and Ruler of Dubai, are making a real and significant contribution to protecting tenants and ensuring the continued competitiveness of the Dubai economy. They prove that our leaders do care and have taken active measures to address the problems faced by Dubai residents.
We hope that our suggestions will be seen as reasonable and constructive and that given time, an outcome will be achieved which is in the interests of all the parties involved.
Thanks again for your support. We will keep you informed of any developments.
Sunday, February 11, 2007
EMAAR proposes to sell your home – Take action before its too late!
An open letter to the affected residents of the Greens, from a group of fellow residents
No mercy from Emaar
It appears Emaar is bent on a quick sale, with no exceptions for any reason.
One of the tenants affected by Emaar's decision to sell Greens apartments wrote to Hamptons to request more time to deal with the issue. He is returning to the UK for 10 days to attend his grandfather's funeral and spend some time with his father who is awaiting results from doctors as to whether his lymphoma has returned.
Mahmoud AL Omari from Hamptons response:
I am sorry to hear that from you, I regret to inform you that Emaar giving us a period of 2 weeks only, then it will be sold on the market outside, we are only agents for Emaar, and we can't keep this apartment on hold for a long time, so please if you are interested in buying it please contact me ASAP.
One of the tenants affected by Emaar's decision to sell Greens apartments wrote to Hamptons to request more time to deal with the issue. He is returning to the UK for 10 days to attend his grandfather's funeral and spend some time with his father who is awaiting results from doctors as to whether his lymphoma has returned.
Mahmoud AL Omari from Hamptons response:
I am sorry to hear that from you, I regret to inform you that Emaar giving us a period of 2 weeks only, then it will be sold on the market outside, we are only agents for Emaar, and we can't keep this apartment on hold for a long time, so please if you are interested in buying it please contact me ASAP.
Saturday, February 10, 2007
Homeless Tenants
On 8th February 2007, Hamptons (who recently took over as leasing agents for several Emaar rented blocks in the Greens) sent a letter to tenants, the content of which was as follows:
Dear [name]
Subject: Purchase Opportunity of your leased home!
I trust you are well!
Thank you for your residency within [name of block and apartment number] over the last few months/years - I hope you have had an enjoyable tenancy.
Recognizing your support for Emaar over the past and as a very valued resident, we are delighted to announce that Emaar is giving you the first option to purchase the unit in response to several requests from our tenants to buy their homes. As a resident of The Greens, we would like you to be among the first to be informed of Emaar's decision to sell a certain number of residential units, one of which is currently leased to you.
The unit [apartment block and unit number] is offered at [price]
We are aware how important this decision is for you, and in order to assist you in making your dream come true in purchasing your dream house, Hamptons has arranged pre-approved mortgages through Amlak. In order to purchase the property by the present tenant, Amlak is working on a proposal and we can provide the same within three to four days.
Amlak is also offering 97% Mortgage at 8.25%, with an initial AED 5,000 as application fee, and 1% processing fee of the finance amount maximum at AED 20,000. (More details attached herewith) In addition to this offer Amlak is working on a proposal that will be available within the next few days.
As Emaar have instructed us to ensure sales are completed swiftly, we will require your feedback within the next two weeks of your decision. We have been requested by Emaar to advise you that in the event that you choose not to purchase the property, it will be offered for sale on the open market, subject of course to your ongoing tenancy agreement, which will be transferred to the new owner.
In addition, the service fees of AED 7.85/sq.ft should be fully paid in advance for 2007 for the period from 1 march 2007 to 31 December 2007 as per Emaar sales standard procedure.
Should you wish to discuss the matter further or obtain more clarifications, please do not hesitate to contact me on the numbers mentioned below.
Yours truly,
Mahmoud A. Al Omari
Leasing Executive
Some initial discussions between a group of affected residents suggest that few if any can afford to buy (or they would have bought on the open market already), and all are concerned about transfer of their leases to private landlords. None regard this as a welcome 'opportunity'. Instead, residents who cannot or do not buy will be forced our of their apartments by the new owners, or forced to accept rent rises of 50-60%.
The affected residents were not consulted about the proposed sale; the first notification all received was a hand delivered letter informing them to confirm within TWO WEEKS that they would buy their properties, or their properties would be sold off on the open market.
Just a few weeks back, the property leasing agents had written to residents to inform them that the proposed 15% rent increases for 2007 would not take place due to the Dubai government's rent cap law. It seems this may have some connection to Emaar's decision to opt for a quick sale of the affected leased properties. The peace of mind that the 0% rent increase gave to residents has been shortlived, as they are now faced with cost increases of 50-60% instead of the original 15%. Was this really what the Dubai government, which holds 30% of Emaar, intended when it issued the rent cap law to protect tenants and ensure that the cost base in Dubai remains competitive?
The residents trust that Emaar will appreciate and understand the hardship and suffering that its hasty decision to sell causes, and will re-evalute its decision in the context of the widely applauded desire of the Dubai government to protect tenants from massive cost increases and stabilize the cost of living in the Emirate.
Dear [name]
Subject: Purchase Opportunity of your leased home!
I trust you are well!
Thank you for your residency within [name of block and apartment number] over the last few months/years - I hope you have had an enjoyable tenancy.
Recognizing your support for Emaar over the past and as a very valued resident, we are delighted to announce that Emaar is giving you the first option to purchase the unit in response to several requests from our tenants to buy their homes. As a resident of The Greens, we would like you to be among the first to be informed of Emaar's decision to sell a certain number of residential units, one of which is currently leased to you.
The unit [apartment block and unit number] is offered at [price]
We are aware how important this decision is for you, and in order to assist you in making your dream come true in purchasing your dream house, Hamptons has arranged pre-approved mortgages through Amlak. In order to purchase the property by the present tenant, Amlak is working on a proposal and we can provide the same within three to four days.
Amlak is also offering 97% Mortgage at 8.25%, with an initial AED 5,000 as application fee, and 1% processing fee of the finance amount maximum at AED 20,000. (More details attached herewith) In addition to this offer Amlak is working on a proposal that will be available within the next few days.
As Emaar have instructed us to ensure sales are completed swiftly, we will require your feedback within the next two weeks of your decision. We have been requested by Emaar to advise you that in the event that you choose not to purchase the property, it will be offered for sale on the open market, subject of course to your ongoing tenancy agreement, which will be transferred to the new owner.
In addition, the service fees of AED 7.85/sq.ft should be fully paid in advance for 2007 for the period from 1 march 2007 to 31 December 2007 as per Emaar sales standard procedure.
Should you wish to discuss the matter further or obtain more clarifications, please do not hesitate to contact me on the numbers mentioned below.
Yours truly,
Mahmoud A. Al Omari
Leasing Executive
Some initial discussions between a group of affected residents suggest that few if any can afford to buy (or they would have bought on the open market already), and all are concerned about transfer of their leases to private landlords. None regard this as a welcome 'opportunity'. Instead, residents who cannot or do not buy will be forced our of their apartments by the new owners, or forced to accept rent rises of 50-60%.
The affected residents were not consulted about the proposed sale; the first notification all received was a hand delivered letter informing them to confirm within TWO WEEKS that they would buy their properties, or their properties would be sold off on the open market.
Just a few weeks back, the property leasing agents had written to residents to inform them that the proposed 15% rent increases for 2007 would not take place due to the Dubai government's rent cap law. It seems this may have some connection to Emaar's decision to opt for a quick sale of the affected leased properties. The peace of mind that the 0% rent increase gave to residents has been shortlived, as they are now faced with cost increases of 50-60% instead of the original 15%. Was this really what the Dubai government, which holds 30% of Emaar, intended when it issued the rent cap law to protect tenants and ensure that the cost base in Dubai remains competitive?
The residents trust that Emaar will appreciate and understand the hardship and suffering that its hasty decision to sell causes, and will re-evalute its decision in the context of the widely applauded desire of the Dubai government to protect tenants from massive cost increases and stabilize the cost of living in the Emirate.
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