Investors in the long-delayed residential project in Dubai are told their contracts will be cancelled.
Sokook ends Ivory Tower contracts
DUBAI // Hundreds of investors in the long-delayed Ivory Tower residential project in Dubai have been told by the developer, Sokook Investment Group, that their contracts will be cancelled and 20 per cent of the sales price kept. Investors were told the move was made because they were in arrears in instalment payments, despite Sokook allegedly informing them a year ago that no further payment was due until construction began.
"Since you were not able to pay within the due date and we did remind you of your payment schedule, please accept our apology that your contract has been cancelled automatically," Sokook said to investors in a letter seen yesterday by The National. It added that Sokook would retain 20 per cent of the sales price as a cancellation fee. Earlier this month, Sokook pledged to the Dubai Real Estate Regulatory Authority (Rera) that construction would begin on Nov 1 after a dispute over a bank guarantee with Tecom - the master developer of the International Media Production Zone, where Ivory Tower is to be located - was resolved.
Rera sent a statement to investors confirming that the issue had been resolved and that construction was likely to begin, albeit three years after the project was launched. The latest move has provoked more fury among those investors who bought units off-plan. "Sokook has said that the reason for cancelling our contracts was due to not receiving instalment payments from us on time, even though we were told in writing from Sokook [about a year ago] that our next payment instalment was put on hold until construction began," said an investor from the UK, who spoke on condition of anonymity.
Investors claim the contract cancellation is an attempt by Sokook to buy back as many apartments as possible before construction begins. In the past week, several investors have allegedly threatened legal action against the Saudi Arabian company. "Other investors who sent evidence back to Sokook showing them that they were never in breach of their contracts have been called and told that Sokook would be able to buy back their apartments [with an interest rate of 10 per cent]," said the UK investor.
Units in the property that were worth up to Dh650 per square foot back in 2005 are now worth about Dh1,400 per square foot. "Investors are stuck between a rock and a hard place," said the investor. Another investor, who also asked not to be named, has cancelled his unit in the project after Sokook rebuffed several attempts to pay the second instalment - which was due on July 2 - without explanation.
The investor also claimed he never received the complete contract for the apartment, despite signing it in February. Managers at Sokook's Dubai office were unavailable for comment when contacted yesterday, although a sales agent at the company said: "At the moment, we still don't have an exact date from higher management for when construction will start." When contacted earlier this month, Khawla Madani, a senior legal officer at Rera, said that beyond helping to resolve the issues between Tecom and Sokook, there was little more the authority could do.
"Some of the complaints are actually the job of the Dubai Court to handle," she said. "We are not the court or judges. We try our best as a mediator." About 770 investors are believed to have bought property in Ivory Tower, 100 of whom were from the UK. @Email:firstname.lastname@example.org