[wayneis]

Been discussed in separate threads thought it might be worthwhile starting a thread to follow up on this as it is getting some press in the Local papers

From Yesterdays Gulf News

Real Estate Property


Published: 21/02/2007 12:00 AM (UAE)

Gulf News archive
Some residents say they have been charged more than the 1% freehold registration fee.



Freehold buyers face hidden costs
By Robert Ditcham, Staff Reporter

Dubai: Buyers in Dubai’s property market say they face hidden costs when registering their apartments and villas.

Those who have invested in freehold property and want to register the title currently have to pay Dubai Land Department a fee of 1 per cent of the property value (1.5 per cent under last year’s fee structure).

But some residents say they have been charged a separate fee on top of this amount by developers or owners, which can total several thousand dirhams.

“I knew about having to pay the Land Department fees, but then I found out that I would have to pay extra costs. It’s unjustifiable that the developer is charging me or the building owner an extra amount for a relatively simple process,” said a resident in Nakheel’s International City development.


The issue comes to light as the Land Department prepares to register tens of thousands of apartments in buyers’ names, a process which officially kicked off last week.

David Nicholson, general counsel at Nakheel, said the issue of extra costs applies to cases where Nakheel has sold an entire building to a building purchaser.

“If the building purchaser has sold residential units in that building off plan, the sales contract for the building specifies that anyone who buys a unit must register their purchase with Nakheel and pay an administration fee of 2 per cent of the unit value,” he said.

Nicholson said the “administration fee” covers the issue of the unit contracts by Nakheel, internal registration to protect against duplication of sales and to properly record the ownership so buyers are eligible for a residence visa, if applicable.

He added that the fee also has a revenue component for Nakheel.

“It helps to defray the risk that Nakheel accepts under the registration process. By being in control of the contractual process Nakheel also ensures conformity of contract conditions which is vital in a master planned community,” he said.

A spokesperson at Dubai-based developer Emaar, said the company does not charge for the first registration of the title deed.

“Emaar collects the fees required to be paid by the customer to the Land Department and adds the fee to be paid by Emaar. Together we submit it to the Land Department. No extra charge is levied by Emaar,” the spokesperson said.

From Todays Gulf news more....

Published: 22/02/2007 12:00 AM (UAE)

Dubai to investigate service charges for freehold units
By Robert Ditcham, Staff Reporter



Dubai: Dubai Land Department will investigate service charges tagged onto property registration fees for freehold units.

Gulf News reported yesterday buyers face hidden costs when registering homes, either charged directly by the developer or passed down by a middle man, in addition to the 1 per cent fee levied by Dubai Land Department.

Some residents say "lack of clarity" over charges is undermining confidence in Dubai's property market.

"We're trying to calculate how many extra costs there are and assess the impact they are having on the property sector," said Mohammad Sultan Thani, director of development and marketing in the department.




A resident at Nakheel's International City said he paid the department's fee, as well as a 2 per cent registration administration charge to Nakheel and a further Dh2,000 service fee, which he claims was passed on to him by the building owner (an organisation that buys an entire building from a developer and sells individual units to end users).

Homeowner Haana Kurmoo said Nakheel should have charged more for the flats instead of adding costs at a later stage. "At least it would be a fairer and more honest practice."

If homeowners already holding title deeds wish to transfer their property to another party, they must produce a "no objection certificate" supplied by the developer. Nakheel says it charges Dh1,000 for this service, while Emaar Properties levies a Dh5,000 fee.

"I think Dh500 would be more appropriate for issuing a letter and registering new owners' details," said Natalie Moore.

"I am disappointed the developers are getting away with charging unreasonable amounts for what is clearly just an administration task."

Residents say developers must clarify their charges and give notice of upcoming fees well before keys are handed over.

Nakheel said in cases where a purchaser has sold residential units in a building, anyone who buys a unit must register their purchase with Nakheel and pay a 2 per cent "administration fee".