A seemingly easy question - “How do you get ownership?” - put to many investors in this part of the world has a similar answer. Pay the money and get that title deed. Property ownership is synonymous with title deeds and it stops there. Honestly, this is how investors think in this part of the world and I am surprised, to say the least.
The answer prompted me to ask the next question – “So then, what is ownership?” The answers I get are really naïve. Honestly, the responders had no clue what they were doing and why they were doing what they were doing.
Over the last 15 plus years, I have been monitoring the general response from homeowners to the management of their community. I do not know whether it is the paucity of time that literally stops owners doing any soul searching on why they do or accept to do what they do. I am talking about making service charge payments without trying to justify the reasons.
The general level of participation of the owners in managing their own property is dismal, and this surely means the need for third-parties, which can only harm the owner.
Control by proxy
Participation in management by the owners is difficult since the developer is not keen to assign them active roles. I have seen all sorts of frustrating measures taken to ensure that owners shy away from active participation – obviously to their own detriment.
I have been a party to one such so-called annual meeting, where the entire proceedings were done in the most unprofessional manner one can imagine. Add to this the horrible procedure of proxy voting whereby the developer in a typical community can literally get away with whatever he wants to do with the help of proxy votes.
I have experienced the way developers have managed to retain command of the community management by way of proxy voting, and in once case the entire staff of the developer was present to do the voting. I just fail to understand how one vote culminates into numerous ones only because the developer owns more than one unit.
The regulatory paperwork is also not conducive and stops many otherwise keen participants from participating in the management of their own property. The management of a community is time consuming and a thankless job. However, if owners who have parted with their money are not going to look after the same, then it would be foolish to expect third-parties to take care of it without creating a dent in their pockets.
Regulatory controls have their own limitations and come at a cost, which is borne solely by the owner. And such costs are quite out of proportion and at some point make the investment a commercial flop.
Monetary losses is just one part of the story, the sheer frustration adds much more to the mental losses and could act as a deterrent from further real estate investments. Unfortunately, the story so far has been quite a sorry state, and we have seen numerous cases of exploitation by developers resulting in expensive management of the properties and at a steep cost to the owners.
The status does not seem to be changing much despite the amended laws last year, which gives near zero powers of management to the owners and all possible power to the management companies. While the regulators will oversee them, they have their own workload and I really do not blame them if they miss crucial points.
My request is to amend the guidelines to enable actual owners be responsible for the management of their assets. This I feel can only benefit the real estate market in the long term.
- Gautam Patel is a Dubai based property owner.