2009 predictions for Ajman?

[farren]

Hi all thought i would open thread to discuss above topic.

 

[financier888]

Ajman 2009 & beyond

Hi all thought i would open thread to discuss above topic.

Good Topic! but one, that many brokers will most likely not want to speculate on. 6 months ago, Ajman - and with the skyrocketing inflated market/prices of Dubai, Ajman seemed like a real viable alternative - as a bedroom community for Dubai but now, all that has changed.

The first clue that there were serious problems in Ajman was their annoucement in Sept that summarily revoked all visas for Freehold Owners and Free Zone incorporations. Although some form of visas may likley appear with restictions, you cannot overlook the timing and the way it was done.

There have always been serious questions about Ajman and the infrastructure - namely the electric. Although a JV was announced with firm to build a plant (ready in 2-3 years) I heard that may be cancelled - as the financing dried up.

Dubai is strong and will still garner financial support - the infrastructure projects are still proceeding and Dubai is bankable. If Dubai took a hit in this financial crisis - what effect do you think it's had in Ajman? Who has a fraction of the wealth? There is also far less transparancy and investor protection in Ajman albeit they are instituting a RERA type structure.. Too little too late I am afraid.

Insiders are of the opinion that Ajman may become a vertible real estate graveyard with many projects partially built being abandoned. Those that have not broken ground will not and for those investors that started to make payments and not protected by escrow accounts . with questionable developers? A right-off. Their money will dissapear and the paper plans they were built on.

We'll all know in the coming months as the 'plots' unfold.

 

[Investoman_uae]

I dont mean to be negative but maybe someone can give me their views. I have invested in a one bed flat in Ajman... good location, full lake front, smart home technology and the rest of it.

The developer keeps asking for cash every month. Now the payment plan says I have to pay a percentage every month... it amounts to around 10,000 dirhams.

I must admit, I feel unsure about this development.... he keeps telling me we will start the piling works next month, next month, next month..... I dont see crap happening.... and I am beginning to loose confidence. Will this building be built even? He said once its built we have to wait for one year for electricity to arrive.

Now the million dirham question...

Do I pull out and forget the money I paid?? I'll consider this a failed investment. Right now, the way I see it.... if I continue to pay and then the developer goes pop... I would loose alot.

What do I do? Are these Ajman developers serious? Are they bound by any law? Is the Ajman government protecting the investors in any way shape or form?

Your advice is appreciated.

Inv.

 

[georgihh]

I dont mean to be negative but maybe someone can give me their views. I have invested in a one bed flat in Ajman... good location, full lake front, smart home technology and the rest of it.

The developer keeps asking for cash every month. Now the payment plan says I have to pay a percentage every month... it amounts to around 10,000 dirhams.

I must admit, I feel unsure about this development.... he keeps telling me we will start the piling works next month, next month, next month..... I dont see crap happening.... and I am beginning to loose confidence. Will this building be built even? He said once its built we have to wait for one year for electricity to arrive.

Now the million dirham question...

Do I pull out and forget the money I paid?? I'll consider this a failed investment. Right now, the way I see it.... if I continue to pay and then the developer goes pop... I would loose alot.

What do I do? Are these Ajman developers serious? Are they bound by any law? Is the Ajman government protecting the investors in any way shape or form?

Your advice is appreciated.

Inv.

How much have you paid so far and what is your original payment schedule?
The best thing is to stop paying and wait for the construction to start before paying again.
Ajman is not the best place to invest and don’t bother too much

 

[Roshan]

I dont mean to be negative but maybe someone can give me their views. I have invested in a one bed flat in Ajman... good location, full lake front, smart home technology and the rest of it.

The developer keeps asking for cash every month. Now the payment plan says I have to pay a percentage every month... it amounts to around 10,000 dirhams.

I must admit, I feel unsure about this development.... he keeps telling me we will start the piling works next month, next month, next month..... I dont see crap happening.... and I am beginning to loose confidence. Will this building be built even? He said once its built we have to wait for one year for electricity to arrive.

Now the million dirham question...

Do I pull out and forget the money I paid?? I'll consider this a failed investment. Right now, the way I see it.... if I continue to pay and then the developer goes pop... I would loose alot.

What do I do? Are these Ajman developers serious? Are they bound by any law? Is the Ajman government protecting the investors in any way shape or form?

Your advice is appreciated.

Inv.

As the saying goes " When you are in a hole, stop digging ". Depends on how much of money you have put in. If it's a small amount, it would do you and your health good to exit. By putting more money in, you might be just putting into a development which might not actually see the light of day.

How good is the developer ??. If it's an ETA Star, it should be OK. But...if it's another Al Baraka, you know what the answer is.

It's better to loose little than more. If you have to decide to forfeit, then take your chance and tell the developer " no payments until I see some movement on site ". Who knows that stance might actually get you an extension.

Developers act tough but would not want to go in for cancellations as they would not like to take a liability back and in the bargain kill the golden goose.

I am associated with the A/C industry and once questioned a contractor who is strong in the northern emirates on why he couldn't get jobs in Ajman. That's when he said he had doubts on Ajman getting water & electricity till 2015 and would want his retention money ( which might be his profit and linked to handing over ) to be stuck till handing over of the building.

Good luck and hope you do not loose your money.

Roshan

 

[Investoman_uae]

I invested about 100,000 so far in this flat. The price I bought it for is 510/sqft. The payment plan was like 5, 5, 10, then 2.5% every month.... so far I paid 22.5%

The developer is BL Properties.... Some ppl told me good things about them. . . but alot are keeping quiet when I ask... either they dont know the developer or they dont want to upset me ....

Thats the idea Roshan, I dont want to dig deeper.... but am told definately the developer will start diging holes in Emirates Lake Towers land in January... so soon we will see the beginning of this project.

Any further advice ?? If I decide to sell... what are the chances? Even at a loss....

Inv.

 

[financier888]

I invested about 100,000 so far in this flat. The price I bought it for is 510/sqft. The payment plan was like 5, 5, 10, then 2.5% every month.... so far I paid 22.5%

The developer is BL Properties.... Some ppl told me good things about them. . . but alot are keeping quiet when I ask... either they dont know the developer or they dont want to upset me ....

Thats the idea Roshan, I dont want to dig deeper.... but am told definately the developer will start diging holes in Emirates Lake Towers land in January... so soon we will see the beginning of this project.

Any further advice ?? If I decide to sell... what are the chances? Even at a loss....

Inv.

BL are good developers with a solid track record. (in Pakistan) but new to this region. Although the major concerns I would have are related to Ajman municipality...

I would recommned the following :

1) Drive to Ajman and go to the municipality - the Land Dept and find out if the HAVE TURNED OVER THE LAND to the developer. in Dubai, the developer cannot pre-sell until handover - this has not been the case in Ajman, If the land has NOT been turned over the developer - i would go to their office and tell them, that although you have faith in the developer, you want to cease all payments until such time the land has been conveyed and construction can begin and insist on a timeline.

2) Is there an escrow account? There should be and you should be able to check with the bank that is holding the escrow and verify your balance. If there is no escrow, I would check the terms and conditions of the reservation form and pursue a refund. (it's too easy for the guys to do a runner if it all goes belly-up)

3) Lake View? - may I ask - where is the water in this 'Lake' supposed to come from? Surely it's not fresh water!!! (one the challenges is potable water in Ajman and more desalinization plants and the electric supply to operate them 24X7 !!!)
If this LAKE is supposed to be fed from a channel from the sea - this would imply that the Ajman govt is responsible to complete this work... if that is the case, you better forget about the Lake View for awhile...

The delays in Ajman may not necessarily be the fault of the developer - it may very well be due to delays in the hand-over and those delays may be indefinite. If the Ajman govt does not have the funding to complete the infrastructure, these projects may be delayed for years... It may be better to cut your losses...

Based on the contract between the developer and the MASTER DEVELOPER - if they are delayed in the handover - the MASTER DEVELOPER should provide relief to the developer and suspend the land payments. But this of course, depends on the strength of the contract between the parties... Indeed, the Master Developer may want the developers to default which takes them off the hook to deliver the infrastructure.... This is a real possibility...

Ajman govt is trying to set-up a RERA kind of structure as it NEEDS the funds that come from development but like most current real estate markets, are facing tough times ahead due to lack of liquidity and it is doubtful that Abu Dhabi will assist them like they are in Dubai...

I would not make any more payments, do some more due diligence and consult and atty as to your rights outlined in the agreement you signed. The key may be in the handover issue..

good luck!

 

[Investoman_uae]

What are the risks? If I dont make any more payments what can they do? Will I loose the previous payments if I default? I kno there isnt much law to protect the investor in Ajman.... but previously, BL did demand and gave me a deadline etc....

Also, the other thing worrying me is the time scale.... these guys wont finish the devleopment till end of 2011.... thats pretty far.... and he said we will finish end of 2010 but it takes a year or so to get the power.

BL have a contract from the municipality that says they will get electricity for sure etc... otherwise all these developments will not work and Ajman will collapse.... now is this a possibility? Are all those developments on Emirates Road fake?

I dunno why i am loosing confidence this is why I feel like I dont want to pay anymore. Obviously selling is not an option right now.

I will do the due diligence... thanks for your advice.

Inv.

 

[financier888]

What are the risks? If I dont make any more payments what can they do? Will I loose the previous payments if I default? I kno there isnt much law to protect the investor in Ajman.... but previously, BL did demand and gave me a deadline etc....

Also, the other thing worrying me is the time scale.... these guys wont finish the devleopment till end of 2011.... thats pretty far.... and he said we will finish end of 2010 but it takes a year or so to get the power.

BL have a contract from the municipality that says they will get electricity for sure etc... otherwise all these developments will not work and Ajman will collapse.... now is this a possibility? Are all those developments on Emirates Road fake?

I dunno why i am loosing confidence this is why I feel like I dont want to pay anymore. Obviously selling is not an option right now.

I will do the due diligence... thanks for your advice.



Inv.

Hi Inv. - without seeing the actual contract or the reservation form, I cannot comment to the extent of your liability, (if any) or what recourse is available to you - you should consult an atty. I take it you have NOT recived the SPA from them?

BL or any devleoper will tell you that they have representations from the Master Developer about the electric - but that was all well and good as late as Sept - since then, everything has changed.. Although a deal was struck with a Malaysian firm to build a power plant, I understand now, that the deal may be off due to a lack of finance.. That would have delivered power by 2012. The consensus, as it stands now, you may be looking as late as 2015... (it's a serious mess up there..) Marmooka city was also delayed on the handover and not sure if it has been done by now but I dont think so.. i dont think they have the requisit funds to complete the infratructure work Several buildings in the center of ajman - completed - are delayed in being handed-over - no electric avaialble from the grid. There are real transparancy issues in Ajman.....

BL is good and reliable but at the mercy of the Master Developer and the govt that supplies the infrastrcuture... The delays you mentioned as it relates to the piling raises legitimate concerns... It all comes down to the contract you signed - the terms and conditions and what recourse is available to you - in which you'd better consult an atty. The developers will not want to disclose much and keep the money coming in but chances are, if they have sold less than 50% of the project - and potentially more defaults of existing buyers - the project may come to a grinding halt..

Emirates city is another matter as there are many projects in various stages of construction.. The Master Developer would be wise to consult a power company to build a power plant on a BOT basis - to supply the development but again, this needs the Ajman municipality to be onboard and therein lies the problem. At the moment they are quite busy trying to secure immediate solutions to provide the existing structures (local housing) with electric - to meet the current demands...

In closing, try to get the facts independantly - direct from the municipality and then consult an atty in regard to your contract. The developer will be faster to respond and perhaps more forthcoming if they get a notice from an atty ! (and this should not cost you much..... ) BL pretty much operates by the book - so, I suspect that their project has been approved - the handover is another issue.. If the plot has been handed over - then you need them to make solid representations as to the delivery of utililites upon handover and recourse, if not done so in a timely manner.....

On the visa front, I believe the laws will change and visa's will be issued again - not sure of the timeline though...

I hope this was helpful.

 

[Roshan]

I invested about 100,000 so far in this flat. The price I bought it for is 510/sqft. The payment plan was like 5, 5, 10, then 2.5% every month.... so far I paid 22.5%

The developer is BL Properties.... Some ppl told me good things about them. . . but alot are keeping quiet when I ask... either they dont know the developer or they dont want to upset me ....

Thats the idea Roshan, I dont want to dig deeper.... but am told definately the developer will start diging holes in Emirates Lake Towers land in January... so soon we will see the beginning of this project.

Any further advice ?? If I decide to sell... what are the chances? Even at a loss....

Inv.

You could try selling at a loss - OR - the other option is refuse to pay...remember BL or FL properties, they would not want to kill the golden goose. Don't you know that the investor and not the developer is king.

The developer would hate to take back the property which is giving him his money. I strongly suggest that you renegotiate the terms.

Regards

Roshan

 

[financier888]

You could try selling at a loss - OR - the other option is refuse to pay...remember BL or FL properties, they would not want to kill the golden goose. Don't you know that the investor and not the developer is king.

The developer would hate to take back the property which is giving him his money. I strongly suggest that you renegotiate the terms.

Regards

Roshan

Dear Inv - Roshan does make good sense. Any developer in their right mind, would recognize the current financial challenges and be flexable in renegotiaiting the payment schedule and structure it linked to construction progress - the same way a construction loan from a bank works. If the developer remains intractable - it can suggest two things - 1) they are over-stretched and in desperate need of cash to make the payments for other land plots - meaning your funds may be diverted to other projects as there is no escrow acct protecting you - ensuring your funds are being applied to YOUR project and 2) the Ajman master developer is not providing relief to the developer Several months ago, I heard this was the position of the Master Developers in Ajman - it was almost as if they wanted the developers to default so they can take back the land and keep whatever monies already paid as well as be 'off the hook' to deliver the infrastructure.

I would insist upon a guarantee that any future payments be placed in a proper escrow acct to ensure my funds weren't being diverted and a restructuring of the plan to reflect construction progress.. ANY and ALL investments in Ajman off-plan sales at this point should be considered VERY HIGH RISK! Ajman authority is in the process of setting up their version of RERA and instituting the escrow accounts - what that timeline will be - anyones guess...

I would explore the other option to sell at a negative premium and get back as much as I could.. If I had paid AED 100K - I would be delighted to net out AED 80K under the present circumstances...

Another problem with Ajman developers these days is as follows : - No contractor will sign an agreement to build your project unless they have a gaurantee that the developer can meet the payments.. ( this is true in Dubai too...) No contactor wants to expose themself with the cost of deployment only to have cease building from a cancelled project after 3 months... Of course, there are many small contracting firms that may be more flexible - but for the larger firms that can deliver in a timely fashion - I know this to be the case

good luck

 

[scipio]

Hi All

I have two studio flats in the proposed Konig Tower in Marmooka City. I have paid the developer about 90 000 dhs so far and a big payment is due this month. I am getting nervous about making further payments.

Does anybody know anything about Konig Real Estate Developers? The reports I had from property agents in Dubai painted them in a positive light although citing that they are small players compared to some others in the region.

Should I try and flog the units (even at a loss) or stick it out until April 2011 when the project is scheduled (on paper at least) to complete? The reports I have about problems with electricity supply ( and thus - water) is of real concern to me
Any advice would be much appreciated

 

[Dash]

This thread continues to be a very valuable discussion for me.
I am in a nearly identical situation to Investoman_UAE, having invested nearly 150k dhs into a BL development in the same region, and being new to property investment in general as well as having put the "few eggs" I have all in "one basket" I'm very torn as to abandon hope or to keep putting money into a potential lost cause.
I have been assured that my money is going into a new Escrow account, but there are still many unanswered questions for me. I understand that my money is protected from being funnelled to different projects this way, but what if this development is cancelled?
What avenue did you end up taking, Investoman_UAE?

-D

 

[NOOR_ALI]

Dash,
I also invested with BL properties. I only signed a reservation form and payed 15%. Due to financial difficulties am not able to continue payment. I enquired with them incase of cancellation if i would lose all what i paid.. they said yes and according to law! If i cancel i will lose 30% of the unit price. The terms and conditions on the reservation forms clearly says that incase of cancellation i only lose a maximum of 10% of the unit price. They refused to comment or explain this point.

 

[financier888]

Dash,
I also invested with BL properties. I only signed a reservation form and payed 15%. Due to financial difficulties am not able to continue payment. I enquired with them incase of cancellation if i would lose all what i paid.. they said yes and according to law! If i cancel i will lose 30% of the unit price. The terms and conditions on the reservation forms clearly says that incase of cancellation i only lose a maximum of 10% of the unit price. They refused to comment or explain this point.

BL are very experienced developers and are well funded. I don't think you have all that much to worry about - as developers in AJman go. These guys know what they are doing and have resources... Of course, I am not their auditor but I think you are in good hands as developers with a track record go. At the least - they have experience and know what they are doing and have already pledged that they will be in full compliance pursuant to the new ARERA laws. That's more than most. BTW - I am NOT a broker - just sharing what I know of the company. I beleive that they have also sold many of their units and with payments coming in - will build the project

 

[Dash]

Noor,

Yes I considered the same issue, my contract states the same and I am currently constulting an attourney to see what my options are, as I have already paid over 25% of the purchase price, I may try and recouperate my losses if I can.

Now if only I could find some confirmation about the Ajman government's infrastructure support; electricity promises and the return of visas would be a positive boost.

-M

 

[farha]

Hello to all,
I have read your comments regarding these projects in Ajman with interest.
I have purchase a unit in The Cavendish development which is being developed by UKCIG. The project is not due to start until April 2009 and complete 2011. This is my first purchase of UAE property and am UK based.

I would be interested to hear if anyone has any views on this developer/development as I have heard different things but not sure what to believe. My main concern at the moment is whether I can rely on the developer and whether this is a legitimate development.

 

[ajmanflat]

Dear all

I had communicated with ARRA this week, they adviced me to not pay any furthere unless its to an "escrow" account, deadline for all developers is May1st 09 to have escrow accounts.

Can someone recommend a good real estate lawyer in Ajman?

 

[siraj]

may ajman properties rest in peace.......no marmooka city cuming up...no humaid city...cuming up...only emirates city..wid only 25%completed buidlings......and dat also wid out lake..

 

[sindibad]

I guess we have to wait and see.