Investors are still wating for a positive sign – Sokook Ivory Tower contracts – The National Newspaper
Posted by 7starsdubai on November 8, 2008
Angela GiuffridaLast Updated: August 05. 2008 7:21PM UAE / GMT
Investors in Dubai’s long-delayed Ivory Tower project, who were told earlier this month that their contracts would be cancelled and money returned less a hefty penalty, have been given a glimmer of hope. Sokook Investment Group, the Saudi Arabian developer behind the troubled residential development, told the Dubai Real Estate Regulatory Authority (Rera) that it would reinstate contracts for all the apartments in the building.Earlier this month, Sokook sent a letter to investors saying that their contracts would be cancelled and 20 per cent of the sale price retained.The home buyers were told the decision had been taken because they were in arrears in instalment payments, despite Sokook allegedly informing them a year ago that no further payment was due until construction began.But a legal representative for Sokook told Rera today that all the contracts would be reinstated.“We are waiting for written confirmation of this before we can disclose information to investors,” said the Rera official, who asked not to be named.Sokook also claimed one of its employees had sent the cancellation letter to investors.“They [Sokook] said they didn’t know that one of their employees had sent the letter to investors cancelling their units,” said the Rera official. “But legally, this is not acceptable.”The 20-storey Ivory Tower was launched in 2005 and after it sold out early last year, was supposed to be completed last month. However a dispute over a bank guarantee with Tecom – the master developer of International Media Production Zone, where Ivory Tower is to be located – held up the project.That dispute has now been resolved and at the beginning of July Sokook told Rera construction would begin in November.After the project was delayed, the company gave investors the option of selling the property back with an interest rate of 10 per cent. Originally, the units were sold to investors for up to Dh650 per square foot; at today’s market rates, the company could resell apartments for around Dh1,650 per square foot.The Rera official added that Sokook had expressed concern over whether it could afford to build the tower because of the rising cost of construction.“They say material costs have gone up – but this is not the investors’ problem,” said the official. “If costs had gone down, would they then give investors a refund?”About 20 per cent of people who bought property in Ivory Tower are involved in an investors group, which was set up to deal with complaints about the project.But according to one buyer from the UK, who has paid about Dh240,000 towards his property, investors have so far failed in their efforts to get any official answers from senior management at Sokook.“They are refusing to acknowledge any correspondence from the investors by e-mail, fax or phone,” said the investor, who asked not to be named.The group has threatened legal action if the matter isn’t resolved soon.“We have put on hold meetings with a lawyer until we know whether Sokook is sincere in its commitment to Rera,” said another investor.mailto:firstname.lastname@example.org
Last Updated: July 28. 2008 11:27PM UAE / GMT
DUBAI // Hundreds of investors in the long-delayed Ivory Tower residential project in Dubai have been told by the developer, Sokook Investment Group, that their contracts will be cancelled and 20 per cent of the sales price kept.Investors were told the move was made because they were in arrears in instalment payments, despite Sokook allegedly informing them a year ago that no further payment was due until construction began.
“Since you were not able to pay within the due date and we did remind you of your payment schedule, please accept our apology that your contract has been cancelled automatically,” Sokook said to investors in a letter seen yesterday by The National.It added that Sokook would retain 20 per cent of the sales price as a cancellation fee.Earlier this month, Sokook pledged to the Dubai Real Estate Regulatory Authority (Rera) that construction would begin on Nov 1 after a dispute over a bank guarantee with Tecom – the master developer of the International Media Production Zone, where Ivory Tower is to be located – was resolved.
Rera sent a statement to investors confirming that the issue had been resolved and that construction was likely to begin, albeit three years after the project was launched.The latest move has provoked more fury among those investors who bought units off-plan. “Sokook has said that the reason for cancelling our contracts was due to not receiving instalment payments from us on time, even though we were told in writing from Sokook [about a year ago] that our next payment instalment was put on hold until construction began,” said an investor from the UK, who spoke on condition of anonymity.
Investors claim the contract cancellation is an attempt by Sokook to buy back as many apartments as possible before construction begins.In the past week, several investors have allegedly threatened legal action against the Saudi Arabian company.“Other investors who sent evidence back to Sokook showing them that they were never in breach of their contracts have been called and told that Sokook would be able to buy back their apartments [with an interest rate of 10 per cent],” said the UK investor.
Units in the property that were worth up to Dh650 per square foot back in 2005 are now worth about Dh1,400 per square foot.“Investors are stuck between a rock and a hard place,” said the investor.Another investor, who also asked not to be named, has cancelled his unit in the project after Sokook rebuffed several attempts to pay the second instalment – which was due on July 2 – without explanation.
The investor also claimed he never received the complete contract for the apartment, despite signing it in February.Managers at Sokook’s Dubai office were unavailable for comment when contacted yesterday, although a sales agent at the company said: “At the moment, we still don’t have an exact date from higher management for when construction will start.”When contacted earlier this month, Khawla Madani, a senior legal officer at Rera, said that beyond helping to resolve the issues between Tecom and Sokook, there was little more the authority could do.
“Some of the complaints are actually the job of the Dubai Court to handle,” she said. “We are not the court or judges. We try our best as a mediator.”About 770 investors are believed to have bought property in Ivory Tower, 100 of whom were from the UK.mailto:UK.email@example.com
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