x Abu Dhabi, UAETuesday 16 January 2018

Debtors' price: dishonour

A Dubai Marina building, faced with more than 100 residents who owe maintenance fees, is trying to shame them into paying.

View of Dubai Marina from a flat in Marina Terrace tower. Notice on the door of an apartment for non-payment of service charges.
View of Dubai Marina from a flat in Marina Terrace tower. Notice on the door of an apartment for non-payment of service charges.

DUBAI // Residents of Marina Terrace know where their neighbours live. They know what units they occupy, they know who has pets, they know who goes to work at what time. And now they know exactly which ones owe thousands of dirhams' worth of maintenance fees.

Yesterday, 107 residents of the Dubai Marina building were named on public noticeboards, along with the amount of service charges left unpaid. The move, which association members called unprecedented, came as Dh1.8million (US$490,000) in dues sat uncollected. Officials also threatened to seize the apartments in question for resale if their occupants failed to cough up. Owners have two weeks to pay, the notices said. After that, anyone living in the property could be penalised.

The association said the defaulting owners, more than half of the 188 who bought flats in the building, have forced management to cut back severely on maintenance, which even switched off the building's facade lights to save electricity. The group has banned those who owe money from using their parking bays and the tennis courts, and said they could even be stopped from using other facilities like the gym and swimming pool.

The tactic could set a precedent for other developers and maintenance managers fed up with non-paying property owners. On Thursday, the association sent defaulting owners a letter reading: "Despite various reminders, many owners have not paid their fair share of these charges. This is putting tremendous pressure on the cash flow and building operations, which in turn delays regular maintenance and upkeep of your building. ... If after the stipulated period we have not received any payments, the owners' association will be forced to file a case with Dubai courts and [the Real Estate Regulatory Agency], which could lead to the court putting a lein on your apartment. This will allow the association to sell the apartment under the supervision of the courts to recover the financial discrepancies owed to the owners' association."

In addition, notices were posted on individual doors headed "Notice of non-payment of service charges" and warning the owner that he or she no longer was entitled to use certain facilities. Kevin Ryan, a spokesman for the association, yesterday said the move was necessary. "This is the first time a 'name and shame' list has been put up in Dubai and in fact, any building in the UAE," he said. "It is not a disrespectful thing or a judge, jury and executioner scenario, it is saying to people our books are in minus credit because of the amount of money owing."

"We have tried diplomacy and politeness to get them to pay but it has not worked," he added. "It is the owners who have paid who have pushed for this. Owners who are not paying cannot continue like this. It is unacceptable. We are trying to build bridges with owners and to create five-star living but if there is not enough money in the pot, how can we do it?" Mr Ryan said the shortfall had been compounded by a deficit of more than Dh1m owed by some of the 12 commercial units in the building.

As a result, he said, only one-third of regular maintenance procedures are being performed. The windows, for example, have not been cleaned since the cradle used to reach all 37 floors of the building broke seven months ago. And three months ago, the association switched off the facade lights in a bid to save Dh35,000 per month. Iranian-born Mehrtash Razavi, 68, a resident owner, disputed the Dh7,747 she was said to owe.

"I paid Dh5,000 recently," she said. "No one cleans the windows, there are bugs coming up from the rubbish chute and they are not doing the most basic maintenance. I seem to be paying all the time but do not see any results. A lot of the owners are not satisfied." Marina Terrace was the seventh building to spring up in the marina and Damac Properties' first iconic building in the area. Since responsibility for upkeep was handed over to the homeowners' association - a move that still isnt't finalised - Damac General Maintenance has been paid to look after the building.

When the contract was renewed in February, the association hashed out a deal to keep service charges at Dh14.54 per square foot. The fees cover the cost of air conditioning in communal areas, overall wear and tear, plus the upkeep of facilities such as the gym, sauna, swimming pool and tennis courts. When owners who had paid their service charges complained to the Real Estate Regulatory Agency (Rera) that others were missing payments and affecting repairs to the entire building, they learned there was sparse legislation to force them to pay up aside from a one per cent penalty fee, which did little to act as a deterrent.

In one case, the owner of a penthouse apartment had notched up defaulting payments of Dh124,453. Others owe amounts ranging from Dh166 to tens of thousands. The association lobbied the maintenance comapany for the names of defaulters and amounts owed. A spokesman for Damac Holding said these were supplied with Rera's approval. Niall McLoughlin, Damac's senior vice-president of corporate communications, said: "These are the actions of the homeowners' association, not DMG, which was requested to supply details of outstanding payments and owners and supplied them with approval from Rera."

Mr Ryan - who owes Dh1,000 himself - said many apartment owners lived abroad, which could be a reason for their failure to pay. "A lot of the problem is that owners do not live here," he said. "In this building alone, Dh3m is owed. Forty-five per cent of owners have paid, but the remainder will not or have not paid. We are not the only ones facing this problem. The reality is that a lot of developers are having the same problems. People just do not want to pay.

"I do not know why, because they have a clear mandate for any grievance or problem through customer relations management. There are processes and proper channels for any problems that people have." * The National