Hydra Properties to sell land to pay homeowners
Court orders $45m of land sales; first auction to be held 12 December
Hydra Properties is being forced to auction three plots of land in Dubai to settle outstanding payments owed to homeowners who won legal cases against the developer for delayed and cancelled real estate projects in Abu Dhabi.
Abu Dhabi’s Court of First Instance ordered the developer sell $45m (AED164m) worth of land, including two plots in the Burj Khalifa area and one in Al Barsha, in three separate auctions, starting December 12 at the Ramada Downtown Dubai.
Proceeds from the auction will be used to pay off outstanding creditors, including eight home owners owed AED11m, Fareya Azfar, head of arbitration at The Legal Group said.
“It’s a very rigorous implementation of the execution procedure; it shows the severity and the consequences of not paying, [which] can lead to auctioning,” said Azfar.
Local developers faced a slew of legal cases from buyers in the wake of the 2008-2009 economic downturn, which led to billions of dollars worth of projects being put on hold or cancelled while house prices plummeted around 60% from their peak.
More than 100 buyers last year filed cases for refunds from Hydra for property in stalled projects, including Hydra Village, Hydra Avenue and Hydra Golf Walk.
Dubai-based The Legal Group has won eight cases against the developer to date, said Azfar. Successful cases have included owners of property in Hydra Avenue, Hydra Executive and Marina Spirits.
In addition to those eight cases, The Legal Group said it is also representing other buyers that have not yet won their cases but in the event they do, will also benefit from the auction.
“If the court grants us the interlocutory attachment order then while these purchasers’ cases are ongoing, they will not face the risk of exhaustion of Hydra’s assets because their share in those assets will be secured via this attachment,” said Azfar.
Hydra was not immediately available for comment.