Mohammed bin Rashid issues law on joint ownership of real estate in Dubai
Clear guidelines issued for developers, facilities providers and owners' associations
Dubai: The Real Estate Regulatory Agency (Rera) has been further empowered to oversee the upkeep of “jointly owned properties” in Dubai, including the way facilities management (FM) businesses bill clients.
As per a new law, the FM service provider must submit reports every six months to Rera on the management of the property and common areas. At any time, Rera can request information on the revenues and expenses related to service charges.
The FM provider is also responsible for obtaining insurance coverage for the project, while the Rental Disputes Centre can review all disputes that fall under this law.
The new law applies to all major projects and jointly owned properties in Dubai, including those located in free zones and special development zones. Violators are subject to financial penalties up to Dh1 million. Penalties will be doubled in case of repeat violations within a year up to Dh2 million.
These form part of Law No (6) of 2019 issued by His Highness Sheikh Mohammed Bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai.
Rera can also appoint another FM company in case the developer or the management company fails to ensure proper maintenance of the common areas.
Three categories
Jointly owned properties are divided into three categories for the purpose of management of common areas. The first category includes mega projects, where the developer is responsible for managing, operating and maintaining common areas and facilities. The second constitutes hotel projects, where the developer has appointed a company to manage the common areas.
The third includes projects other than master developments and hotel projects, where a specialised facility management company manages the common areas. The owners' committees for the first and third categories should not include more than nine members selected by Rera, and should be established when 10 per cent of the joint real estate units are registered. The developer cannot be part of an owners' committee unless there are unsold units.
Fixing responsibility
* The developer is responsible for any damage to the structure of the jointly owned real estate property occurring within a period of 10 years, starting from the date of issuance of the completion certificate.
* Also, the developer is responsible for replacing and repairing any faulty items in the individual units within a period of one year from the date of delivering the unit to an owner. In case the owner refuses to take possession of the finished unit for any reason, this period will be calculated from the date of issuance of the completion certificate.
* All details regarding contracts related to the management of such developments and common areas and areas owned by the developer of the project should be registered. The Land Department will issue ownership certificates related to individual units as per the terms and conditions of Law No (7) of 2006 pertaining to real estate registration in Dubai.