Legal advice regarding a property in the UAE – desperate please help

[PoptartPoptart]

I have also posted in legal and chat but someone suggested that I try here too.
A very long and complicated story but DP has a property abroad (UAE) and we desperately need some legal advice about repayments and possibly having to default on the mortgage.
He has been in touch with the bank over there and so has his company on his behalf (a major international company based in the UAE) but the bank are so unhelpful and unreasonable. They basically told him that if he misses a payment then there will be an arrest warrant the next time he sets foot in the UAE and they will also chase him through the courts over here in the UK. He has tried to renegotiate the mortgage repayments and the mortgage term to what we can afford but they just flatly refuse to negotiate at all! They are simply demanding the full payments every month which we will no longer be able to afford in a few months time. We could afford about a third of what they are demanding each month and have offered to extend the term from 15 years to 25 years in order to pay the full amount owing but they say no. We cannot sell as unfortunately it is in quite a lot of negative equity (approx 100k) It was brought off plan 4 years ago and since then, the recession etc, it has lost shedloads of value.
We don't know where to turn and it is making us sick with worry. I have called a few solicitors here in the UK for advice but no-one seems to have the expertise to help us. I've spent hours googling for advice and spoken to Citizens Advice but not been able to find out anything useful. No lawyers in the UAE are willing to help as none of them want to go against the banks (banks are Government owned) and are a law unto themselves.
Can anyone point me in the right direction for some help with this please? I am so scared DP will end up facing the UAE courts or we will have to sell our house. It all feels like such a mess. I just need someone to give us sound legal advice on this but I don't know where to turn.

[Aliciabee]

Just to say not a legal expert but have experience of owning and selling property in Dubai. I don't believe they can chase you through the uk courts for money. Im sure they do not have the ability to do this. I don't think there is a legal framework in the u.a.e. for defaulting and declaring bankruptcy. Are you u.a.e. residents? Can you in the worse case, I know people who have done this, just leave and never return?

Is the bank an Arabic one as opposed to lloyds tsb? Has your husband been negotiating from the uk rather than face to face cos often if you deal with an employee who just follows the rules they will spout out the 'rules' but standing there pleading your case sometimes things will get done. I think they may increase the term if you sit there all day speaking to someone high up in the bank, you are not the only people to be in this situation.

I had issues with adcb bank and had to stay there all day to finally get my situation resolved with quite a bit of shouting and bluntness. Is your interest rate high? Could they lower that for you rather than restructuring the debt. I remember friends renegotiating their rate down.

Will renting cover more of the mortgage? If you get one years rent up front then that could give you breathing space to sort things out? Or depending on location of property could you rent short term for holiday rental thereby charging more?

I'm sorry I can't help you more and im sure you have already thought of everything i ve said already. I hope you get something resolved. Are you aware of the expatwoman website cos the chat forum there has a lot of knowledgable women and their husbands?

[PoptartPoptart]

Thanks for your reply Aliciabee. Yes, the bank is arabic. DP and his company have tried everything to make the repayments manageable including asking them to reduce the interest rate (which is quite high), extending the term of the mortgage, repossessing and we work out a way to repay the negative equity, etc. They just will not budge. It is currently rented but it only covers half the mortgage so we have to find the other half (approx 18k a year). We are both UK nationals and live in the UK but DP has to travel to the UAE regularly on business. Even if he resigned and never set foot back in the UAE again we are worried that they could chase him for the money through a court order and we might lose our house here in the UK (which we jointly own). The crazy thing is, we don't want to default on the mortgage - we are trying to negotiate a way to make the payments more manageable, but the bank won't negotiate. We can't pay what we don't have! Thanks for the advice about the expatwoman website, I'll check it out.

[holidaysdistantmemory]

In terms of the uk, they would need to get a uae judgement enforced in the English courts, it could be done but takes a significant amount of time.

In terms of being in the uae, you can be imprisoned for bouncing a cheque, if you do end up defaulting you and your husband should not step a foot in the country for holiday or business. The banks have full right to demand payment and no duty to renegotiate payments.

[louisea]

Try asking on the Expatwoman Dubai board. There will be lots of people over there who can offer advice.

[Labootin]

To be fair to the solicitors what exactly do you expect them to do?

The bank hasn't done anything illegal.
Unless they put a gun to your head to take out a mortgage?

Dubai could never have sustained the kind of growth, and unfortunately you got burnt,

a Dubai resident british national friend of mine lost over 500k on a couple of flats in Marina, he handed back the keys to the bank and did a moonlit flit.. He thought he'd make a fortune

Sorry I know I don't sound sympathetic but you took a risk (and investing in property abroad is always a gamble)

I hope you get a solution though, rents in some areas are on the rise, and construction work has restarted if you can hang on you might still salvage something.

[MakeNoResolutions]

I'd try and speak to someone higher up in the bank (obviously don't know to whom you have spoken but assuming lower down the ranks). From what I understand, the bank can attempt to recover the funds owing (and costs?) once the case has been through the courts here. It will take some time though.

It doesn't make any sense for the banks not to negotiate the best way for their customers to pay them back rather than putting them into a position where they have to default. I do feel for you - unfortunately this is all too common in the UAE.

I'm sorry I can't give you any further advice.

[DolomitesDonkey]

Be careful with travel, think about where your plane might re-fuel or land in an emergency - and then never step foot on the soil again.

As a previous poster pointed out, the bank will not renegotiate to your terms and when you took the gamble this should have been explained to you. Do not under any circumstances go to negotiate, you will be imprisoned.

They can do fuck all to you on UK soil and should the time come that they bring it to a UK court, UK law will protect you and we've yet to see debtors prisons.

Amazing you bought off plan 4 years ago, a full year after things started crashing.

[RichManPoorManBeggarmanThief]

The problem is that the UAE doesn't differentiate between criminal and civil law like the just does. If you default on a loan in th uk, it's a civil matter between you and the lender. In the UAE it's fraud. That's why so many expats dumped their cars at the airport and scarpered. However, the good news is that they can't pursue you through the uk courts for it as what you are doing is not a crime in the uk.. You could be arrested if you return to the UAE though, so just dont go there.

[rushingrachel]

It's not quite correct that they can't pursue you in the English courts. Refer back to Holidays post a few posts back - she IMHO got it spot on. They would need to get judgment in UAE and then bring an action in the English courts to get that judgment enforced. Time consuming but it can be done. I saw it in a professional context a couple of years back (am a company lawyer).

[RichManPoorManBeggarmanThief]

Apologies- thought what I was saying was correct.

Rushin So would that mean you would get put in prison in England? I thought that couldnt happen. Or do you mean they could pursue you for the cash? If so, does this actually happen in reality? Given the number of expats who have presumably done exactly what the OP is suggesting I'm surprised we havent heard of this happening in the DM

[Orianne]

Ok, a few questions first

Which bank?
Where is your property?
What type of property?
How long have the people renting it been in it?
Do they pay rent inline with RERA rent index?

[Orianne]

Ps I'm not a lawyer. But own and rent property here and have a good friend who defaulted. So might be able to guide you.

[TheDoctrineOfSnatch]

IIRC, at present you are making the payments but are concerned you cannot keep them up?

Can you remortgage your UK property at a lower rate to pay down part of the UAE debt? Can you sell your UK property?

[Lavenderhoney]

A friend of mine has been through this- its awful.

I would also check expat forum as it is not heavily moderated like the expatwoman site ( ie anything like this will probably be deleted) expat forum Dubai section will be much more helpful for you.

The UAE banks, even those with a UK tie cannot enforce payment. They can if they go through the civil court for each case which will cost and take time for them.

They can sell the debt to UK banks and debtors. You will then be chased and pressured to pay, however again, debts incurred in the UAE need to be sent through the same legal process as a above, so ask for the papers from the court to prove they can chase this supposed debt in the UK.

Culture is different there and often friends and family will pay to get people out of jail and also to stop being chased by banks and debt collectors. This is because if you set foot in the UAE now, or are on a stop over and have to disembark, you will be arrested and put in jail til its paid.

You did well not to talk before you left. All you can do now is wait. You have paperwork saying you tried to negotiate. Now either set up small payments of what you can afford and go ahead with them or stop paying. They are probably hoping you will get scared and sell everything. Or your family will pay.

Morally you should sell all and pay, but its not as easy as that. Plus the banks have included most probably in your repayments a charge for insurance should you skip town.

[LoveSewingBee]

Can your DH still do his job without ever returning to UAE? If so, you could default and hope that you don't get pursued through the UK courts.

However, if this had happened in the UK, your UK bank might equally not want to negotiate and would force you to sell your other home to make up for the negative equity. This is the risk you took by investing in property. Lots of people in the UK are in a similar situation and are about to loose or have lost everything they owned. Property investments are big investments. Lovely when it goes okay, not so nice when it goes belly up.

I hope you can find a way of paying of the negative equity (maybe through an additional loan on your current UK mortgage), so you don't have a cloud hanging over you.