RAK home-owners dispute Dh137m utility fee levied by developer

Developer of Al Hamra Village cuts off water connections of those who refuse to pay fee over 8-year period

20:00 February 28, 2017
Al Hamra Village in Ras Al Khaimah
A homeowner’s water connection

Ras Al Khaimah: Residents of Al Hamra Village in Ras Al Khaimah are angry that the property developer is passing on the cost of a Dh137 million utilities upgrade to them as a fee to be paid over eight years.

Failure to pay the utilities connection fee has resulted in disconnection of water supply to several homes.

According to the notice issued to residents by the developer, Al Hamra Real Estate Development, the freehold community is undergoing a utility upgrade at a cost of Dh137 million, which will be charged to the homeowners over eight years. However, homeowners claim that what the developer calls an upgrade fee is actually a connection fee charged by the Federal Electricity and Water Authority (Fewa) to move the power supply from a private source to the Fewa grid.

Owners of 2,000 villas and apartments have to pay the upgrade fee, ranging from Dh40,000 to Dh120,000 over eight years, depending on the size of the unit.

Several homeowners told Gulf News that they have paid one-time utility connection charges when they took possession of their properties and that their contracts have no mention of any upgrade fee.

“When I took possession of my villa in 2009, I paid a utility connection charge of Dh36,000 in full and our sales and purchase agreement clearly says it is a one-time charge. When I asked the management what happened to the charges I paid, they didn’t reply. When I asked them why should I pay again, they didn’t reply. Now, they have cut off water supply to my house,” said Mary, a long-time resident.

Residents of the idyllic gated community that is home to more than 2,000 families say that the dispute has shattered the tranquility of the community as more than several families are currently living without water and more homeowners are facing a similar fate.

“This is a beautiful community and I really love living here. This is like home for most of us living here. I know residents travel to Dubai for work and come back here daily because they love it here so much. Over the last few months, this dispute has shattered our lives, because those who don’t have water connection have to depend on friends and neighbours for their daily routines and those who have not had their water disconnected are living on the edge as they never know when is their turn,” said Paul, who has been living in the neighbourhood for the last six years.

He added that some home-owners have buckled under pressure and paid the fee.

“There are pregnant women, children and elderly people living here. Not everyone can make adjustments to their routines, or challenge this arbitrary charge,” Paul said.

“The management has also denied permission to make changes to our houses before we pay the fee,” Mary said.

Al Hamra community is a microcosm of the UAE with people from dozens of nationalities calling it home, however, many are considering moving out by selling their properties, which is also not possible without payment of the upgrade fee.


Upgrade fee in the interest of home-owners, developer says

A spokesperson for Al Hamra Real Estate Development said their prime concern as master developer of Al Hamra Village is the interests of residents and owners of the properties, and of the community.

“The Fewa upgrade charge levied from 2015 to ensure a more reliable and cheaper electricity supply for all residents has been honoured by over 96 per cent of Al Hamra property owners,” the spokesperson said in a statement to Gulf News.

Responding to a query about measures like cutting off water connections of residents who haven’t yet paid the fee, the spokesperson said: “Temporary and legitimate measures were taken in order to discourage defaulting. Therefore, Al Hamra wants to encourage those defaulters to settle their due accounts in order to prevent unnecessary hardship to their tenants.”

On the subject of many property owners claiming that they received threatening emails after sending letters to the developer through their lawyers, the spokesperson said the developer is committed to continuing dialogue with home-owners that are in default on a case-by-case basis.

However, contradicting the spokesperson’s statement, a resident said: “We have tried all means to reason with the management. We tried to have a dialogue with them, we sent them letters through our lawyers, but they just don’t bother to get back. We are not tenants here, we are investors. We have paid millions to buy these properties and they just can’t levy any fee without establishing its legality.”

“We want to know how they decided on this amount of Dh137 million,” said another resident, who wished to remain anonymous.