Dubai: Property owners in Dubai are finding it’s not easy to change their property management firms… and especially those ones owned by the project’s developers.
“Developers have created a separate company to operate as OA (owners association) management companies,” said Rishi Tayal, an investor in multiple projects in Dubai, including those owned by Emaar and Damac. “But these are principally 100 per cent owned and managed by them.
“Actual property owners have very little say in it. So far, there is no mechanism for the owners to set up their own OAs and have a say in the decisions made. Most of the service charges for this year were not even brought up for proper discussion at OA meetings for review and were sent to RERA without owners’ inputs.”
This was not how it was meant to be, especially after an amended JOP (Jointly Owned Property) Law came into effect late last year, and which clearly limited the role of developers in setting the agenda for OAs once the project has been handed over. (Only in the case of master-developments were the developers involved in the OA process.)
As per the Law, each development would have its own homeowners association, and which would have the rights to appoint the OA management company to set and collect the service charges and be directly responsible for the upkeep of the project. The OA management companies would also liaise closely with RERA (Real Estate Regulatory Authority) on the auditing of the annual budgets.
We would like to highlight and warn owners to refrain from indulging or actively participating in such a group either in forms of meetings or digital participation
But there are discrepancies
Recently, tempers have flared between homeowners and developer-owned property management companies at some of the prestige projects in town. Notices were issued to homeowners implicitly warning them not to get involved in trying to get property management companies of their own choice.
“We would like to highlight and warn owners to refrain from indulging or actively participating in such a group either in forms of meetings or digital participation,” says an excerpt from a notice sent to property owners at one upscale high-rise development.
A “few property management companies and individuals have approached owners… with the intention of managing their units and changing the aesthetics of the units and the building to suit their business needs. These companies and individuals are also persuading and encouraging owners to mobilize against the building management demanding the ceasing of services on the pretense of mismanagement.”
Property owners at the tower told ‘Gulf News’ that they have taken offense at the “implied threat” in the notices sent to them.
“The OA management companies should be acting on behalf of homeowners… and not issuing threats to them,” said one owners. “This is effectively the developer – who owns the building management company – telling all homeowners to behave.
“RERA needs to intervene and ensure the JOP Law is implemented in full.”
Property management firms arbitrarily increase the service charges on the pretext that such charges are approved by RERA
What does the Law say?
It’s clear enough on what rights homeowners have. “If RERA finds that the management company is incompetent, inefficient or unable to manage the common property, RERA shall appoint an alternative management company…,” according to a lawyer specializing in real estate practices.
So, if homeowners at a building – or a majority of them – are convinced they need to change the property management company, they can approach RERA.
“Property management firms arbitrarily increase the service charges on the pretext that such charges are approved by RERA,” said Tayal.
“It was bought to the notice the building management has started harassing some of the occupants who have defaulted on charges, by not allowing any access for grocery deliveries, services or maintenance work. A lot of home owners have complained about it and, in some cases, it escalated to a point where home owners decided even involved the police when they were denied services and deliveries to their property.”
Another flash point
Meanwhile, homeowner sources say that another issue will soon crop up in their relationship with property management firms. This relates to the collection of service charge dues for the current billing cycle – many homeowners have not been able to keep up with the payments. Some have referred to changes in their income status after COVID-19 struck all business activity.
RERA has just issued notice to property owners saying they will need to pay up, but homeowners are yet hopeful that the regulator will provide them more time to pay.
But when it comes to having a better understanding with developer-owned building management companies, homeowners are not keeping much hope.