If only we all had the luxury of open-ended contracts which developers in Dubai and Ras Al Khaimah seem to be able to use with impunity, life would be so much simpler. It would be a lot easier to sell our unwanted gifts on ebay by getting buyers to accept very flexible and loosely worded terms and conditions of purchase, which means buyers would have very little recourse of compensation in the event of items having been ‘creatively’ described. 
But there is a problem - on ebay the negative feedback from dissatisfied customers that will build up against our profile will mean that soon nobody will be willing to buy from us. Unfortunately this model does not apply to Al Hamra Estates, as they seem immune to any amount of negative feedback, and continue to market their merchandise with open-ended contracts designed mainly to protect themselves.
The matter of service charges which every investor will eventually have to face up to is just such an example of the use of ‘creative’ contracts by Al Hamra Estates. Investors may recall that very little information was provided on this matter and generally kept low profile even when questions were asked. With information gleaned from various sources, we will however attempt to summarise the possible charges that investors will have to cough up on handover of their unit.
A Single Offshore Company License Fees
The freehold within Al Hamra Village is based on a single offshore company license, plus yearly fees to be paid to the Ras Al Khaimah Investment Authority. First year charges quoted by Al Hamra early 2007 were AED 2,500 for studio, 1-bed, 2-bed and 3-bed units, and AED 5,000 for Townhouses, Duplexes and Villas
Project Maintenance Fees (figures for the first year)
These were originally estimated as AED 7 per sq ft for apartments, and now have been increased to AED 10 per sq ft. Figures for Townhouses and semi-detached duplex villas were originally mooted to be AED 520 per month, and for luxury villas type B & C AED to be AED 840 per month
Connection Charge (electricity & water)
AED 1,000 (refundable meter registration) plus AED 300.00 per KVA*(load of your particular unit) - one time payment.
Registration Fee
2% of the purchase amount on completion & full payment of the unit (one time payment to the Land Department of Ras Al Khaimah).
Visa (optional)
AED 4,000.00 per person (includes administrative fee, medical, visa, transportation, etc.
So taking a one-bed, 1000 sq ft apartment costing AED 550,000 as an example, the costs stack up as follows:
Offshore Company License Fee AED 2,500
Maintenance Fees AED 10,000
Connection Charge AED 5,000
registration fee AED 11,000
This brings the total to AED 28,500. The charge has already gone up from AED 7 per sq ft to AED 10 per sq ft, so the total figure for the first years associated charges stacks up to a whopping £4,750 for our friends over the channel (based on an exchange rate of 6.0).
Let's hope the dream that is Al Hamra Village lives up to expectation and is worth the money we will be forking out to pay the service charge.
Sunday, 2 March 2008
The Case of the Elusive Service Charge
Tuesday, 19 February 2008
The Mystery of the Royal Breeze
In many countries the divide between the rich and poor remains wide as ever, with little prospect those on the upper rungs of the wealth ladder loosening their grip lest that those at the bottom might climb up a little. Whether this is the case in Ras Al Khaimah we leave readers to consider. But one thing is certain; the Al Hamra Village resort has been blessed with the privilege of experiencing the Royal Breeze. Mind you, the prospect of this not happening is quite distinct, given the track record of inaccurate information emanating from Al Hamra Estates.
So what exactly is the current status of the Royal Breeze development at Al Hamra. The best we can do is submit a recent report filed by a poster on the Eye on Worldwide forum, who says that after lots of emails to Al Hamra he eventually managed to get the following basic information:
- Al Hamra Estates says it does not have the facility to keep customers informed of progress (photos, etc) and this service is not included in their customer care department scope of work.
- Phase 3 is still under piling stage and construction standard will be similar to the existing Phase 1 & 2 buildings
- Phase 3 is scheduled to be ready within 3 years
- Prices of properties purchased in the years 2004-2005 at Al Hamra have risen by 2.5 times
- Al Hamra Estates never gave, and shall never give any compensation to any party whatsoever, no matter what the reason, this is their policy and they cannot change it.
We cannot but help repeat one posters advice: As the saying goes, “prevention is better than cure”, so keep asking and monitoring to ensure you get what you signed up (and paid) for. No use complaining after the event.
Monday, 18 February 2008
Power Supply Crisis
One does not need to be a rocket scientist to understand that keeping customers updated on the progress of investments they have made in your company is of the utmost importance if you are to keep them onboard, and if you want to ensure your company maintains a good profile. This simple fact seems to have eluded those in charge of running Al Hamra Estates. One comment posted by an investor sums up Al Hamra Estates position rather succinctly - “from Al Hamra there is only one reaction: nothing”. Another poster observes “vague suggestions that something will be done in 6 months are no different than the meaningless approximation of project completion dates”.
The latest rumour circulating on discussion forums revolves around the power supply (or rather lack of it) situation at Al Hamra. And rightly so, for without power any progress comes to a grinding halt. Even by UAE standards the delays faced by investors at Al Hamra Village are unprecedented. We can only conclude that somebody has seriously goofed here - either the developer is not liaising properly with the government regarding energy supplies or the government has not been forthcoming or knowledgeable about its own resources. In many countries there would be calls to instigate investigation into incompetency, corruption, etc. if such a thing was to happen.
We can only speculate (in the absence of any information from Al Hamra Estates) that in the short term, temporary solutions such as the use of water borne generators may be the answer. In the long term, there is undoubtedly an urgent need for new power plants to meet the growing demand for energy in RAK. Such facilities are unlikely to be ready until about the time Royal Breeze is completed, 3 or more years from now. In any case, it would it at least 18 months before any new plants could be built and in operation.
Some investors are saying that problems with FEWA will be resolved soon, even within the next 3 to 6 months. Others however are of the opinion that because of the large number of new developments in RAK, Al Hamra Estates is actually running out of energy, and the project may have to abandoned! A recent report by Coffee on the Eye on Worldwide forum may be of interest to investors:
Have just returned from a weekend at Al Hamra and understand that we may still be looking at several months before power is connected. Meantime whilst Management will have us believe that A & B blocks are completed and only awaiting service supplies, I took a wander and see that some ground floor apartments still have cables hanging from ceiling and walls and are nowhere near complete and no signs over the last couple of months of any work going on in these blocks - this may suggest that we really are still a long way off handover. Also on my walkabout I spotted that transformers and water units have been installed in the maintenance building alongside buildings B & C - so at least when FEWA have the supplies Al Hamra are seemingly in a position to move the supply into the buildings, which until very recently they were not! There seem to be markers going into the ground for the siting of Royal Breeze apartments, and again no sign of any physical construction work going on in these areas.
To finish off, since he has put it so well we cannot refrain from sharing this posters final comment:
...if only Management would share the truth with us all it would make the waiting much easier and stop these rumours which help nobody.......
Sunday, 17 February 2008
Royal Breeze showcased at the Burj Al Arab
Our man in Dubai was present at the recent ‘showcasing’ of the Royal Breeze apartments at the Burj Al Arab on 28/29 Jan 2008. Whilst not definitive by any account, nevertheless we present his findings during a chat with one of the the sales managers there. Potential investors are cautioned that Al Hamra Estates has a history of lack of communication, and often the information given is of the ‘flexible’ or changeable variety (such as the ever shifting handover dates).
When phase III including RB will be completed?
I got three different answers from three different agents working for Alhamra: end of 2009, July 2010 and early 2011. However the manager who I spoke to said July 2010?
What do you sell today?
RB 4, RB 6, RB8 and apartments in Alhamra Palace Hotel.
Was it successful?
Yes we sold around 160 units within 48 hours.
When construction will be started?
They have already started the construction
Would RB1-3 be completed ahead of RB 4-8?
Yes we will start with three buildings first (RB1-3)? No I am not sure, just drop me an email and I’ll find out for you..!???
Would be any constructions on the beach side?
Yes it will be as plots on the sea side are own by local people; nevertheless the RAK government will not given any plan for tower constructions on the sea side, perhaps G+2?
Would RB have a private beach?
The RB would have a private beach around 1000 Sq M opposite RB6-7.
Any plan for man made island?
Yes the start of the trunk will be next to the RB’s private beach opposite the Road.
So we might see towers rising from the island?
It is not decided yet if we would start to sell plots to developers or develop them ourselves.
Would car park area and terrace be included in management fees?
No only build up area and balcony.
Friday, 15 February 2008
Beach Facility at Al Hamra Village?
The more laid back amongst us may be inclined to take for granted the facility of a free and private beach at Al Hamra Village. Let's face it, we may at this very moment be dreaming of lazing on the beach deckchair, sipping the amber nectar with the warm evening sun providing a soothing thermal massage. Such an essential facility could be located at two possible sites; a) at the lagoon in the vicinity of the Marina blocks, and b) at the sea front area (separated from the Al Hamra Village by a wide open plot of land not owned by Al Hamra)
The direct beach access at the lagoon near the Marina blocks should provide a nice venue for sun and sea bathers, with little in the way of waves. However, there may be issues around cleanliness due to the surrounding Al Hamra development, the marina berths and possible heavy rain. Whether this will be a nice beach area to chill out remains to be seen.
In our opinion the large stretch of beach at the sea front should be reserved for the residents of Al Hamra, but Al Hamra Estates have only indicated that an area located at the far end of the Royal Breeze (away from the lagoon and marina) might be set aside for the exclusive use of residents. This assertion has yet to be depicted in any official Al Hamra literature. It would be unwise for prospective investors to assume that the entire Al Hamra development is fronted by a massive sea-side beach.
The reality of the current situation is that investors in Al Hamra are totally in the dark as to beach access facilty, if any. Indeed, it would not be unkind to say that Al Hamra Estates has done a sterling job in keeping it’s customers in the dark on this issue, even when pressed for answers.
Let us hope that the natural evolution of the Al Hamra project will eventually lead to full sea front beach access as the only sensible option. Perhaps if investors continue to raise their concerns on this matter, Al Hamra Estates (and whoever owns the sea front plot) may come around to seeing the wisdom of making the sea front an essential part of the development.
