Hydra Properties meets with investors to resolve payment dispute

The HIG also asked company representatives to ask the board of directors to stop demands for further payment from investors who had paid half of a unit's value.

The project, which was launched in 2006, had originally been scheduled for completion this year, but this has since been pushed back to Q4 2011. The new terms include a six month delay clause, according to a HIG spokesperson, which pushes the possible completion date to summer 2012. The delay was blamed by Hydra on changes in the original master plan.

Legal notices

The Abu Dhabi-based developer had been issuing legal notices, via email, to some investors claiming that their properties would be taken back by the company, with monies paid to be held back, unless they resumed payment of outstanding dues.

The investors' group also says that the notices have been claiming varying amounts would be held forfeit, with some notices saying that the company would keep 20%, others 50% of sums paid so far. Other notices have said that the entire initial deposit paid is forfeit. The 10% initial deposit was paid by buyers while waiting to receive contracts from Hydra which would enable them to arrange financing, these never came through.

Investors also received emails telling them that, if they failed to meet their payment deadlines they would face fines of Dhs500 per day until payment. The fines are retrospective, meaning that many investors who paid the initial deposit but then waited for their agreements would have accrued fines from the payment of the initial reservation fee.

Hydra has said that it has revised payment schedules to try and help investors to meet their due dates, from the initial 10% of the cost every three months, to 2.5% every two months until completion.

Lack of financing

In a further blow to the project, Abu Dhabi Commercial Bank (ADCB), the development's main mortgage provider, has said that it will no longer provide financing to buyers of units in Hydra Village.

ADCB's head of retail banking, Arup Mukhopadhyay, was quoted in The National newspaper as saying that the bank had reached the limit of the amount that it was willing to have riding on the project: 'For every developer and project, we have a pre-decided limit on the amount of exposure we take on. It is a case of not putting all our eggs in one basket. Hydra has reached that limit, and we will not take on any new mortgage cases.'