Dubai : The strata regulations covering jointly owned properties accompanying the law published on Dubai's Real Estate Regulatory Agency (RERA) website, reveal an emphasis on transparency but will need some ironing out.
On face value, the directions attempt to address inconsistencies seen elsewhere, in particular relating to disclosure of information and supply agreement implementation, Kent A. O'Brien, CEO and Managing Director of Strata Global, a Better Homes sister company, said.
In other words, home owners will gain a new level of insight into the workings of their maintenance and fees.
In the past, many complained about the lack thereof, and when demanded to see the ‘books' developers kept them closed because they could.
However, while O'Brien commends the attempt to raise the bar resulting in a just and equitable multi-owned property environment, he also offers a word of caution on some salient issues with the guidelines.
Many owners in Dubai are so in absentia and generally reluctant to sit on the board of an owners' association. RERA may demand a training course before it approves and registers members, which could have the reverse effect to what is intended, O'Brien said.
"To place more hurdles in their path could see many candidates withdraw. We must ensure all owners are considered as equal otherwise there will be a divided community."
The other issue relates to the special service charge the board may impose on owners. Although it cannot exceed 15 per cent, O'Brien reckons it could create divisions among owners and may end up being the first section to be amended.
"From my experience such authority is prone to manipulation by vested interests especially if an owner is selling and wants an amenity within the property refurbished prior to a sale of the unit. One only needs to research the history of the way sinking fund expenditure is manipulated to see what can happen here," he said.
O'Brien also called into question the viability of the master developer submitting a jointly owned property declaration in respect of the total area of land being developed, as they have not been planned for this scenario. For one the RTA would take over arterial roads with the remainder becoming neighbourhood precincts managed by layers of associations.
"It will be interesting to see how these communities are broken up. More control will be given to owners in these master communities, similar to the integrated mixed use developments in other jurisdictions."
Attach key guidelines
Anyone selling their property must be sure to attach the key section of the guidelines, the disclosure requirements, to their sales and purchase agreement (SAP) for the next nine months, until they become an integral part of an SAP.
"It is imperative that developers and owners intending to resell their property fully understand the consequences, otherwise we will see void contracts," the guidelines say.
