UAE rains: Dubai's homeowners, property firms rush to tap funds on damage repairs
Owners associations, property managers call emergency meetings for cost, damage checks
Dubai: Homeowners’ associations and property management companies in Dubai have called emergency meetings for immediate assessments on damages sustained to their residences and residential buildings.
These meetings will also address how available funds can be used to counter such risks in the future.
Of immediate priority is to do a checklist on the damages sustained after unprecedented rains lashed the UAE – the highest such in 75 years – all through Tuesday (April 16).
Property management companies say they will have to use up a sizeable portion of their ‘sinking funds’ to meet the cost of repairs. (Sinking funds are what’s set aside by property management companies from the service charges collected from homeowners.)
“If the funds fall short, then there is going to be a major problem,” said an official with an homeowners group. “Because there are still issues with many property owners not having been regular on their service charge payments.”
Taking on any new costs will also need to be balanced with the service charges currently set for those homes and buildings and how much property owners have been contributing to the general upkeep. (In Dubai, any changes to service charges will have to prior approved by RERA.)
According to Elizabeth, homeowner at a high-end villa community, "What is the point of paying service charges that are so high if even the basic drainage is not being functional?"
What can property managers do?
According to industry sources, facilities management companies will need extra personnel on call for such events to take care of ‘immediate problems such as short circuiting and common area flooding’. Again, funds need to be there to take on any extra hiring.
“This has to be approved by homeowners’ association board members,” said the source. “Also, common area damages cannot be mixed with any problems at individual apartments, because that would be for that property landlord to take care of.”
Water was flooding in from the windows, the roof, and even the walls. We couldn’t get any facilities companies to respond and finally had to leave the apartment as water levels were reaching the bed. We hope to get cleanups conducted today and only after that we will be able to assess the damage
Repairs to common areas will represent the biggest worry for owner associations. This will require immediate funding for all the related works to be taken care of. Such will be the demand for repair services that some sort of cost inflation will be there when the contracts are given out.
Again the question will be whether property management companies will have sufficient funds in hand? Or will they have to call on homeowners to provide one-time 'emergency' funds?
More costs will have to be taken on
Another priority that high-rise developers, homeowners and property management companies will have to deal with is how to counter flooding of basements. Requisite equipment will need to be placed on-site and made immediately available to offset any future risks.
Residents will have to take precautions such as not having furniture out on their balconies as well as insulating electric switch boards.
The leakage and water damage incidents reported yet again point to the importance of home insurance. As well as insurance for all kinds of businesses no matter the size
Higher insurance rates too
There will also be higher insurance costs that property owners need to deal with.
Property-linked insurance premiums had seen sharp increases since the start of the year, and that’s going to get more so once the claims from the latest damages come in.
"Insurance costs relating to property will likely rise further, especially as they deal with waterproofing issues in basements and on electrical boards," said a consultant. "Temporary solutions like installing sandbags are also an option to prevent the worst of the flooding. All of these are under consideration as OA and FM companies grapple with the cleanup and install preventative measures for the future."