Dubai: Residents, investors in shock as real estate project marked 'under cancellation' after 19-year wait

view original post

Hundreds of property buyers are desperate for answers, facing an uncertain future and fearing the loss of their investment after a project — that was first launched 19 years ago in 2005 — was recently marked as “under cancellation” by the Dubai Land Department.

For 17 years, Dubai resident Bibhu has longed to see his dream home in the Lily Zone at the Dubai Lagoon site in Dubai Investments Park (DIP). He invested in the property in 2007 and, to this day, is still trying to gain clarity about the construction status of the now-abandoned site.

Bibhu is one of at least 111 buyers anxiously awaiting the completion of the project, hoping for either its successful delivery or a refund of his investment.

Stay up to date with the latest news. Follow KT on WhatsApp Channels.

<!–

–>

Launched by Schon Properties, Dubai Lagoon comprises 53 mid-rise buildings with 4,166 units boasting a range of options from studios to four-bedroom apartments. Early reports cited its developers was among the first to offer a guaranteed completion date — with financial penalties in favour of the new homeowners if it was not met.

In March 2006, it was announced that the project’s first phase was completely sold out a mere 54 days after its launch. The first-phase construction was set for completion by September 2007 and handover by 2008.

However, the mixed-use development faced a series of challenges, plagued by financial difficulties and stakeholder disputes, ultimately leading to its failure to meet the deadline.

Investor woes

For years, hundreds of investors were left in the dark, receiving no updates on the status of their properties from the developer. In 2017, the Dubai Land Department and the Real Estate Regulatory Agency (Rera) intervened, hoping to bring the investors some closure. The Lily Zone project was then handed over to Xanadu Real Estate Development for completion. However, investors soon realised that Xanadu’s assurances to complete the project within two to three years were also not to be.

Heather Copland had dreamed of owning a home in Dubai for 16 years but left the emirate in June 2023 without fulfilling that aspiration.

“I bought a one-bedroom apartment in Zone 3, 704 Lily, as a second buyer in September 2007, paying Dh584,250 plus a Dh10,000 parking fee to Schon Properties. When construction stopped, Xanadu Real Estate Development took over, promising to complete the project within 2-3 years,” said the British citizen.

“We investors were encouraged to pay the remaining balance on our payment plan and the car parking fee to help expedite completion, which we did in full. Additionally, my Oqood was paid to Xanadu, though I am unsure whether they registered and paid the Dubai Land Department (DLD),” Heather explained.

“We are losing hope, as we fear the money [is gone], and there are concerns that the buildings, which have been exposed to the elements for over 10 years, may no longer be financially viable for potential investors to complete.”

Bibhu said, “Building D20 in the Lily Zone is complete, and many investors have paid the full amount for their units. For years, Xanadu told us that the lack of a proper access road is delaying the handover. We went back and forth, and were in total shock when we first saw the project had been cancelled.”

The 54-year-old Indian expat, who came to the UAE in 1998, paid 75 per cent of the property’s value for his one-bedroom apartment. “I have been waiting for my home for so long, but am now losing hope of even getting my money back, especially since I don’t have the sales and purchase agreement (SPA) or Oqood.

“I am just shocked at the prospect of losing everything after 17 years of long and painful waiting. Who will be responsible for all of this?”

No answers

Dubai Lagoon, covering 5.7 million square feet and divided into zones, was one of many real estate developments affected by the 2008 financial crisis.

The project’s status on the Dubai Rest app was initially updated to “cancelled” on October 6. As investors scrambled to understand the implications, the status was later changed to “under cancellation” on October 22. [What is the difference between a project being listed as ‘cancelled’ vs ‘under cancellation? Read our explainer here.]

At the time of publication, Khaleej Times continues to await a response from DLD after repeated requests for clarity on the project’s status.

Meanwhile, calls to Xanadu representatives received no response. One representative even denied working with the developer despite a clear indication of his interaction with investors. Questions from Khaleej Times were met with a refusal to explain the reason for the cancellation or identify who would be responsible for repaying the affected individuals. Emails sent to the customer care address listed on the website also bounced back, despite repeated attempts.

What about refunds?

In May 2015, Hani Gandhi bought an apartment (A19b) from Schon Properties, with promises of completion by December 2017. The Netherlands resident paid 90 per cent upfront and registered the property with the DLD in 2016. However, after numerous follow-ups, he learned the project had been transferred to Xanadu, which assured completion by December 2020.

In 2018, Xanadu requested the remaining 10 per cent, again promising completion by 2020. But after payment, progress stalled, with Xanadu blaming other entities. On October 6, 2024, Hani discovered via the DLD app that the Lily project had been officially cancelled.

“I made frantic calls, wanting to know what would happen next. A DLD call centre executive suggested that I start the refund process and a judge committee would soon begin hearing the case. I have since submitted a refund application.

“Soon after this, we noticed the Lily project was marked “under cancellation”. After some calls, I learned that Dubai Courts had blocked the units under Schon Properties. A DLD representative explained that the project was awaiting a decision from the courts, with two possible outcomes: either the project would be transferred to another developer, or investors would receive refunds. However, if the project remains “under cancellation,” the refund process cannot proceed,” Hani concluded.

Omran Ali Juma, a 30-year-old Emirati investor, is unhappy over the stalled project. In 2018, the young investor bought a studio apartment from a reseller and paid the total amount in cash, hoping to secure his future.

<!–

–>

–>