Hydra ordered to repay couple without property contracts

Inadequacies in law a complicating factor in Abu Dhabi disputes

Bradley Hope and Brad Reagan Abu Dhabi judges have ruled that Hydra Properties must refund payments that a husband and wife made on two properties because the developer failed to turn over sales and purchase agreements, court documents show. In purchases dating back to 2008, Obaid Humaid Ali al Mazrouie and his wife, Aisha, each made a payment of Dh447,057.60 (US$121,717) on neighbouring apartments in Hydra Towers.

They received reservation agreements but never obtained from Hydra the full contracts for the apartments, court documents show. Hydra declined to comment, and the couple could not be reached. The judgments in the Court of First Instance come as more property disputes are making their way to Abu Dhabi courts. There are so many of these cases that the Abu Dhabi Government is considering setting up a special court to handle them, said a spokeswoman for the Department of Municipal Affairs.

A major challenge for homebuyers and developers in such disputes is the inadequacy of laws governing property transactions in Abu Dhabi. While Dubai has issued a raft of specific laws over the years to regulate its property market, Abu Dhabi has not yet even established an entity to oversee the commercial side of the market. The Urban Planning Council oversees the physical development of the city and sets guidelines for developers, but its role does not encompass regulating sales.

"There is a gap between how to apply laws, especially property laws, because there are no specific laws to refer to in terms of freehold property," said Mohammed Hassan al Marzouqi, a lawyer at Al Tamimi and Company. "In Dubai, you have many laws regarding the real estate sector." In Abu Dhabi there is one property law without a full set of regulations, he said. In many cases, the only document enshrining the relationship between the buyer and developer in these cases is a thin "reservation agreement", which is in place until the fuller sales and purchase agreement comes into effect months after the payment of the first deposit.

Hydra Properties has been involved in investor disputes since last year, when a group of buyers in the company's Hydra Village project began negotiating with the developer as a group rather than on an individual basis. The law firm MIO is handling dozens of cases filed by buyers against Hydra. MIO declined to comment. @Email:[e-mail] @Email:[e-mail]