The Dubai property minefield

What can I say, it all seemed like a really good idea at the time. You have some savings lying around from previous investments and look for something good to put it towards for your future. Sadly what was once many peoples dream, has turned into a living nightmare - myself included.

So, you find that ideal investment, with the nice shiny buildings, wonderful landscaping and good surrounding attractions, with reasonable payment plans - all is hunky dory, so you sign up, put your deposits down, take out your finance and wait for this wonderful development to be completed. But you wait and you wait, oh and you wait some more. A couple of years pass and it's going ok, construction is slow, better than others which are still very much a hole in the ground or never even got to that stage.

Over a couple of years circumstances change, many have lost their jobs or been forced to take a pay cut just to stay in a job, you inform your bank and developer only to find zero sympathy, no reduction in costs or extended payment plans, just a 'give us the money' attitude. What do you do then? Or when your mortgage payments have been put on-hold until handover of the property, but then you're expected to pay a huge lump sum of interest, plus maintenance fees, plus, plus, plus.

So you paw back through your contract and viola! There are clauses to help you get out of this mess, or so you thought! Because you see these SPA and add on contracts aren't even worth the paper they're written on. YOU the investor basically has no rights at all. The beyond ridiculous excuses that are given to stop you getting a money lender to implement a termination clause, which clearly states - that if a development is a year past the anticipated completion date, that you have the right to terminate - will be along the lines of 'there is no completion date in the contract'. erm really? What's that printed in black and white on page three then?

So what are your choices? Take the bank and/or the developer to arbitration or court, which costs an awful lot of money and if you lose, you not only lose that money but end up having to pay all costs as well. Try and sell? The property market, contrary to the belief of many that it's picking up, is still dead as the dodo, unless your development is nearing handover, but then the chances of getting anywhere near what you paid for it are slim. Negotiate a reduction in price and restructure the payment plans? Possible, but many are reluctant to do this. Or do a runner, which means a case would be brought against you and if you ever return to the country or get diverted for some reason, go to jail, go directly to jail, do not pass go or collect 200 Dirhams!

There are literally thousands of people in this situation, with hundreds going down the arbitration/court route, but are they winning? Are there better rights for investors? Not really. It's another of Dubai's failings, where it tries to operate in the real world, but just doesn't quite hit the mark. Putting people in prison for not being able to pay is just silly, how can they earn money to pay back what they owe, if they're behind bars? Where's the negotiation? Surely getting money back, at an albeit slower rate is better than people hopping on the nearest plane and never getting it back at all?!

But we shall have to wait and see what happens. I have to decide which route I want to take - doing a runner is not even in my head at this point, as I firmly believe that where there's a will, there's a way.

Will keep updating this one......