Torch buyers upset at changes
A group of buyers in the Torch, the world's tallest residential tower, have been told they will not get access to their apartments unless they agree to controversial changes to their contracts.
Select Group started handing over units in the 348-metre-tall, Dh665 million (US$181m) tower in Dubai Marina this month. About 100 apartments have already been handed over and another 200 buyers have booked appointments, said Rahail Aslam, the chief executive officer of Select Group.
But some investors have objected to changes to their contract issued by Select last month that gives the developer rights not in the original contract.
"What they are trying to do is force us into signing away our control," said James Rooney, a UK citizen who bought a two-bedroom apartment in 2005 for about Dh1.3m. "We had a contract and now it has changed."
The amendments apply to about 275 buyers who purchased units under a long-term payment plan under which buyers had until 2021 to pay for their apartments.
The contract changes give the developer the buyers' voting rights on the homeowners association and allows the developer to take control of a unit if the buyer "defaults under any of its obligations".
The documentation also gives Select the ability to transfer sale contracts to third parties.
The changes were necessary to allow Select to move forward with plans to securitise the debt from the long-term contracts, Mr Aslam said. About 50 per cent of the buyers in the long-term plan have already signed the contract changes, he said.
"As far as we're concerned, we have no issues with handovers," Mr Aslam said. "Handovers are happening, which suggests there are no issues with the documentation."
The original contracts allowed for additional documentation to be signed before handover, Mr Aslam said. "Of course they have to sign the addendum, it's part of the handover procedure."
But the owners refusing to sign claim that is not correct. They argue that the contract can be changed only if both parties agree to it.
About 25 buyers have formed a group in London to object to the deal, Mr Rooney said.
They have sought legal advice to back up their claims.
In response, a Select legal representative said in a letter to a purchaser said the buyers would not be able to occupy their units unless they signed the amendments or paid the "full purchase price".
If buyers do not sign, "then we don't get the keys, end of story", said Ian Maclaren, a UK journalist who bought a two-bedroom apartment in 2005. "There's no hint of compromise."
The addendum is a "form of bullying that should not be tolerated", Mr Maclaren said.
"We're saying, 'you're sticking to the wording of the agreement and now when it suits you you're sticking something else in'," he said. "Would they allow us to do that?"
The group members say they are not going to sign and are pursuing their legal options.
Mr Aslam said they represented only a few buyers and insisted there was nothing egregious in the contract changes.
"They're enjoying an amazing payment plan and now they're complaining about it," he said. "I just don't get it."
The Torch passed the Q1 Tower in Australia to earn the title of world's tallest residential tower, defined as towers with at least 90 per cent of the space devoted to apartments.
About 90 per cent of the 676 apartments in the tower have been sold, primarily to buyers from Europe and the Middle East who bought them between 2005 and 2008 at the height of Dubai's property boom.
Updated: May 24, 2011 04:00 AM