. The project, which was completed recently, is adopting this and other property management features in line with the regulations, released by the Real Estate Regulatory Agency (Rera) in May.
Mohammad Nimer, CEO of MAG Group Property Development, says these initiatives are part of the company’s efforts to adapt to strata. Sinking funds, says Nimer, are all about making a provision for future course of repair. “Sinking funds come in handy when major maintenance or replacement works have to be carried out a few years down the line.”
Maintenance provisions
Sinking funds are an integral part of MAG 218’s maintenance set up and an example to other developers. Nimer believes that the cooling systems in other Dubai Marina projects are at risk in the absence of such funds.
“Unlike Jumeirah Lakes Towers which has a district cooling system, each building in Dubai Marina is cooled by separate chiller units. We have three chillers in our building. Assuming that one of the chillers goes out of order after five or six years and it has to be replaced, then the residents may have to shell out a big amount for a new chiller. When it happens, it will be difficult to approach the owners’ association and ask them to pay up for the chiller replacement, especially because this involves a big amount. That’s when sinking funds come into the picture.
“In the case of sinking funds, we are taking this money from the residents from day one, so they can relax even if a big maintenance work is needed in the tower later on.”
The developer will be charging a service fee of Dh9.85 per square foot per annum from the residents of MAG 218 which will also include sinking funds. “The reason why we have kept a service fee of less than Dh10 is because we wanted to offer the residents good service at a lower cost,” says Nimer.
The current service charges at the 66 storey tower cover cleaning, garbage collection and security.
“The main component of the fee, about 30 per cent, is expenses related to lighting and air-conditioning in the common areas. Then there is the swimming pool and landscape maintenance. We are guaranteeing that people will not pay any extra charges for maintenance more than the stipulated rate during this period. Even in the apartments, whenever there is a problem with plumbing, electrical work and mechanical installations, we will carry out the maintenance work,” says Nimer.
Owners’ association
An owners’ association will be established within the next six months, as per the strata regulations. “We will be setting up an owners’ association comprising representatives of the residents. The members of the association will then elect a chairman. They will be representing the tower and will deal with the strata management company. The association has the authority to check and control everything the strata manager is doing. It will also have the power to select a strata manager after the first year,” says Nimer.
In the first year, the project will be managed by the developer’s property management arm MAGme, but the decision to whether renew the contract or appoint a new strata manager will rest with the owners’ association. Nimer is optimistic the new regulations will provide improved guidelines to regulate the real estate sector.
