Rashmey Seth paid Dh3.2m for two luxury flats and rented them out. Nearly two years on and she still has not received the title deeds.
Dubai property owners still lack deeds
DUBAI // Rashmey Seth paid Dh3.2 million for two luxury flats, furnished them and rented them out. That was nearly two years ago - but she is still not sure she actually owns the properties. Receipts from Nakheel confirm that she paid the state-backed developer in full for a three-bedroom flat on the Palm Jumeirah. Mrs Seth has similar paperwork for a one-bedroom unit in downtown Burj Dubai, purchased last year from Emaar, the Middle East's largest developer. What she has not received from either of the property giants are title deeds - the crucial documents that verify ownership. It is a predicament shared by many, their status as lawful owners in limbo because of the absence of a piece of paper that, after properties are registered with the Dubai Land Department, should be handed to buyers. The issue, says Mrs Seth, makes her wonder whether she has a legal right to sell her flats. She is by no means the only property owner in Dubai worried about not having deeds to the flats she has paid for. Without deeds, it is unclear what would happen if the company they bought their property from went bankrupt. There could also be problems with selling the property on: potential buyers could find it difficult to get a mortgage without formal proof of ownership. In Mrs Seth's case, her dilemma has shaken her confidence in Dubai's freehold property laws, introduced three years ago to give foreigners the right of ownership. "Why am I not getting the comfort that there's a legal structure to support me, that makes me feel sure that I really own my property?" said Mrs Seth, 52, an Indian who has lived and worked in Dubai for 28 years. Her fears are not unfounded. Law Number 7 of 2006 states that until flats are registered with the Land Department, which will then grant title deeds, buyers lack the rights of fully fledged owners. In an email statement, Emaar did not specify how many of its property holders had not had units registered or lacked deeds. Nakheel said the "majority of ... purchasers who have taken handover have received their title deeds". Given the size of Nakheel's development portfolio, that could still mean thousands have not received them. There are indications that a substantial number of buyers across Dubai lack deeds. After posting a query on Crest of Dubai, a website used by residents of the Palm Jumeirah, The National received nearly two dozen complaints. And Michael Aldendorff, a 39-year-old South African who is one of the leaders of an informal homeowners' group in the Discovery Gardens development, reckoned that most buyers in the 26,000-apartment community lacked deeds. "I don't think that many people here have them at all," he said. That, however, has not stopped developers from asking purchasers to pay to get their deeds. Mrs Seth said she was asked to hand over about Dh55,000 for flat-registration fees to Emaar and Nakheel. She said she had little choice but to comply; according to Land Department regulations, a buyer cannot register a property without the developer's consent. "They take these undated cheques from you, and they bank it at their will, so what can you do about it?" she said of Emaar and Nakheel. "If there is a delay or something from the Land Department in getting the registration, or the documentation is not ready from the developer's side, then why are they taking my money?" Sabri Pozem, who owns a one-bedroom flat in Discovery Gardens, in which he has a tenant, wonders whether the authorities - or anyone apart from himself - have records of his purchase. Mr Pozem, a 29-year-old from Turkey, is one of the owners in the development who complain about disorganisation among Tamweel, the mortgage lender, Nakheel, the master developer, and property companies which, after purchasing Discovery Gardens apartment buildings from Nakheel, have sold them as flats to individual buyers. He said a salesperson with the company he bought his flat from entered the property last month and began showing it off to a prospective buyer. His tenant had just come out the shower and was wearing only a towel when she encountered the surprise visitors. "The problem is, they are so disorganised they don't even know who bought which apartment in the building," said Mr Pozem, who said he had tried many times to obtain his deed and has had no success. He fears that if he wanted to sell his flat, the records would show it was still owned by the property firm. "If they go bankrupt tomorrow, I'm basically out of luck; all my money's gone because I don't have a title deed." Mr Pozem is not the only owner worried that without deeds they might not be able to sell their units. Anne, 37, a British national, bought two one-bedroom flats in the Dubai Marina's Marina Promenade in August last year and two more in Green Lakes Towers in Jumeirah Lake Towers. Despite investing nearly Dh4m, she does not have a deed for any of them. Anne, who asked that only her middle name be published, said her main concern was that banks would refuse a mortgage to prospective purchasers without a deed, an increasingly common requirement after the credit crunch. She also said Emaar, the developer of Marina Promenade, and Asam Investment & Real Estate, the Green Lakes Towers developer, had been little help. "I've been given exactly the same reasoning: 'there's a queue at the Land Department; expect to hear from us in September'." A senior administrator at Asam Investment & Real Estate, who gave his name only as Abraham, told The National that a backlog at the Land Department was responsible for the delay. In Green Lakes Towers, he said, about 700 units in the three towers were still waiting to be registered. "We cannot do them individually; we have to register the whole tower together," he said. He added that he hoped the process could be completed within a month. Humaid al Shamsi, the head of the transactions section at the Land Department, acknowledged the issue. Eighty per cent of the buildings on the Palm Jumeirah have been registered, he said, but he did not have details of how many flats had been registered or title deeds granted. At Jumeirah Lake Towers, he said, "the process has been started now." He attributed any delay to "extra measurements" being done to the buildings. Emaar declined to give reasons for delays in handing over deeds, but said in an email that it "works closely with the Dubai Land Department to assist its customers during the process, including having a representative from the Land Department available for assistance at the Emaar Property Handover office." However, Karim Nassif, a property lawyer at Habib al Mulla & Co, said the slowdown in the property market meant a logjam at the Land Department was an unlikely cause for the problem. In most cases of undelivered title deeds, he said, "the developer should be held liable - 100 per cent - for it. They should be delivering their title deeds". And he had a warning for the worried owners: "If they don't have the title deed, their transaction, according to the law, is voidable." email@example.com