The decision to seize Schon Properties’ assets is only “the tip of the iceberg”, with more enforcement likely from Dubai Land Department (DLD) against defaulting developers in the city, the head of Beaver Gulf has told Construction Week.
“There are some developers who are at the same default levels as Schon,” Rajesh Kumar Krishna, chairman and chief executive officer of the Dubai-based contractor, said.
DLD revealed last week that it would seize all assets belonging to UAE developer Schon Properties.
According to Dubai Media Office, the decision was aimed at "protecting the rights of investors in light of Schon Properties’ actions of exploiting investors by refraining from depositing their money in [an] escrow account".
Commenting on the action, Krishna said: “Deciding to take strict action against defaulting developers is an additional step in the right direction.
“I fully welcome the DLD move. If there are [other] developers who have defaulted [similarly] to the point of Schon, then there should be more seizures and stricter enforcement action taken to weed out all the unwanted elements in the market and raise investor confidence.
“Such developers do a lot of damage to the brand name of Dubai, and more specifically, its real estate sector, at the expense of the good and genuine developers in the market.”
Krishna said the UAE’s leaders, including HH Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, have “worked very hard. day and night, to [enhance] the brand name of Dubai in the world over”.
He said: “Anybody, whether they are a UAE national or an expat, has no right to take action that will damage Dubai’s brand name in the long run. There is a trust behind that name and that can never be compromisede.”