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Thursday, October 21, 2021

Lusail investors in Qatar fume over delays, extra fees

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The Piazza by Damac under construction in 2014
The Piazza by Damac under construction in 2014

Eight years after signing up to buy property at the under-construction Lusail City, investors in one part of the Qatar development are complaining about being hit with a new round of fees for their “luxury” apartments, many of which they say are substandard.

Dozens of buyers began putting down payments for flats in what was portrayed in 2006 as an upscale residential development in the Fox Hills district of Lusail.

Built by Dubai-based contractor Damac Properties, The Piazza complex is described on the company’s website as “one of the finest real estate development opportunities in Qatar.”

Damac development of Lusail in 2014.
Damac development of Lusail in 2014.

However, the Fox Hills Piazza development has been beset by lengthy delays over the past few years. Numerous promised completion dates have come and gone, and many who have tried to contact Damac for an update say they were repeatedly ignored.

Several investors said that until recently, they also had not been allowed to assess the development’s progress in person, or even view a show-home to understand the layout and standard of decor.

Now, they are being hit with vague charges of up to QR500,000 for homes that they claim fall well-short of the advertised promise.

‘Average’ apartments

Last June, Doha News reported on the frustration felt by several of the buyers, as they desperately tried to get Damac to respond to their appeals for information.

Original artist's impression of The Piazza
Original artist’s impression of The Piazza

The developer finally contacted the buyers late last week to tell them that the complex had received its building completion certificate, and asked them to clear all outstanding payments before handover.

However, when buyers went to the site and were allowed inside for the first time, many said they were shocked at what they found to be what one investor described as “common-or-garden apartments in average buildings.”

In a statement to Doha News, a Qatari investor said:

“The quality (of the apartments) does not match the promises of the advertising and sales campaign such as: ‘state-of-the-art,’ ‘unique exterior,’ ‘high class residential complex,’ ‘uncompromising quality standards’ or ‘opulent interiors.’

During my visit, no landscaping had been attempted and the focal Piazza is non-existent.”

He said the apartments had no permanent electricity or water connections (generators have been set up in the area), and while the access road to the site is now paved, it is unlit and runs through ongoing constructions sites filled with heavy traffic.

“Damac may have received their Building Completion Certificate, but the properties are not yet ready for handover and occupation. Even so, Damac are rushing to force buyers to comply with the bits of their contract that suits them, while ignoring parts that don’t suit their drive to collect money,” he added.

The investor said that his decision to invest in the Piazza development had been based on having visited several Damac complexes in Dubai, which he considered to be high quality. However, the standard of construction and finish at the Lusail development fell far short.

“Why have they been allowed to deceive and cheat their customers in Qatar?” he added.

According to other buyers who viewed their apartments for the first time late last week, there are no phone or internet connections, provision of utilities such as power and AC is provided through temporary measures, access to garages are unsafe and there is no landscaping.

The Piazza development in 2014
The Piazza development in 2014

When Doha News visited the site last summer, the supposedly exclusive environment of Fox Hills was nothing more than empty stony desert dotted with huge spoil heaps.

While some development on surrounding sites is now beginning, it is still a long way from the original artists’ impressions of the district.

Extra charges

In addition to the delays, investors said they are now being hit with large and unexpected fees.

One buyer told Doha News that Damac built an apartment that was more than 50 percent larger than he signed for, without his permission or agreement. Last week, the company sent him a bill for extra fees and penalties totaling some QR760,000.

In 2007, the investor, a Turkish national named Tolga, began paying for an 84 sq meter, one-bedroom apartment at Lusail for a cost of QR937,000.

He said that the handover documents he recently received from the developer state that his flat is 131 sq meters and would cost an additional QR495,887. The documents do not include any floor plan of the new, bigger apartment, or an explanation for the change in size.

Speaking to Doha News, Tolga said:

“I didn’t ask them to increase the size of my apartment and they didn’t ever ask me. Throughout construction I never heard anything from them.

There is no way I want an apartment this size, and I can’t afford to pay for it. All I want is the one-bedroom apartment I bought originally.”

Like many other investors, Tolga financed the purchase of his apartment through a mortgage with Arab Bank.

Sign to Lusail's Fox Hills
Sign to Lusail\’s Fox Hills

However, in what is understood to be an ongoing disagreement between Arab Bank and Damac over installment payments, investors say the bank has refused to pay Damac until the developer explains its demands.

As a result, Tolga has also been hit with late payment penalties of QR260,000 by Damac. The developer has said he would not get his apartment until all outstanding penalties are cleared.

Having spent around QR300,000 so far, “that’s a lot to lose if I drop out,” he added, continuing:

“What they are doing is ridiculous.I can’t find words to describe Damac’s treatment of me. They are sucking our blood. We bought and we trusted them. We waited patiently when they ran years late in construction.

I have spent so much money. They took our money and now all they want is more money.”

Late penalties

Another investor who has been hit hard for late payment penalties is a Qatar-based resident who asked to be referred to by his initials, ML. He signed up for three studio apartments back in 2007. Now, Damac has invoiced him QR480,000 after Arab Bank’s refusal to make payments.

He told Doha News that the latest advice from his bank was to pay half of the demanded penalties and sell the apartments. But he’s reluctant to do so:

“I have already spent QR800,000 on these, and I can’t sell them without making a significant loss. I really can’t walk away from that sort of money.

I didn’t receive any project updates from Damac in seven years, and for two years, they kept telling me completion would be ‘in three months.’ When they finally contact me, it is with this,” he said.

It is understood that a number of the investors are seeking legal advice on the issue.

Damac Properties has not responded to requests for comment from Doha News.

In January 2013, local media reported that an unnamed investor in The Piazza successfully took Damac to court in Qatar for failing to deliver his apartment on time.

Damac was ordered to repay to the investor QR703,600 to cover his initial down payment for the QR1,759,000 property, plus an additional QR100,000 as compensation.

Many other investors caught in a similar situation doubtless hope that this previous case may help their own situation, though that remains to be seen.

Have you bought property in The Piazza development? Thoughts?

64 COMMENTS

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Mr. Reason.
Mr. Reason.
6 years ago

Sorry state of affairs.

Yacine
Yacine
6 years ago

I just cannot believe what these people are going through. If all this is true, then there is only one solution. The state of Qatar should step in and seize the whole development and eject Damac. Another company should be tasked to finish it and Damac should not get one more penny from Qatar or the buyers.

Deepak Babu
Deepak Babu
6 years ago

Do they have Class Action LawSuits in here?

MIMH
MIMH
6 years ago
Reply to  Deepak Babu

Only if you upset enough Qataris and they complain to the Emir. For expats you are on your own.

Michael Fryer
Michael Fryer
6 years ago
Reply to  MIMH

Isn’t Lusail ultimately owned by the Qatar Investment Authority (through Qatari Diar etc etc).

Chairman of the Board: Sheikh Abdullah bin Hamad al-Thani (the Emir’s half brother)

Vice-Chairman of the Board: Sheikh Ahmed bin Jassim bin Mohamed al-Thani

with the following making up the rest of the Board.

Ali Sharif al-Emadi
Sheikh Abdullah bin Saud al-Thani
Hussein Ali Al Abdullah

Let me know how your class action lawsuit goes.

MIMH
MIMH
6 years ago
Reply to  Michael Fryer

I think that was meant for Deepak and of course no chance against those people.

Susan
Susan
6 years ago

This is precisely why you should not invest in Qatar. Shoddy construction, repeated missed deadlines, lack of communication, no transparency in anything. You’d be a fool to think that these things will change anytime soon.

Rahma
Rahma
6 years ago
Reply to  Susan

Having lived in Dubai for many years I can say that many buildings had to be completely demolished before they were rebuilt. I wonder if it will be the same here.

Kz
Kz
6 years ago
Reply to  Rahma

Was DAMAC involved in those buildings?

Rahma
Rahma
6 years ago
Reply to  Kz

Not necessarily

Sher
Sher
6 years ago
Reply to  Kz

Damac sold 560 units in 14 buildings to people on the project first launched in 2006 they had neither posession of the site nor the necessary permissions to build for at least another 5 years but they still took up to 40% of peoples money upfront all those years ago. The delivered buildings are about 560 units in 8 buildings and there are lots of still too many unexplained deviations from the original plans emerging on the ‘handover’. Why do lots of questions remain unanswered on this ‘very secret’ project? It seems Damac just will not reply.

Sher
Sher
6 years ago
Reply to  Sher

Here is an extract from their ‘deed of Adherance’ which must be signed by the purchaser on handover of the apartment and contains lots of very exciting and contentious insights they don’t want people to know about. l/we hereby unconditionally and irrevocably confirm that l/We shall not disclose any of this terms of this Letter of Discharge and Adherence to any third party.

fullmoon07
fullmoon07
6 years ago
Reply to  Susan

and no law on the side of those who are tricked and invested their money!

Investor
Investor
6 years ago
Reply to  Susan

Oh please don’t invest in Qatar, less demand from you means less investment price for us which therefor brings in more returns on investment. But don’t come back complaining about your rent Susan.

MIMH
MIMH
6 years ago

Well this is hardly a surprise. My folder of ‘I’m not surprised’ is overfollowing at the moment.

After the debacle of the Pearl did these people think it would be any better? There is no legal recourse in Qatar for expats, so if something does go wrong you have had it. Then again a fool and his money are easily parted so they only have themsevles to blame.

Legal Eagle
Legal Eagle
6 years ago
Reply to  MIMH

Can’t agree that there’s “no legal recourse in Qatar for expats”. Justice is slow, that we know. But to say it is non-existent is not correct. I should know – I’m a lawyer!

zoeval
zoeval
6 years ago
Reply to  Legal Eagle

Slow justice is pretty much no justice. Eg Villagio, kefala system etc etc.

MIMH
MIMH
6 years ago
Reply to  Legal Eagle

What is your professional opinion then if expats decide to pursue legal action against the developer? A possible win?

Michael Fryer
Michael Fryer
6 years ago
Reply to  Legal Eagle

Just out of curiosity, if an expat were to initiate legal action against Damac in this situation, would s/he then be under a travel ban until the conclusion of the legal proceedings?

Kz
Kz
6 years ago
Reply to  MIMH

The article itself says that an investor took DAMAC to court and received compensation. Seems you read only the first half of the report and then went on your ignorant tirade. So typical of you.

MIMH
MIMH
6 years ago
Reply to  Kz

Yes reported in a local paper. Shall we guess the nationality of the citizen that won his case……

Ali
Ali
6 years ago

I invested in fox hills and tried to file a law case for Damac’s delay in 2011. The case was weak since Damac blamed the main developer “Qatari Diar” for delaying the development of infrastructure. I doubt anyone would be able to win a lawsuit against Damac, their contract is bulletproof.

Would be good if all investors connect and agree on a set course of actions.

RHB
RHB
6 years ago
Reply to  Ali

I heard there is a group of 48 investors are connected under the name Damac Group, but I could find any way to join this group so as to constitute a big pressure group at least at this stage to press on Damac properties to exempt us from the so called penalties!!!!

Ali
Ali
6 years ago

I was planning on getting an apartment in Lusail, thinking it would be a great place to move to. I am pretty sure this is not only Damac’s fault, delays are regular in Qatar in relation to getting permits. If it takes 2 to 3 months to get a business registered in Qatar then I can imagine how much time it would take to get permits for construction specially since the Civil Defense is being really strict. However a legal action towards Damac is justifiable for increasing the size of the apartment and asking for more money plus the penalties. System needs to change here and people do need to get more rights, this is very unprofessional and unfair. I wonder how they will meet the Worldcup 2022 deadlines?

Daniel Schriefer
Daniel Schriefer
6 years ago
Reply to  Ali

They won’t.

KK
KK
6 years ago

Another snakepit. I would NEVER EVER invest a single penny in real estate in the region. Investors try to make a quick gain; sorry but the risk is yours and you knew it.

desertCard
desertCard
6 years ago

As an expat you don’t actually OWN anything. We’re not allowed. It’s just a very long term lease.

Carmen
Carmen
6 years ago

I invested also but cant repayinstalment and fines. I am willing to join a group interested to raise a court case.

Cheryl
Cheryl
6 years ago
Reply to  Carmen

We invested also & going through same thing. We really do need to form a group there’s a lot more power in bigger numbers. Anyone interested in joining the group?

Piazza 2
Piazza 2
6 years ago
Reply to  Cheryl

Cheryl there is already a group of around 40 – what is the link to your facebook page or name of group?

Adam
Adam
6 years ago
Reply to  Piazza 2

Can you post the link? I also have the same situation with Damac

Desert_duiker
Desert_duiker
6 years ago
Reply to  Piazza 2

I would also like to join the group. Similar to Tolga in the article, I’ve been given 45% larger apartment than I signed up for and now am being asked to pay for the bigger floor area which I don’t want and can’t afford. Please post the name of the Group

Kdoha
Kdoha
6 years ago
Reply to  Cheryl

What’s the group name? We need to make a stand on Damac

Cheryl
Cheryl
6 years ago

I agree Ali all investors should get together.

Bo
Bo
6 years ago

Shocking. It sounds like the developer is late and over budget and is trying to charge their clients to cover the cost of their delay and poor management. I hope the example of a fellow investor winning through the courts is something that the others can draw upon in their contracts and the developer gets what’s coming to them.

fullmoon07
fullmoon07
6 years ago

Didn’t it happen with The Pearl something like this? Delays, extra charges, the quality of materials not matching how much buyers are paying….plus Damac has a reputation to do things sloppy like this. Be aware before you invest your savings here!!!

Cheryl
Cheryl
6 years ago

Guys I have shared this publicly on Facebook. I am trying to get a group together of all people who have invested in this. Can you please look for it and send me a comment if your interested in joining the group. If we all work together on this I’m sure Damac will have to do something. Also can you share it to so we can reach as many investors as possible. Thank you.

DohaStans
DohaStans
6 years ago
Reply to  Cheryl

Can you share the link please. Thanks

Ryan Miller
Ryan Miller
6 years ago
Reply to  Cheryl

No… even if you all join together, nothing will happen. The only hope that you have is having a high-up Qatari national join you in a class-action lawsuit. If your investing, well-connected Qataris decide to pursue restitution individually, then you’re screwed.

TM
TM
6 years ago
Reply to  Cheryl

Cheryl, I still cannot find teh group in facebook. What is the group’s name ? Anyone knows?

Piazza Lusail
Piazza Lusail
6 years ago
Reply to  Cheryl

I have created this page for all of us. Could you please share with all interested:

The sooner we do the sooner we find solutions I think..

https://www.facebook.com/groups/907766069287528/

Daniel Schriefer
Daniel Schriefer
6 years ago

Investing in Qatar is like buying a plot on the Moon.

Ibrahim Ali
Ibrahim Ali
6 years ago

Have some dignity and act your age. But then if you did, you wouldn’t have a girl-friend while being married with a daughter :O.

ShabinaKhatri
ShabinaKhatri
6 years ago
Reply to  Ibrahim Ali

Deleting for personal attack.

KK
KK
6 years ago
Reply to  Born free

I can only but confirm that the real estate sector is ‘managed’ by the Egyptian-Palestian-Lebanese maffia.

ShabinaKhatri
ShabinaKhatri
6 years ago
Reply to  KK

Deleting for irrelevance.

Shabzed
Shabzed
6 years ago

Two minutes of silence for those who thought Lusail will become Manhattan of Qatar.

Michael Fryer
Michael Fryer
6 years ago
Reply to  Shabzed

I remember the old days when the Pearl promised to rival the French Riviera. Who needs a trip to St Tropez when we can go to The Pearl?

Born free
Born free
6 years ago

I have just bought two properties in Makati in the Philippines within the Central Business District, absolutely light years ahead of Qatar in regards to build quality, handover times and I actually got what I paid for. We had some problems with plumbing issues, however we did not have to pay the final installment until we signed off the punch list for final handover… don’t waste you money here, if your looking for an investment plenty of other markets which are much more mature and more honest.What I don’t understand is the fact that DAMAC is known to be … slippery, you or anyone with a search Engine could of found that out years ago before committing..

SullyofDoha
SullyofDoha
6 years ago

Real estate investment and speculation in the GCC is a fool’s paradise.

Expat
Expat
6 years ago

Investing in private projects like this and The Pearl are always bad decisions. I disagree with the people who are saying that investing in Qatar is a bad idea and that there are no rights for expats. 10 years ago a sq. ft. of land in Al Aziziya (off Al Waab) was being sold for QR 50 now you’d be lucky to find the same for QR 500-550. The same goes to Muaither, Abu Hamour, Thumama etc. The point is not to invest in a – what I call – fake plots that are managed by huge real estate companies that are owned by the big daddies!

Guest
Guest
6 years ago
Reply to  Expat

This is true, but it is not exclusively in Qatar. Any fast developing city will give a good return on investment over a plot of land as the city expand.

Point is, while your argument is true that investing in Qatar is a good idea, an expatriate who comes from rapidly developing countries (India, Pakistan, or Philippines to name a few) might be better off in investing over a plot of land in their home countries.

Lastly, not sure if they have changed this but, expatriates are not allowed to purchase land plots unless if it is in the “designated” areas e.g. The Pearl. So, it’s again a thumbs down for foreign investors.

A_qtr
A_qtr
6 years ago

Dubai real estate developer promising high returns on an empty plot of land in Doha.. If you believed that I know a Nigerian prince who would like to lend you money

Yacine
Yacine
6 years ago
Reply to  A_qtr

No. There is also Qatari Diar in it, as well as the whole state of Qatar because Lusail is also the property of the Qatari government (I mean the land plot not the project). So comparing this to the Nigerian scam is a tad exaggerated. I’d still blame people for making this investment or any investment in Qatar for that matter. Unfortunately laws and business practices here are of another age. If you add to that the sad state of the judicial system, I would not call this a good environment for investemnt.

CeePeeEm
CeePeeEm
6 years ago

What is happening to Dubai developers who start “developing” in Qatar? I believe Dubai has stricter standards and why not follow the same here?
Look at the fate of Dubai Towers by Sama Dubai; it is an eyesore for the Corniche skyline. And now Damac, who thought they can unilaterally increase floor space by 50% and charge the customers during handover, without even informing the customers upfront …

Truth101
Truth101
6 years ago

Anyone choosing to spend that kind of money,or any kind of money for that matter,on real estate in this country,is just plain foolish. Nothing more to it.

The Reporter
The Reporter
6 years ago

This seems to open a new chapter in property speculation. An expat buying “off-plan” is always taking a risk whatever the country, but an expat buying “no-plan” in Qatar is surely bordering on lunacy. Censor me for stereotyping if you will, but from my experience in construction and property development in the Middle East I simply wouldn’t trust any developer from any country with one Riyal of my money until I’d checked that the water came out of the tap and the lights worked. In short I would never buy anything that hadn’t yet been built.

al-Lalal
al-Lalal
6 years ago

Investors in local real estate, that’s an euphemism for stoopid eee-dee-ots

MarkDoha
MarkDoha
6 years ago

Pop…is that the sound of a bubble bursting. I feel really sorry for those who invested in Lusail, but come on where are the anticipated 260,000 residents expected to come from? The population may be growing now, but once the infrastructure projects are completed what happens then?

The Voice
The Voice
6 years ago

Not surprised to read this article from a developer from Dubai.

Did you know the Athletes Village that was built for the 2010 Commonwealth Games in New Delhi, India was built by EMAAR. Another developer from Dubai. EMAAR was penalised for structural defects, and inadequate amenities including insufficient power and waste supply for the apartments that housed the delegates from 71 countries that participated in the Commonwealth Games. Read this: http://www.ndtv.com/india-news/cwg-scam-emaar-to-be-penalised-rs-183-crores-for-athletes-village-436772?site=full

Why doesn’t the Qatar government fine the developer?

Emilia
Emilia
6 years ago

I am Emilia here – On the 15 of May 2015, I received a courier letter from Damac (Addendum) asking me to pay
an additional amount as they have increased the total area of my apartment, FLO/1/106, The letter states that I should sign on it within 7 days from the receipt date. First of all I have not been advised that they are increasing the total area, secondly I have paid 80% of my purchase price and now with the increased figure I am unable to meet their additional demand. My email is jacin_70@hotmail.co.uk, I would be keen to get advise, as to what happens in the event I will not pay the additional amount demanded. Please I would like to join this group, and cooperate with all who have invested in Lusail..

Piazza Lusail
Piazza Lusail
6 years ago

Dear friends,

This facebook group was created for all of us who share the same situation. Look forward to your collaboration to get our “keys” to our units soon!

https://www.facebook.com/groups/907766069287528/

Please join and share with others you know.

CJ_Doha
CJ_Doha
6 years ago

Has anyone taken handover yet? Do you know of someone who is either living or renting at The Piazza – Lusail?

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