Dubai Creek Area

Off Plan Developments in AJMAN – Update

None of the 900 tower developments in Ajman that were launched in 2007 & 2008 by Ajman Government in partnership with hundreds of different developers have been completed. After the financial crisis at the end of 2008 and early 2009, developers could not get bank funding and customers stopped making payments and these buildings have not been built. Most of the funds paid to developers have been spent on plot payments to Ajman Government and other admin expenses. About 10 buildings are nearing completion in Emirates City and may be completed in the future.

The developers (and in many cases, if the developer is no longer around, the master developer) have offered alternative identical size apartments to customers but no refunds have been offered or are ever likely to be offered. There is a possibility that Ajman Government may pay some compensation in the future but there is no confirmation of this.

Customers who had made part payments of between 10% and 50% were offered alternative apartments in a few buildings that were  nearing completion in Emirates City, and in the old city of Ajman, providing they paid the remaining part of their payment. However, as property prices had fallen by more than 50% following the worldwide financial crisis, the amount outstanding was always more than the current property value, even for customers who had paid 50%. Thus most customers did not take up this option. Instead, those that were interested in getting an apartment have purchased an equivalent ready apartment in Dubai direct from Openshore, independent of the developer with the remaining funds. Openshore offered such customers a subsided price and payment plan on ready Dubai property, which in most cases was better than the property they would have got in Ajman.

The only recourse for customers for other customers was to go to ARRA as action via courts is likely to be expensive and not produce the desired refund outcome. However, ARRA together with Ajman Government are now taking the view that a replacement apartment for the remaining funds is a fair offer and are actively supporting R Holding and their subsidiaries including ‘Charles Estates’ in this offer and thus refunds are not available through any route at present.

ARRA

www.arra.ae

 Replacement Solutions from Ajman Government

http://www.rholding.com/#/replacement

 R Holding

http://www.rholding.com

6 thoughts on “Off Plan Developments in AJMAN – Update”

  1. How does the switch to ready Dubai property work. I bought a Studio in Ajman direct from the developer for AED 340,000 and have paid 40% – AED 136,000.
    Can I get a get a ready Studio in Dubai direct from Openshore on a payment plan for the remaining amount which is AED 204,000?
    If so can I still keep my claim for a refund of AED 136,000 from the developer?

  2. Yes. You can indeed get a ready Dubai Studio from Openshore for under AED 204,000 with a payment plan. The reason why we are able to do this is that price in Dubai have halved.

    This is exactly what many of our existing customers who purchased in Ajman have done over the past few months. Our view is that property prices in Dubai will increase in the next 3 to 5 years and these customers will do well even if they are not successful in getting the refund from the Ajman developer. In such a case they would end up with a better property than their Ajman property for the same price.

    Not all customers have taken up this option as many of them had financial issues and did not want to proceed with any property in the UAE. Whilst we will continue to update all customers, our view is that refunds from these Ajman and Dubai developers are unlikely as many of the companies have ceased trading and the master developers are only offering exchanges to other off-plan properties (with the same risks).

  3. I got one of these Dubai properties. I was messed about by the developer in Ajman. However I have now ended up with a property in Dubai which I have seen last month. The Openshore Dubai people showed it to me. It is rented out and they are managing it.
    I am hoping that Dubai property prices will rise again. Openshore did a good job in difficult circumstances – well done. I do however intend to keep my claim alive against the Ajman developer and will sue them to get my refund.

  4. Yes. I had a 2-bedroom apartment in Ajman and I have switched to TWO 1-bed apartments from Openshore. I dealt with Openshore’s UK staff and have just been to Dubai to see the properties. I had to go to the Dubai notary office to get my documents attested so that openshore’s Dubai people could transfer the properties to my name.
    Prices in Dubai will go up – I am going to hold these properties for the long term investment.

  5. Surely Openshore should also take the responsibility for customers who have not switched to a ready Dubai property and cannot afford to do this. We are still owed over £20,000 by the developer who has not even started construction after 5 years and has not responded to our emails. I don’t want to switch, I just want my money back.
    Although we purchased direct from the developer, Openshore did recommend these properties to us back in 2007, so you should help us fix this.

  6. Just to be clear – Openshore will continue to support and help all off-plan customers who have been let down by developers in such a way. However, we are told that refunds from developers are unlikely.
    1. Firstly we regret recommending off-plan properties from all developers in Dubai and Ajman in 2007 and 2008. We like many others were not aware that a financial crisis was on its way and that property prices would crash the following year by over 50% all over the UAE including Dubai and Ajman. We stopped selling off-plan property 3 years ago.
    2. Whilst Openshore Property Ltd do not have any contractual legal responsibility regarding this issue (as the contract were between the developer and buyers), we still intend to help and support all customers. Unlike many other estate agents that have simply disappeared after the financial crisis we have been through it and our relationship with our customers – even those that have not switched to a ready Dubai property has been good. Over past few years our work has been more related to customer support and less related to sales.
    3. We have been through the processes of legal action with developers, complained to regulatory bodies, tried to negotiate switches to other properties, and have applied pressure on developers and master developers by all means. Developers did offer switches to alternative properties but in most cases, in our view, these were not good value for our clients.
    4. We have offered subsidised ready property in Dubai (independent of the developers) and many customers did take up this option and were offered a payment plan too. We also extended this offer to customers who purchased in Ajman via other estate agents. This offer has now ended.
    5. We will continue to support you and other customers that did not take up the switch to Dubai offer. However, realistically we do not believe that refunds will be made by developers, even if legal action was successful, as most of these developers have stopped trading.
    6. If master developers or Ajman authorities do make any compensation – we will let you know proactively and help you claim it.

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>