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Dubai: The recent cooling crisis in Motor City was just the latest in a long line of complaints from residents, who now want to see their owners association (appointed by the developer) drastically improve or be changed by the Real Estate Regulatory Authority (RERA).
Residents who own their properties and had paid their bills were left without air conditioning for a week during the heat of summer earlier this month after cooling provider Emicool switched off the A/C in common areas claiming they hadn’t been paid by the master developer Union Properties (UP).
UP promptly referred the case to their subsidiary Edacom, the owner’s association management company, who UP said were responsible for collecting outstanding maintenance fees from the homeowners.
The regulator realises there is a problem. You can’t have a situation where rents keep falling and service charges are still at same levels ... or being pushed higher.
RERA stepped in however and ruled UP responsible for the non-payment, before setting out a payment plan between UP and Emicool that saw the A/C finally switched back on.
RERA CEO Marwan Bin Galita told a local radio station: “UP is referring people to Edacom, but the truth is Edacom is owned by UP so they should be responsible. Owners have fulfilled their commitment by paying their service charge, some not all, but at the end of the day the master developer should take responsibility and pay all utility services related to common areas.
“There is an amount disputed but now it’s time for both parties to walk the talk and keep their promises by accepting the payment plan we will approve. If it’s not resolved I will change the management company,” he added.
“There is a payment problem, 30 per cent of owners are not paying their service charges,” admitted one resident who wished to remain anonymous (UP wouldn’t reveal the percentage when contacted by Gulf News). “But that’s because owners in Motor City are paying some of the highest service charges in Dubai and are not seeing any return,” he said, in reference to annual fees that range from Dh20,000 to Dh40,000 depending on the type of property.
“When everyone else’s service charges are going down across Dubai, ours keep increasing, but we are not getting anything for it.
“Landscaping is horrible, garbage collection is horrible, pest control is a problem, they have awarded tenders to lousy contractors, then out of the blue we see they are building more playgrounds. We already had seven playgrounds, when there are so many other priorities to address why are they adding more playgrounds? They are so out of touch with the community,” added the resident. “These are only a few of the many issues that have remained unresolved for a number of years.”
Homeowners gathered and began engaging UP at the end of 2016, he said, after having noticed a decline in services from 2014 onwards. Since then residents have noticed up to a 50 per cent decline in their investment on properties.
They had long been asking for audits (carried out by Merali’s Chartered Accountants and Registered Auditors), which have finally been received up to 2017.
“But that only details what the money has been spent on, it doesn’t say if we actually got the services for which we are paying,” said the resident.
They also want key performance indicators (KPIs) given to contractors to be published so that they can be scored, held accountable and changed if they are not performing.
“A good number of issues still remain unresolved,” added the resident. “It all culminated in the cooling crisis, but that was just one of many issues we’ve had. The cooling issue was just something that caught the eye of the media, but now, we as owners don’t want everything to get swept under the carpet and forgotten about.
If the OA (Owners Association) identifies a defect in the property and the developer doesn’t address it, what can it do? If [it is a] registered entity, they could directly proceed with a case against the developer and contractors.
“We want Edacom to give us a roadmap of how we are going to get from where we are now to where we should be. We also want proper representation and a voice for the owners. We need transparency, for us to understand where the money is being spent and for us to be able to communicate where the issues are and what the money should be spent on. If they can’t guarantee us that within a timeframe - that we are happy to negotiate - then we will be have to change for a more professional company as we cannot go another year like this.”
Another resident, who also wished to go unnamed, said: “The obvious question is if you don’t like it why don’t you just leave? But we love our neighbourhood and believe in it, that’s why we invested here, it doesn’t have any of the fundamental issues like traffic or infrastructure of other developments. What we have is a poorly managed good community.
“We used to be one of the best neighbourhoods in Dubai, now we have slipped, but to be honest it wouldn’t take much to get us back to being the best because the fundamentals are still there, and residents wouldn’t mind paying exuberant fees if they saw a return.”
The first resident agreed: “We are in a vicious cycle of people not paying because they are not getting a service, but what we need is a virtuous circle - fix a few things, and the ones not paying will start to cough up.”
Seventy per cent are paying however (UP wouldn’t confirm this percentage), and it’s that majority that feel they shouldn’t be punished for the minority. The total missing from that 30 per cent who haven’t paid is also viewed as a negligible amount, according to the second resident, who claimed that as of the 2017 audit (which is the latest to be published), the biggest single entity owing money to the community is UP themselves. UP denied they owed Edacom and the community money, when contacted by Gulf News.
Laws are being updated on a continual basis — most of these are done to resolve or clarify issues that have arisen in real time.
“UP owes the management company millions according to the audit, so it’s not just the owners not paying,” he added. Again UP denied this.
Whereas owners associations management companies should be a voice for the owners, Edacom only get in touch when they want money, said the second resident.
“They continue to be a collection agency, but they are even doing a bad job at that because no one is paying and they are failing to collect.
“It’s not an issue that Edacom are a subsidiary to UP and that we want a third party or independent group, it’s that they are incompetent. UP can hire whoever they want and call it whatever they want, as long as they know how to manage, how to collect and how to spend in a manner that is beneficial to maintaining the value, then no-one would mind.”
Legally owners are allowed to request the change of their owners association management company, but the first resident said that they had long faced resistance.
Depending on the state of the building, pressure has to be exerted on Facilities Managament companies to reduce their costs. This is done both through proactive measures as well as reactive measures.
“We’ve sent several letters to UP and RERA since late 2016 requesting an owners association that represents the community, but for whatever reason they have not assisted or supported us.
“We want a homeowners association with formal recognition from RERA as is included in the law with some teeth and formal and correct interface with Edacom. If they are not delivering we want the right (or a commitment from UP as the developer and RERA as the regulator) to replace them.
“We’ll give Edacom one last chance, but we want it in writing from RERA that if Edacom fail us again they will remove them.”
UNION PROPERTIES RESPONSE
A Union Properties spokesperson told Gulf News, “Union Properties in association with the Real Estate Regulatory Authority (RERA) continues to engage with the MotorCity residents in an effort to enhance the community experience, while ensuring that the EDACOM Owners Association Management provides services that mirror the best community management standards.
“Recently EDACOM and the RERA team, along with a few residents, who had experienced service issues in the past, conducted a site visit through the MotorCity community to address their requirements. It is our endeavour to always elevate the community experience and consistently improve the level of services provided to residents.”
Asked to confirm the percentage of owners not paying service charges, UP said they couldn’t share confidential customer information. UP also denied that they owed Edacom and the community money. “We would like to clarify that is not the case,” they said.
RERA’S RESPONSE
Marwan Bin Galita, CEO of the RERA, told Gulf News, “Dubai Land Department (DLD), through its regulatory arm Real Estate Regulatory Authority (RERA), are keen to establish a safe and transparent real estate environment that guarantees the rights of all parties and contributes to enhancing the attractiveness of our real estate market through the concerted efforts of all developers, investors, service providers as well as the support and supervision of government entities as we wholly support the vision of the wise leadership that aims to position Dubai as an ideal destination to live, work, and invest in. We encourage everyone to cooperate, coordinate, and reach common grounds in the accomplishment of these goals.
“As for the company, it is committed to procedures relating to the management of joint areas, and based on legislation and regulations, the company must seek RERA’s approval for service charges before imposing it on investors, which is what is currently taking place.
“Owners have the right to find out about the expenditure for provided services in joint areas as well as view detailed financial reports compiled by an external auditor, evaluate the services offered, and inform the company of any needed improvement.
“We would like to emphasise that the owner has the right to review all financial statements and evaluate the provided services. Should there be any dissatisfaction with these services, the company shall be notified to take immediate action.
“We are interested in the satisfaction, comfort, and happiness of owners and for them to be in constant contact with the company. For that, the presence of a representative for them in the company is crucial to raise comments and suggestions to improve the quality of services in the community.”
