Buyers of property in the delayed Hydra Village, a Dh2 billion (US$545m) housing project being developed by Hydra Properties on the outskirts of Abu Dhabi, are considering legal action against the company in an effort to either recover the money they have invested so far or have their contracts rewritten. If the case goes to court, it would be the first major property dispute to be heard in Abu Dhabi where, unlike Dubai, formal property regulations are yet to be established.
The long-running battle between the Hydra Investors Committee, a group of about 350 members, took a turn for the worse after buyers rejected a revised contract offered by Hydra earlier this month. About 60 per cent of those who attended a meeting held by the committee on Thursday night backed legal action to get their money back, while 40 per cent opted for a re-negotiation of contract terms, changes that might also require court pressure. The meeting was attended by more than 100 members.
"We have passed on litigation options to the group and are coordinating with a law firm," said Graeme Perry, the deputy chairman of the Hydra Investors Committee. "The members will now make their decision on which path to take. We have had communications with them (Hydra) and no significant progress has been made, so therefore we have to take the litigation course, both in terms of getting our money back or renegotiating the contract."
Hydra Properties, which has also sold properties in unbuilt towers on Reem Island, was unavailable for comment when contacted yesterday. Hydra Village was launched in 2006 and was originally due to be completed this year. At a press conference at the beginning of June, The Royal Group, which owns Hydra, said it would now be delivered in phases to the end of 2011. "We are going to complete our project," Ali bin Sulayem, a member of the board at Royal Group, said at the time. "There is no reason to fear that we are not doing this."
While investors were comforted by the assurance, they are refusing to sign the revised contract, which they feel contains flaws such as leaving them open to further price increases if more modifications are made to their homes and removing the commitment by the developer to complete construction. Investors are also unhappy with a new payment plan, which gives those who have so far paid more than 50 per cent a break until the middle of next year. Mr Perry said that payments should instead be linked to construction progress.
"If we had confidence that they will build the villas, we'd probably sign the contracts," he said. Hydra Village was sold to investors with promises of a five-star hotel, swimming pools, fountains and significant green areas. But none of these features exist in the revised masterplan. firstname.lastname@example.org