Article on Class Action in the UAE

Business 24-7 recently did a Q&A with 5 lawyers – on Class Actions, and the rights of an investor in taking a bankrupt developer to court. Like everything else – it doesn’t look good for the investor.

Here is a link to the article in Business 24-7:

PDF of above article from Business 24-7
Bankruptcies_ Little scope for class action suit

Jul – Update – Termination Agreement

Finally closed one chapter. Got my PDC’s back. My direct communication with Sweethomes came to a complete halt.

The law firm kept a more unemotional tone through the whole thing and brought things to a close. They collected the Post Dated Cheques, and had the termination agreement signed. Of course, while these discussions were underway, Sweethomes presented two more cheques twice – an old uncleared one for the second time, and a new one. Duh!

Crooks or Clowns – I can’t tell?

Here’s what I lost so far:
Forfeited Payments -175,000 AED
Legal Fees – 21,000 AED (not counting at least 7 visits to SH Homes Office, phone calls, headaches)
Courier, GPA etc – 1,000 AED
===================================
197,000 AED or US$53,600
===================================

I have to wait until Dec 2010 at the earliest to get AED 175,000 back (50% of total paid). Something tells me that it will involve another lawyer and more chasing – unless Sweethomes has a miraculous change in their corporate culture.

Very very painful, but not to have to deal with their unscrupulous practices, an absent regulator & system, near impossible court system and finally the stupid laws around post dated cheques is Priceless.

June 09 – Ajman Uptown / Sweethomes – Oman

Have a look at the attached blog -

I think this blog captures the crap we’ve been subjected to – specifically (see pdf file or link at bottom):
Muscat Confidential_ Omani papers continue to print any PR crap they are sent

” Basic story: Sweet Homes apparently advertise a deal based on a 10% deposit, regular payments until 50% paid, followed by 25% on completion and a further 25% after that. It seems Sweet Homes asks for post-dated cheques from ‘investors’ who purchase, and then proceed to cash them, because the contract is in reality based on a pre-defined project time schedule and is not related to actual physical construction milestones, simply against a promise to finalise contruction.”

http://muscatconfidential.blogspot.com/2008/12/omani-papers-continue-to-print-any-pr.html

Jun 09 – Post Dated Cheques – PDC – UAE Central Bank

Here’s the link to the UAE Central Bank. I’d urge those whose PDC’s (Post Dated Cheques) are being mis-used by developers &/or cashed at will, without progress, unauthorized endorsements etc. – to write to the bank.

Don’t know if it will work – but they seem to have a well laid out process see;

http://www.centralbank.ae/complaints/complaints.php

Here is the page with specific email addresses:

http://www.centralbank.ae/contact_us.php

Or – Complaints and Suggestions Section

Direct telephone:	02- 6915290 / 02- 6915453
Fax No.:	02-6916004
E-mail:	complaint@cbuae.gov.ae

Jun 09 – Sweethomes Business Practices

As you’ll see below, I rcvd a fax from Sweethomes, on the 21st of June – giving me 3 days to sign and return the cancellation agreement.

Not long after this letter was sent, they tried to cash another 2 cheques – just plain incompetence. These kind of practices, very much summarize my experience with Sweethomes. The more I interact with them, the less trust there is.

There were 7 pages in all – I am just posting the 1st page of the letter. The other 6 were some pictures, notice of setting up the Escrow account etc. All written to suit them.

————————————————————————————
From:
Subject: Re: – Termination of Agreement – 4th request – Real Estate Purchase gone bad in Ajman/Sweethomes
Date: 21 June 2009 9:56:02 PM GMT+07:00

to: husain@sweethomesuae.com, ivy@sweethomesuae.com, saher@sweethomesuae.com, shalin@sweethomesuae.com, rafail@sweethomesuae.com, tabis@sweethomesuae.com, ahmed2@sweethomesuae.com, resine@sweethomesuae.com, mukhtar@sweethomesuae.com, fahad@sweethomesuae.com, commme@emirates.net.ae, amal.h@Arra.ae, latifa.n@Arra.ae, omar.b@arra.ae, info@rholding.com, ialyassi@ajmanrulerscourt.gov.ae, msuwaidi@ajmanrulerscourt.gov.ae, rana.mubarak, husain@sweethomesuae.com, bhope@thenational.ae, ngillet@thenational.ae, lmorris@thenational.ae, content@zawya.com, agiuffrida@thenational.ae, info@rholding.ae, readers@gulfnews.com, richard.spencer@telegraph.co.uk, chip.cummins@wsj.com, stefania.bianchi@dowjones.com, editor@mediaguardian.co.uk, simon.jenkins@guardian.co.uk, joanna.hartley@itp.com, alex.morgan@itp.com, anil.bhoyrul@itp.com, andrew.white@itp.com, desert_blogger@hotmail.com, sean.odriscoll@7days.ae, cranecountry@thenational.ae, abdulbasit@khaleejtimes.com, aneela@khaleejtimes.com, nouf.k@arra.ae, parag.deulgaonkar@awraqpublishing.com, uharnischfeger@thenational.ae, tpantin@thenational.ae.

Dear:

I rcvd a fax from you, date stamped on the 21st of June – faxed earlier today – giving me 3 days from 18th June to sign and return. If it was sent directly to me, it expired before arrival.

If the letter was sent to the law firm – you sent it on Thursday night, to take advantage of the weekend – knowing full well that no one could respond.

I think you, and your company’s ways speak for themselves in ways that I cannot express any better.

Your firm, and other developers in Ajman are taking advantage of the fact that there are more rules governing post dated cheques – than there are around construction start, construction quality and delivery.

Regards
Unit B- Ajman Uptown
SH Letter-June 21st

Jun 09 – Post Dated Cheques

Sweethomes has not returned my Post Dated Cheques (PDC). They’re probably holding it hostage for some surprise they intend to spring in the future.

Buyers who have PDC’s outstanding also seem to be perplexed. After the escrow laws were introduced, the old cheques became invalid – at least technically – because the payee name has been changed.

Old cheques were made out to Sweethomes Real Estate or Sweethomes Holdings.
The new payee should be – Escrow A/C- Ajman Uptown-Sweet Homes.

Sweethomes position – see quotes below

“When Escrow account is opens we would endorse all your cheque to the Escrow Account under your property No.
We request you to bear with us, sooner when we received the Escrow account No, we will intimate you for your needful and necessary action”.

How they will endorse it without using whiteout…. is beyond me. If any of you has any experience with this, I’d be interested in hearing about it.

On the bright side, they seemed to have stopped trying to cash into a non-escrow account… for now.

End May 09 – More chasers….

Radio silence once again…… I think their strategy is to wear everyone down…..

——————————-2nd Chaser————————————-

Sent: Wednesday, May 27, 2009 3:32 PM
To: SH-Sweethomes
Subject: Re: B### Ajman Uptown – Termination of Agreement – 2nd Request

Dear Mr. _____:
Can you pls let me know when I can have someone come to your office to pick up the agreement?
Thank you

————————————-1st Chaser ———————————————

On 24 May 2009:

Dear Mr. ____@sweethomes:
Thank you for getting back. I am Ok to proceed as you suggest.

I can arrange to have someone come to your Dubai office and pick up the agreement. Please let me know when, and who they should see.

Thank you
BUYER

End May 09 – Termination Agreement Logistics

Here’s my proposal to Sweethomes question – “Are you coming here to sign this agreement.”

—————————————————————————————

From: BUYER
Sent: Wednesday, May 20, 2009 1:39 PM
To: SWEETHOMES
Subject: Re: (B### Ajman Uptown) – Termination of Agreement – 2nd Request

Dear Mr. SH:

I can have someone with a Power of Attorney – on my behalf – go to the lawyer’s office in Dubai. If you can arrange to have a Sweethomes representative bring a signed copy / or sign there, along with the post dated cheques, we’ll exchange it for all the original documentation and conclude it there.

Please let me know if the above is acceptable? If yes, please let me know – when would you like to do this?

End May 09 – Follow Ups on Termination Agreement

Chased down the status of the Termination agreement with Sweethomes a couple of times.

———————-FOLLOW UP 2———————–
May 20th 2009:
To:husain; ivy; Saher; shalin; rafail; Tabis; ahmed2; resine; mukhtar; fahad; commme@emirates.net.ae
Subject: Re: B Ajman Uptown – Termination of Agreement – 2nd Request
Dear Sir / Madam:
Appreciate if one of you can let me know the status on this?
Thank you

———————-FOLLOW UP 1———————–
On 18 May 2009, at 2:06 PM:
Dear Mr.:
I am writing to follow up and see if you can close this matter – ie process the cancellation of Unit B- in Ajman Uptown.
Look forward to your response,
thank you

Sweethomes – Got me once, Got me twice….not quite

Given their business practices, and my experience with these saints – I go back to the Legal Firm to draft a termination agreement.

My concern, if I simply cancel and return all the documentation – without a termination agreement;
- Sweethomes would just stall on returning the PDCs (Post Dated Cheques) after I’ve fullfilled everything I am supposed to. I’d be on Terminal Hold, waiting for the 50% refund. After all, this is how I got trapped in the first place…. did everything I was supposed to – like making every payment – while they twiddled their thumbs.

So, off to the lawyer, for a Termination agreement…. more expenses, more crap….. but what to do.