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

NYT Article – For a Bounced Check in Dubai, the Penalty Can Be Years Behind Bars

Article from the NYT that summarizes the situation well.

On one hand – you have people putting up brochures, selling apartments to be built on land that they don’t own, collecting 30%, 40% payments – all with impunity.

On the other hand, bounce a cheque and you go to jail… even if you are getting shafted by one of the above schemers.

Click this link for the NYT article (Registration Required):

Or click below for a pdf copy of the article
For a Bounced Check in Dubai, the Penalty Can Be Years in Jail – NYTimes.com

Sweethomes / Post Dated Cheques

Article from Business 24-7 (Dated Wednesday Aug 19th). See link at end of excerpt.

“Ajman property buyers seek cover for PDCS
Investors in the Paradise Lakes Towers project at Emirates City, Ajman, want their payment plans rescheduled because of delays and the fear that post-dated cheques (PDCs) that were to be banked only on completion will be cashed in.

The project was due to be delivered in December 2008 but master developer R-Holding is now working towards a 2009 deadline.

Sweet Homes, an exclusive selling and marketing consultants, has already cashed cheques dated December 2008 that were conditional on completion, an investor told Emirates Business on condition of anonymity.

Omar Al Barguthi, Director-General of the Ajman Real Estate Regulatory Agency, said work on the project was continuing though it was slightly behind schedule.

Sweet Homes and R-Holding did not reply to enquiries from Emirates Business.”

——

Link to article from Business 24-7.ae

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.

ITV – Homes from Hell

I am taking the liberty of copying and pasting a message from another Forum. This one is from a UK producer that is looking for stories from Dubai. My experience was a few kilometers over, across in Ajman. The title very aptly describes our experience in the desert.

Write to them if you feel you have something to contribute and could benefit from some attention.

—————Posted @ Skyscraper City – July 1st———————–

Dear all,

The next series of ITV’s Homes From Hell is looking for stories from Dubai.

Did you have to wait years for your off-plan apartment to be finished? Were you stung by rising development costs and hidden fees and charges? Was your finished apartment far from the luxury build you paid for? Did your developer disappear when you discovered the property you bought was to be built on land the developer didn’t even own?

If any of this sounds familiar and you have a story you would like the journalists at Homes From Hell to investigate then please get in touch at victoria.thake@itv.com or on 0207 157 4276.

Many thanks,
Victoria Thake
Assistant Producer, New Homes From Hell

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-Trying to retrieve PDC (Post Dated Cheques) Response from Dubai Islamic Bank

If you saw the previous post, I decided to approach the Bank (Dubai Islamic Bank) where Sweethomes would endorse & deposit the cheques.

Here’s what I got back from DIB. At least a prompt response – even if USELESS.
—————————————————————————————–
From: Service.Quality@dib.ae
Subject: RE: Ajman Uptown Escrow Account – #E00697881310B###
Date: 26 April 2009 7:08:44 PM GMT+07:00
To: [buyer], Contactus@dib.ae

Dear Mr. ,

Thanks for contacting DIB Service Quality, please note that regarding your email dated on 25/04/2009 with same above subject, you need to follow the same with developer in order to finalize your request.

Thanking you once again for contacting us.

Best Regards

Service Quality Department

Jun 09 – Trying to retrieve PDC (Post Dated Cheques) – Letter to Dubai Islamic Bank

Having hit a wall with Sweethomes….trying to climb, tunnel under it, or go around.

1) Although Sweethomes cancelled, they don’t want to return uncashed Post Dated Cheques.
2) The new escrow accounts are with Dubai Islamic Bank, so I decided to write to them…. both email & fax.

See below:
————————————————————————————-
From:
Sent: Saturday, April 25, 2009 5:06 PM
To: Contactus (DIB-UAE); Service Quality
Subject: Ajman Uptown Escrow Account – #E00697881310B###

Dear Sir / Madam:

I faxed this request earlier today.

This is a request that DIB not accept any endorsements on my cheques that were made payable to M/s Sweethomes Real Estate – for deposit into the above account.

Mashreq bank, on whom the cheques are drawn – claim that there is no system for the cheques to be endorsed. Having said that – Sweethomes claims to be working on a system with Dubai Islamic Bank whereby the cheques are re-routed or endorsed for deposit into the above escrow account. A total of 9 cheques – worth AED 667,000.

I have written to Sweethomes, to cancel my purchase of this property. They have received my request for cancellation and I am having the law firm draft a mutually acceptable agreement.

If this is beyond your bank’s control, please let me know and I will make other arrangements. If you require any further information to action the above request, please let me know.

Best Regards