DUBAI // The developer Nakheel is owed Dh15 million in unpaid service fees and will not maintain facilities in an upmarket residential development on Palm Jumeirah unless the owners pay up.
"How can we be expected to pay our service providers and properly maintain facilities when owners are failing to honour their payments?" Nakheel said yesterday.
The fees have been approved by the Real Estate Regulatory Agency and Nakheel will pursue defaulters to ensure timely payment. The developer is confident the issue will be resolved, a spokeswoman said.
All six swimming pools in the Marina Residence towers were drained 10 days ago and residents say they have been told gyms and lifts will be closed if outstanding balances are not settled.
Several owners have disputed the fees, and others have bills to show they have made payments.
Tenants who have paid rents of up to Dh160,000 for their apartments say they are suffering unfairly because apartment owners have not paid the maintenance fees.
Nakheel advised them to check if landlords had paid service charges before signing any rental agreements. "Only after doing this can they make an informed decision on whether to rent that property," the spokeswoman said.
Before yesterday's statement, Nakheel had maintained that the swimming pools were closed for maintenance and not because of unpaid service fees.
The developer said non-payment led to insufficient funds in the Owners' Association account to pay the pool contractor, who had left the site.
"Without receiving service fees, Marina Residence's service providers cannot be paid for their work," said the spokeswoman. She insisted Nakheel had not posted notices warning of cuts to other services such as lifts or rubbish collection.
"We have had no option but to drain the pools. Leaving them as they were, with no cleaning or maintenance, would have posed a health risk."
But residents said safety had already been compromised. Paul McCarthy, 10, bruised his face and injured his eye when he tripped over the red and white tape cordoning off an empty pool. His family has decided not to renew their lease.
"My son got a black eye, he cut his face and it was swollen," said Frances McCarthy, an Irish tenant. "We're lucky he didn't break his nose. It's dangerous for children since the tape is running all over. It's a health and safety concern. My landlord didn't even know he had payments due and is happy to pay, but Nakheel should not punish tenants."
On Thursday evening, about 70 owners and tenants met to sign a petition urging the regulator to help to register the Owners' Association, remove Nakheel as manager and find a replacement.
The group also asked that Nakheel disclose information to the association including audited financial statements, copies of contracts with service providers and surveys and drawings of common areas.
One tenant, Bridgette Whisenand, has a document to prove that her landlord has a Dh27,000 credit with Nakheel since he paid more than the required amount.
"It's all messed up," said the US expatriate. "Why should they cut off services? The pool has not been fenced off so it's dangerous."
Several owners said they had asked for details of the charges. Others said they had not received any communication from Nakheel.
Punishing residents because service fees were not paid was not legal, said Shahram Safai, head of real estate at Afridi and Angell legal consultants.
"Self-help remedies such as preventing people from using the pool or gyms in this jurisdiction is not legal," he said.
Under the jointly owned property law, defaulting owners can be charged 12 per cent interest and legal action can be taken against them.
"However, if the owners are not paying and there is not enough money to pay contractors then as a financial assessment, the developers can say they can't maintain the pool. But you would have to see the accounts. It's a complicated issue," Mr Safai said.
Conflict over service fees has frequently cropped up. Last December, residents of Shoreline Apartments, also on the Palm Jumeirah, were barred from accessing the beach and other communal facilities. The issue has yet to be resolved.