Homeowners in Dubai can terminate service providers even before contract ends: RERA CEO
Property owners can act decisively if they fail to get the services they pay for
Dubai: Homeowners and owner associations (OA) in Dubai have the right to change under-performing property and facilities management companies midway through a contract – and not have to wait until the annual contract ends. The move effectively empowers homeowners to demand – and get – the sort of services they expect.
“An individual owner can raise a claim to the owners association, who can then apply to change the (property management) company - without the need for a majority - by sending a letter to RERA requesting the replacement,” said Marwan Bin Ghalita, CEO of RERA in a recent interview to Gulf News.
A clear procedure for RERA is highlighted in the event of investors’ complaint about the performance of the management company for the common areas. The owners committee will address the offending company on the (service) shortcomings, and RERA will be addressed to ensure that the company implements the special instructions and take steps towards amending the situation within a set deadline.
“In the event the company is unsuccessful in modifying the status or in working according to the satisfaction of homeowners, the company will be dismissed. And a new tender for project management will be awarded to another approved company.”
Smoother OA processes
It was in 2019 that Dubai’s real estate authorities stepped in with a series of updated regulations on OA issues. What it did was effectively reset homeowners’ relation with property management companies acting on their behalf. Developers’ role in influencing decisions within OA committees and awarding contracts to service companies was drastically cut after these new rules.
RERA, in another decisive move, also effectively took on full control over approving owner association budgets on a particular freehold building or community for the years. External auditors were brought in to go through all the numbers provided and send in their approvals, or otherwise.
There are more than 500 OAs registered with RERA currently, and the process has picked up as new projects are delivered and end-users take up residence there.
"If, however, it is about the OA themselves, then no. As long as the OA is performing well, there is no need to draft a new tender for the OA services but only for service providers within the OA.
"We at RERA have examined a lot of options by taking a bulk tendering - or a 'long-contract' tendering - and monitored the performance of those subcontractors. Usually, contracts are reviewed annually by the OA management companies, prioritising quality over price because in the long run. Owners will want quality work from service providers even if they have to pay more for it.
"Ultimately, the quality of the provided services depends on the commitment of the provider and their performance history."
Change ‘in one month’
But there have been instances when homeowners have approached RERA saying that changing property management companies and appointing new ones is still proving difficult. To that Bin Ghalita said: “The process is actually easy. Once we receive a complaint from the owners committee, we communicate with the service provider and inform them of the matters they need to rectify - with a deadline of one month.
“There may be delays when handing over to a new company and processing the new tender. Otherwise, changing underperforming or non-performing companies is easy for the owner once the process is completed and the documents are properly submitted by the owners’ association, requiring no more than one month.”
RERA sent several invitations to property owners to nominate owners who meet the required conditions to be members of owner committees. These conditions are in accordance with the requirements specified in Law 6 of 2019 on freehold ownership in Dubai.
Among the key conditions are that the homeowner must be a resident of that building and be regular with paying service charges. “RERA also communicates and holds meetings with property management companies to request for the registration of owners' committees in the properties managed by them,” the CEO of RERA said.