Sunday, June 29, 2008

Did I miss much?

Back in Dubai and, although I checked in once in a while to the UAE Community blog and the newspapers, I feel completely out of touch because things change so quickly here.

The UK announcing the highest terrorist alert warning for Dubai was the big Dubai item in the papers while we were there, although the response here seems to have been a yawn.

Waiting in my home e-mail box when I checked it this morning were three particular news items which friends thought I'd be interested in. They're three that I hadn't seen while we were away and if I'd been here I'm sure I'd have posted about them.

They were the Defence Roundabout bridge collapse, a story on damage being caused by the roadworks at The Springs and the property ownership/residence visa saga.

Thankfully no-one was killed in the bridge collapse, although five workers were injured. According to the RTA a five metre section of the under-construction bridge collapsed because of "miscalculations on the part of the contractor as a result the pillar and the scaffolding could not take the load of the bridge."

The Springs parallel roads development is not only causing angst because it changes the property from what buyers were led to believe it would be. It's apparently causing physical damage too. Heavy machinery is making villas shake and cracks are appearing in the walls.

I know, we have the same problem in Dubai Marina - tomorrow I'll post a photo of the effect the machines have on nearby buildings.

There's a second theme to this story too, one I've talked about before. All the authorities say the new developments are not their responsibility because they're private developments.

In this case the roads are being built as part of the RTA's huge parallel roads project but their comment was 'Talk to Emaar' (the Master Developer). Of course it's the old Catch 22 because Emaar says the roads are managed and regulated by the RTA.

You get dizzy going round in circles.

And the big one, the property ownership/residence visa saga rears its head again.

This time it's a mixture of inaccurate and irresponsible reporting, apparent confusion about the rules as they exist and another confidence dent for Dubai as an honest place in which to do business.

Basically the story says that residency visas based on the ownership of property will be replaced by short term, presumably visit, visas.

That actually isn't what the quoted official, Marwan Bin Galita of Dubai Real Estate Regulatory Agency (Rera), said. Here's the beginning of the Gulf News story:

Dubai is to introduce a set of short-term visas for foreign investors in the real estate sector, a top official said.

"We have submitted the proposals to this effect to the higher government authority in Dubai to review the visas for property buyers."


Mr Galita says that he has submitted a proposal that the rule is reviewed, the paper says 'Dubai is to introduce' the change. Those are two very different things, which the 'journalist' and the Editor should have seen.

The story goes on that Mr Galita's comments "reverse the government's earlier stand."

Mr Galita is Chief Executive of Rera, not a member of the government. I thought that only Sheikh Mohammed Bin Rashid had the authority to overturn previous government decisions.

I can't believe they've understood Mr Galita correctly either, because I'm sure he must be aware of the arrangement in place for property related residence visas. They quote him as saying:

"Even if the investment company applies for a residence visa for a buyer...If a development company goes bankrupt, what happens to the residents sponsored by that particular company?"

That suggests that he thinks any developer can apply for a residency visa for its buyers, and I'm sure he knows the arrangement as well as everyone else. Only the three Master Developers, Nakheel, Emaar and Dubai Properties, can apply for a residency visa, which is the arrangement put in place when freehold property was opened to foreigners. No other developer has this arrangement.

In amongst the misleading and confusing reporting there are some facts. For example, the report does explain this arrangement between Master Developers and residency department, it does say that the residency visa is not an automatic right. Overall the story is a mess.

In short, someone buying property who wants a residency visa must request the Master Developer to apply for it. If they agree to do so, the Residency Department will then decide whether to issue it. It is not an automatic right as many small developers have advertised and only the three government owned Master Developers have the arrangement.

That doesn't mean that the arrangement won't be changed of course, even though it means that what people bought and payed for is not what is delivered to them. It wouldn't be the first time people have been sold something, their money taken and then a very different product delivered.

It's a big problem for Dubai, when its future depends on business, a vital and huge part of which is real estate, business depends to a large extent on confidence but confidence & trust in Dubai as an honest place to invest keeps taking a beating.

A definitive, final, clear-cut statement from the government about this property/residence issue is urgently needed.

Here are the original stories:

Bridge collapse
The Springs.
Property/Residence

11 comments:

Keefieboy said...

Yay! Welcome back. This visa shit is, well, shit. How can you own a property and not have an automatic right to live in it? And how can you own a property but not be able to bequeath it to your kids? Crazy, crazy, crazy.

Seabee said...

Keefie, you're posing logical questions to illogical minds.

dubaibilly said...

Welcome back Seabee, I echo Keef's questions, now I may be wrong but I was further under the impression that if you own property here, you cannot sell it to whoever you want, it has to be sold back to the major developer and at a price set by them!

I certainly shan't buy here!

dave said...

Hey Seabee, whilst you were away did you hear the one about 2 blokes in a bar in Abu Dhabi? Apparently this is what caused the upgraded terror alert..... Can you believe it??
Welcome Back.

Anonymous said...

W E L C O M E B A C K :)

Seabee said...

DB, no that's just a rumour. Owners can sell to who they like - that's what the 'secondary market' is all about.

Dave, yes I heard that story, and the tear gas in Dubai clubs stupidity.

alexander... said...

WB SB!

The visa report is confusing, isn't it?

But it does underline just how much right in law property 'owners' can enjoy - and how consistent we can expect the delivery of the original promises made by developers to be...

ZeTallGerman said...

""Hey Seabee, whilst you were away did you hear the one about 2 blokes in a bar in Abu Dhabi? Apparently this is what caused the upgraded terror alert..... Can you believe it??""
Yeeeeeeeees, sure. That's the reason. Of course. The UK government decided to raise the terror alert because of 2 blokes in a bar. I better be careful what I say next time at the hairdressers... otherwise the German embassy might ship all of us out of the Gulf! Nice try for a cover-up, UAE media ;-)

Seabee said...

A sign of the times isn't it - a couple of drunks in a bar think it's fun to talk about bombing things so the British FO panics, a couple of guys in a nightclub think it's hysterical to tear gas the other patrons...

Anonymous said...

Hey Keefie,

You've posed a great question about not having an "automatic right" to live in a property you own.

What this guy Ghalaitha is saying is that such a "right" as you describe it doesn't exist in any country. For example, say an Iranian buys a flat in London, would he be given a permanent residence visa to live in the UK? I doubt it, but of course I could be wrong.

I know many UAE nationals who have property in London, but every year they have to apply for a visa to visit London.

It's much the same thing that this fellow is talking about.

Sure, this visa shit is shit, and my guess is that it may not come to fruition.....pretty soon it will all be forgotten and be a non-starter.

What's unsettling, though, is for them to be thinking along these lines....which could result in such a law ultimately coming into effect.

Seabee, if you recall, upto around the mid-70s, to do business in Dubai did not require a local partner. But all that changed in 1977 and since then to do business in Dubai requires a local partner. Sure, back in the 70s, everyone was up in arms about this law, but it did come into effect, and everyone had to live with it. Same thing in the case of property ownership.

Seabee said...

anon, you're right about residency in other countries of course, but the point is that in Dubai it was stated as official policy when freehold for foreigners was announced. There would be no complaint if they had not made it part of the deal, but if they change it now it's another example of selling something, taking the money and then delivering something different.

The local partner thing is slightly different because it doesn't involve people's personal money, but it's another example of the constant change in laws. The six month ban after leaving a job was another one that suddenly appeared in the early eighties.