Hidden Costs Associated With Purchase Finally Getting Press Coverage

[wayneis]

Been discussed in separate threads thought it might be worthwhile starting a thread to follow up on this as it is getting some press in the Local papers

From Yesterdays Gulf News

Real Estate Property


Published: 21/02/2007 12:00 AM (UAE)

Gulf News archive
Some residents say they have been charged more than the 1% freehold registration fee.



Freehold buyers face hidden costs
By Robert Ditcham, Staff Reporter

Dubai: Buyers in Dubai’s property market say they face hidden costs when registering their apartments and villas.

Those who have invested in freehold property and want to register the title currently have to pay Dubai Land Department a fee of 1 per cent of the property value (1.5 per cent under last year’s fee structure).

But some residents say they have been charged a separate fee on top of this amount by developers or owners, which can total several thousand dirhams.

“I knew about having to pay the Land Department fees, but then I found out that I would have to pay extra costs. It’s unjustifiable that the developer is charging me or the building owner an extra amount for a relatively simple process,” said a resident in Nakheel’s International City development.


The issue comes to light as the Land Department prepares to register tens of thousands of apartments in buyers’ names, a process which officially kicked off last week.

David Nicholson, general counsel at Nakheel, said the issue of extra costs applies to cases where Nakheel has sold an entire building to a building purchaser.

“If the building purchaser has sold residential units in that building off plan, the sales contract for the building specifies that anyone who buys a unit must register their purchase with Nakheel and pay an administration fee of 2 per cent of the unit value,” he said.

Nicholson said the “administration fee” covers the issue of the unit contracts by Nakheel, internal registration to protect against duplication of sales and to properly record the ownership so buyers are eligible for a residence visa, if applicable.

He added that the fee also has a revenue component for Nakheel.

“It helps to defray the risk that Nakheel accepts under the registration process. By being in control of the contractual process Nakheel also ensures conformity of contract conditions which is vital in a master planned community,” he said.

A spokesperson at Dubai-based developer Emaar, said the company does not charge for the first registration of the title deed.

“Emaar collects the fees required to be paid by the customer to the Land Department and adds the fee to be paid by Emaar. Together we submit it to the Land Department. No extra charge is levied by Emaar,” the spokesperson said.

From Todays Gulf news more....

Published: 22/02/2007 12:00 AM (UAE)

Dubai to investigate service charges for freehold units
By Robert Ditcham, Staff Reporter



Dubai: Dubai Land Department will investigate service charges tagged onto property registration fees for freehold units.

Gulf News reported yesterday buyers face hidden costs when registering homes, either charged directly by the developer or passed down by a middle man, in addition to the 1 per cent fee levied by Dubai Land Department.

Some residents say "lack of clarity" over charges is undermining confidence in Dubai's property market.

"We're trying to calculate how many extra costs there are and assess the impact they are having on the property sector," said Mohammad Sultan Thani, director of development and marketing in the department.




A resident at Nakheel's International City said he paid the department's fee, as well as a 2 per cent registration administration charge to Nakheel and a further Dh2,000 service fee, which he claims was passed on to him by the building owner (an organisation that buys an entire building from a developer and sells individual units to end users).

Homeowner Haana Kurmoo said Nakheel should have charged more for the flats instead of adding costs at a later stage. "At least it would be a fairer and more honest practice."

If homeowners already holding title deeds wish to transfer their property to another party, they must produce a "no objection certificate" supplied by the developer. Nakheel says it charges Dh1,000 for this service, while Emaar Properties levies a Dh5,000 fee.

"I think Dh500 would be more appropriate for issuing a letter and registering new owners' details," said Natalie Moore.

"I am disappointed the developers are getting away with charging unreasonable amounts for what is clearly just an administration task."

Residents say developers must clarify their charges and give notice of upcoming fees well before keys are handed over.

Nakheel said in cases where a purchaser has sold residential units in a building, anyone who buys a unit must register their purchase with Nakheel and pay a 2 per cent "administration fee".

[Convivencia]

Thanks for posting this wayneis, apart from Nakheel any ideas who else we can \ should complain to? Nakheel will obviously be feeling some heat from this (wether they GAF is another question).

Uncle Maktoum can't be happy that its putting a bad light on Dubai property investment.

[wayneis]

Barking up the wrong tree contacting Nakheel or your agent

Try The Dubai Land Department as this is where all the disputed charges are going

Contact numbers

Number Phone :0097142222253

Fax:0097142222251

Email info@dubailand.gov.ae

From the Dubai Government land Web Site

The government of Dubai land department records many of the real estate transactions for a small fee paid by both buyer and seller. The selling procedures are smoothly finished by the transactions section at the customer relations department after an application form is presented and the following restrictions were not present to hinder the process:-

* If the indicated land was considered a restricted grant

* If the buyer or the seller weren’t competent enough to proceed in such transactions.

* If there were legal restrictions that hinder the process such as the land being reserved or is considered restricted land.

The United Arab Emirates law allows the country’s local citizens and those from the GCC countries to freely sell or purchase land in the city of Dubai, as well as giving them the ability to sell any part of the land if new partners were added or removed in a process known as partial selling of the land.

All other nationalities are also allowed to free own properties or lands in restricted areas

Necessary documents:

*
A certificate of the land ownership.
*
The map of the land from the owner.
*
A copy of the passport and nationality card of the buyer.
*
The full address of the buyer

Transaction location:

*
Transactions section at the customer relations department.

Transaction fees:

*
1% from the buyer + an additional 10 Dhs ( knowledge fees).
*
1% from the seller + an additional 10 Dhs ( knowledge fees)
*
100 Dhs to issue the map+ an additional 10 Dhs ( knowledge fees).

[wayneis]

Rang the Dubai Lands Department Direct Number 04- 2030104 spoke to the Person concerned who handles fees.

On Property Signed before 17th December 2006 the Fee payable to The Lands department is 1.5% plus 120 AED Site Fee

Further Update

My Agent today admitted that the charges which were classified as Land Registration ( 1,.5 % plus 1.4 % ) now include the before un mentioned and un audited Real Estate Ageny Admin Charge ( 1.4%)

Don't you just love Dubai !

[wayneis]

Land Department Customer Care <info@dubailand.gov.ae> Mon, Feb 26, 2007

Dear Sir/ Madam,

Thank you for writing to The Government of Dubai Land Department, Government of Dubai Land Department started the new fee structure charging 1% registration fee from 17 December 2006, before that the the registration fee was 1.5%. according to this any contract signed before 17 December 2005 will be charged with the old registration charges which is 1.5%.any other charges is might be part of the contract with you and your developer.

These are the registration charges which land department charges for registration.

FOR MORE DETAILS RELATED TO THE FEE,PLEASE VISIT OUR WEBSITE

Regards

Customer Care



--------------------------------------------------------------------------------
م
تاريخ الإرسال: الاحد 25/02/2007 08:08 ص
إلى: Land Department Customer Care
الموضوع: Land Registration Charges to be paid for Apartment at International City

[laguna33p]

wayneis, thats the same reply i got from them. Looks like it is a standard reply which they probably send out to everyone with the same kind of enquiry, may even be automated!!

[aveshbachav]

I receieved a letter from ARY properties yesterday stating I have to pay the balance amount pending which also includes aanother 2% of land resgistration fees plus 320 dirhams. the biggest shock was that they have slapped me with a 5% service charge. thats like 15,000 dirhams for their service such as manpower, fuel, phone calls (apparently none to me). Instead of compensating their logic is that they lost out in terms of manpower blah blah blah for one year for which I am the cash cow. What can I do about it? I blasted their sales team on the phone they had just vague answers. I wanna know if they have charged all other ARY buyers with such a fess. Note, this fees is to be paid to ARY for their service provide. Like, they had sold the partment without making any profit!! Obviosuly they have made very good profit on apartments and most of the finance came in terms of installments paid by hoem owners. I wanna know if you guys are also in the same situation??? Is there any redressal for such things in Dubai? Cuz Nakheel is Govt owned but not ARY. ARY has also left 1000 buyers of its flats in IC stranded cuz they were promised to get 70% mortgage which would be paid out by itself from rent accrued from the property over the next 15 years. Many pakistanis bought by paying 30% and the company used that money for 30 months and then finally handing them over cancellation letters along with a service charge of 10% of the amount paid. that is 3% of the original apaartment vaalue. So funny?

Help Help!!

[assunta]

Mr. Wayne
I bought my apartment direct from developer (Tameer) Al Dana 2 at CBD in intl. City.
In my contract is not metioned any land charges of 4-5%
but only 5dh.per sqf mantinance fee which will be fix for five years and 1.5% registration Land dept. nothing else....
Is that possible?
Could you clarify about land charge,please?
Thank you

[assunta]

Originally Posted by assunta

Mr. Wayne
I bought my apartment direct from developer (Tameer) Al Dana 2 at CBD in intl. City.
In my contract is not metioned any land charges of 4-5%
but only 5dh.per sqf mantinance fee which will be fix for five years and 1.5% registration Land dept. nothing else....
Is that possible?
Could you clarify about land charge,please?
Thank you

no reply

[wayneis]

Originally Posted by assunta

no reply

Sorry did not see your post fastest way to get a reply is to just send a PM

OK sounds like your contract was a sales agreement not the contract between yourself the building owner and nakheel which is referd to as the Unit Sales Purchase Agreement

Sorry to say this however your sales agreement is not really worth much more than the paper its printed on due to the lack of firm real estate laws. To answer your First Question even though you were quoted a

5dh.per sqf mantinance fee

This will be around 12 AED a sq ft

The Government of Dubai Land Department has set the Land Registration fee at 1.5 % and also now 1% depends on date of Contract.

Please read posts above where the reply from the The Government of Dubai Land Department is explained

Before handing any money offer to your Agent clarify any charges with Nakheel. You will find that many Agents in Dubai are charging an administration fee ( even though this has not been previously spelled out in any sales agreement) it is just another way of extracting money from you.

Once again contact Nakheel to clarify what charges you really should be paying.