Business | Property
Interim board's structure skewed: experts
With most developers paying short shrift to the Real Estate Regulatory Agency's (Rera) October 13 deadline to register jointly owned property (JOP) declarations, the property regulator is now seeking the formation of interim boards in strata title property, as a precursor to the formal registration of owners' associations (OA).
- By Deepthi Nair, Sub editor, Property
- Published: 00:00 January 1, 2011
- Image Credit: Grace Paras
- The Greens. Emaar has initiated proceedings to form interim boards at its communities
The OA registration is likely to be an extensive process, involving a survey, and could take several months to complete. Property bellwether Emaar Properties recently announced that it had formed 39 interim boards of OAs for its master communities across Dubai.
While most master developers have dragged their feet on strata compliance, Emaar's announcement has come as a welcome reprieve. "However, there is a twist to this in that the eventual numbers of associations could be much higher once the title structure is registered. For example, where we have a mixed-use development, we have been forming only one association, whereas once registered and the necessary JOP Declarations lodged, we could have as many as three associations in one development and the 39 quickly evolves into 60. The current interim phase may become very messy when this unfolds in that many of the interim boards are not structured according to the final structure. Also, decisions on budgets, etc are being made by owners who have no legal interest in another section of the development. For example, retail owners are making decisions for residential owners," warns Kent O'Brien, CEO and managing director, Strata Global.
Rera enforcement
While the punitive costs associated with registering JOPDs are dissuading the developer community, the looming idea of having to relinquish control over their developments and lucrative service charges is also haunting them. "There was almost a lack of interest from the development industry in general and unless pushed, many developers have not progressed matters at all. However, those developers who had been proactive before October 13 are continuing to do so post that date," informs O'Brien. Many developers find the idea of investing funds in completed projects futile. "Once Rera starts registering OAs and enforcing the regulations, then we will see an entirely different attitude on the part of developers," believes Gary Bugden, executive chairman, PRDNationwide.
In the absence of final directions on several aspects of the Strata Law, industry experts also warn developers against a rush towards compliance.
"We have not seen final directions on many aspects of the law such as standard forms and the mechanics of cost-sharing allocation. In many instances, we see developers outlaying funds for documentation and planning that may not be approved. So, you can see why many would want to wait and see the eventual outcome before committing," adds O'Brien.
In case of non-compliant developers, regulations grant owners the right to initiate registration proceedings and later on charge the costs. "We have been approached by many interim groups, especially those under master developers. However, our advice is that unless you are working with the developer, you will not make any progress. The information required for completing documents such as the JOP Declaration is under the developer's control and in any event, who would take on the cost of doing this?" reckons O'Brien.
homeowner view
- Owners could initiate the registration process and later on charge the costs
- OA registration involves a survey and could take several months to complete
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