Property Developers in Dubai Unable to repay Deposits on Cancelled Projects

Yet another Dubai property developer is in a position of being unable to repay small investors after canceling or delaying a project. This time, “Aspire Real Estate” has been forced to hand their “Jehaan” project over to a third party after numerous investor complaints and bounced cheques.

Harry Kantaria, Chairman and owner of Aspire,  is handing over his company Jehaan project to a third party. Kantaria told investors that he has sold the Jehaan project, which has been beset with problems.

He owes an undisclosed sum to investors in refunds, according to people who bought units in the project.

“One investor heard that Harry has sold the project to a third party investor. So I texted Harry and he confirmed the same to me,” one investor told Gulf News. Kantaria later confirmed this to Gulf News on Thursday.

“The project is in the process of being handed over to another party who has shown keen interest and has also met the land department regarding the same,” Kantaria said in an email.

Aspire hands off Jehaan

While the details have yet to be ironed out, the handover will hopefully spell good news for the project’s patient investors who have been battling with Kantaria for months over promised refunds.

They have been requesting refunds for Jehaan in Jumeirah Village South which was supposed to be ready by January 2009 but construction hasn’t even started. Some investors have even paid in full and yet received no contract. And genuine refunds have been scarce, investors said.

However, those who did receive their money back found that the cheques bounced and one investor said she was informed by Kantaria’s bank that there is no money in his account.

“The man at the bank told me that his account exists but there is no money,” the investor said.

Kantaria told Gulf News back in December that the project’s escrow account was set to be in place by January.

Calls made to the Aspire offices went unanswered as usual, but the scale of the problems facing Dubai keeps growing. A number of developers are being accused of failure to repay deposits and a number are also failing to honor work contracts by refusing to pay full compensation after firing staff as property development in Dubai comes to a grinding halt. The recent introduction of a property court in Dubai to help deal with the growing number of complaints against developers may help, but the tortuously written, badly thought out laws leave little room for the smaller investor to manoeuvre, especially those that have had work visas revoked after being dismissed.