Warning: Zafarana Beach Resort

[Sam]

For anybody who has either bought in this project or thinking to buy in this project, please be aware that a Dutch company known as IPI has been ILLEGALLY selling this project. The legitimate Egyptian developers have already established a court case against them.

For anybody who may be affected by this you may contact me for further information.

For anybody buying any property in Egypt please be aware of non-Egyptian representatives, especially agents marketing the project, signing the contract. They almost never have the authority to do so and a lot of people have lost money this way.

[Eco-Mariner]

Hi Sam.

From your personal opinion as an assistant to a property lawyer, why do you think Egyptian landowning developers always fall out with their marketing partners at the final hurdle?

They seem to work fine together while selling and taking client monies through the 2-3 years build, yet there always seems to be money issues at project completion and handover stages.

Regards.

Alan.

[taflen]

Hi Sam,
We have bought a 2 Bed Penthouse Apartment in Zafarana Beach Resort in 2007 and would be grateful for any information on the current situation as we are not being in formed by IPI
Sue

[Sam]

Originally Posted by taflen

Hi Sam,
We have bought a 2 Bed Penthouse Apartment in Zafarana Beach Resort in 2007 and would be grateful for any information on the current situation as we are not being in formed by IPI
Sue

Hi Sue,

The current situation does not go in favour of IPI so it does not surprise me that they have not informed you.

To put it simply, IPI had a marketing contract with the Egyptian developers to market the property at Zafarana. In addition to marketing the property IPI sold the property and signed contracts and they had no legal authority to do so, therefore every contract that has been signed by IPI is not worth the paper it is written on and every person who has a contract issued and signed by IPI does not legally own anything.

Owner's in this position are strongly encouraged to contact the Egyptian developers to arrange for a new contract to be issued.

Sam

[Eco-Mariner]

Hi Sam.

Does Zeiad now have a copy of the original partnership agreement that IPI had with the developer?

You may find the European party IPI had the necessary poa to work with client monies under the articles between the two parties. More likely the dispute was over what was in the bank holding account for clients (the profit share) and not just about the right to sign contracts.

Either way, owners once again are being sold a pack of lies and may have a dispute for years.

Alan.

[Sam]

Originally Posted by Eco-Mariner

Hi Sam.

Does Zeiad now have a copy of the original partnership agreement that IPI had with the developer?

You may find the European party IPI had the necessary poa to work with client monies under the articles between the two parties. More likely the dispute was over what was in the bank holding account for clients (the profit share) and not just about the right to sign contracts.

Either way, owners once again are being sold a pack of lies and may have a dispute for years.

Alan.

We have requested all the paperwork, and everything we have been provided with shows only that IPI and El Mohanad Real Estate had a marketing agreement.

I would have to check what I am about to say later with the lawyer, but my understanding is that a PoA for such things in Egypt, i.e. authority to sell or administrative rights of an Egyptian company, can only be issued to another Egyptian, in which case if there was a PoA it would not have been valid. But, I will have to check that later. As you know, I have been extensively trained, but am not a lawyer, so can only speak within the scope of what I know.

What I know as a fact, is that IPI issued contracts and signed contracts and these contracts (the ones I've seen are not even in Arabic) and that these contracts are not recognised either in Egyptian law or by the Egyptian developers of the project.

Anyway, as you say, whatever has happened between the developer and IPI in the past is irrelevant, what we care about are the owners who have invested their money into the project and for them to not lose it all. The most important thing is for each owner who has a contract with IPI and not the developer to contact the developer to get a new contract issued, otherwise they effectively own nothing.

As you have correctly said, the dispute between IPI and the developer may be lengthy. Should a case go ahead between owners and IPI to claim lost monies this may also be lengthy. BUT, my understanding is that the development is nearly complete, and IPI aside, if owners contact the developers, a new contract can be issued with relative ease and speed, and at least their loss can be minimalised and they can continue to take handover of the property they put money in to.

[Eco-Mariner]

Nicely put Sam.

What we all need to know is, did IPI have a "Practical Partnership" agreement which is effectively a 50/50 partnership in construction and marketing, or a Main Agency agreement which would be for promotion and administration only.

The concept of them being one and the same has confused many investors. Not least the dispute with WWD and El Riad (Desert Pearl projects), Sigma and Adley (Regency projects) and Estates Alliance with Iraida (Oasis projects).

The difference is that agents can take commissions and partners handling money can take a contractable share of income and profits because they had poa in the original formation of the company, irrespective of the nationality of the partner.


Alan.

[taflen]

Hi Sam

Thanks for info, much appreciated.

As mentioned by Alan in a previous post there are other similar disputes on-going. We are also involved in a similar dispute in Sahl Hasheesh, (Sunset Pearl) between WWD and Nagy Azab of the Pyramisa Group. In this instance we were advised by Grant Thornton, the accountants handling the liquidation of WWD, not to sign a contract with the Pyramisa group as we would then have two valid contracts for the same property. (Grant Thornton had appointed a representative with poa to assist purchasers to completion). This is still ongoing and we are wating for the outcome of an impending court case in Egypt.

The current sittuation with Zafarana is that, after failing to pay the second guaranteed rental payment, we threatened legal action against IPI. Ths resulted in a statement from IPI that if any purchaser commenced legal action against them, they would put the company into liquidation. This was followed by the issueing of a new contract. This contract if signed deffered any rental payments due, as well as removing you right to sue them. An additional insult was to ask for contrbutions to fight the legal case against EMR.

All things considered I would like to contact EMR at this stage and ask for a new contract. I am not sure how to go about this as the only reference on my contract to EMR is the company name with no address or contact numbers.

Once again many thanks,

Regards

Sue

[Sam]

Originally Posted by Eco-Mariner

Nicely put Sam.

What we all need to know is, did IPI have a "Practical Partnership" agreement which is effectively a 50/50 partnership in construction and marketing, or a Main Agency agreement which would be for promotion and administration only.

The concept of them being one and the same has confused many investors. Not least the dispute with WWD and El Riad (Desert Pearl projects), Sigma and Adley (Regency projects) and Estates Alliance with Iraida (Oasis projects).

The difference is that agents can take commissions and partners handling money can take a contractable share of income and profits because they had poa in the original formation of the company, irrespective of the nationality of the partner.


Alan.

Hi Alan,

I have enquired, and I can confirm that we have not been provided with the original contracted agreement between IPI and the developer. We also have not been presented with a PoA, if one existed (and I checked and it is possible to have issued a PoA to a non-Egyptian to do this).

However, again as I have mentioned, the papers as we see them are what counts. Even if IPI had a PoA to sign contracts, the contracts that were issued were issued by them and not by them in their capacity, so the contract is still illegal.

Every investor should make sure that a due diligence check is done on a property by a reputable lawyer prior to buying. The most important things to check are ownership papers, first party within the contract to ensure the right person is signing (and within the right capacity if it is a representative of the owner) and the building license. It is also important to check taxes due on the property and the financial status, where possible.

Partners, agents, commissions etc are all irrelevant if the sale is illegal. As long as the transaction is legal, then money should only be transferred to the bank account, which should be mentioned in the contract, or a escrow account.

Sam

[Sam]

Originally Posted by taflen

Hi Sam

Thanks for info, much appreciated.

As mentioned by Alan in a previous post there are other similar disputes on-going. We are also involved in a similar dispute in Sahl Hasheesh, (Sunset Pearl) between WWD and Nagy Azab of the Pyramisa Group. In this instance we were advised by Grant Thornton, the accountants handling the liquidation of WWD, not to sign a contract with the Pyramisa group as we would then have two valid contracts for the same property. (Grant Thornton had appointed a representative with poa to assist purchasers to completion). This is still ongoing and we are wating for the outcome of an impending court case in Egypt.

The current sittuation with Zafarana is that, after failing to pay the second guaranteed rental payment, we threatened legal action against IPI. Ths resulted in a statement from IPI that if any purchaser commenced legal action against them, they would put the company into liquidation. This was followed by the issueing of a new contract. This contract if signed deffered any rental payments due, as well as removing you right to sue them. An additional insult was to ask for contrbutions to fight the legal case against EMR.

All things considered I would like to contact EMR at this stage and ask for a new contract. I am not sure how to go about this as the only reference on my contract to EMR is the company name with no address or contact numbers.

Once again many thanks,

Regards

Sue

Hi Sue,

I found their number searching on Google.

0224143978

Hope you can sort things out.

Sam