Lusail investors in Qatar fume over delays, extra fees

The Piazza by Damac under construction in 2014

Lesley Walker

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.

Lesley Walker

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

Damac Properties

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

Lesley Walker

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

Lesley Walker

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?

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