Skip to content

Dubai developer cannot demand property owners pay for access to pools and beaches

A row had broken out earlier this month over attempts by Nakheel, Dubai’s largest property developer by assets, to prevent home owners and tenants at the Palm Jumeirah from using the property’s beach, swimming pools and gyms.

The company distributed leaflets saying that it planned to charge households AED5,000 ($1,360) a year for access to these parts of the man made island. Non residents would be charged AED12,000 and guests AED200 a day.

But property owners said that they felt they already paid for these facilities through the extra premium charged for the real estate and via service charges.

Now Dubai’s Real Estate Regulatory Authority (RERA) has said that by law no one can stop an owner or a registered tenant from using the communal areas once they have paid service fees.

‘If you bought something based on an agreement with a developer, he can’t change it,’ said Marwan bin Ghalita, RERA chief executive officer. A spokesman for Nakheel declined to comment on the issue.

However, Nakheel, which owns the clubhouses between the shoreline buildings, can charge residents for the use of facilities and services that aren’t specified in their contracts such as poolside sun beds, towels, showers and changing rooms, bin Ghalita said.

If the developer wants to block residents from accessing the clubhouses where gyms are located, it would have to provide gyms inside the apartment buildings, bin Ghalita added.

Many homeowners haven’t yet paid their services charges and Nakheel required temporary security cards to prevent those who haven’t paid from accessing the facilities, bin Ghalita also revealed.

The developer and the Home owners’ Association will meet soon to try to resolve the situation, according to RERA. Nakheel and other developers are in the process of submitting blueprints of their buildings to RERA to establish and define communal areas.

‘We want to make sure that all non communal areas aren’t included in the service charges, so owners won’t overpay. That’s why we are taking our time to subdivide all of the buildings,’ added bin Ghalita.

It is felt that Dubai developers are trying to generate income after the global credit crisis left many of them short of funding to complete projects across the emirate. Nakheel has incurred AED78.6 billion in losses since the crisis began in the third quarter of 2008.

In the past, Nakheel derived most of its income by selling properties before they were built. It also sold plots of land to smaller competitors after providing infrastructure such as roads, water, sewage and electricity.

The company, which was forced to suspend work on two other man made islands after the credit crisis, is trying to increase recurring income from rentals and shopping malls.