- City Fajr Shuruq Duhr Asr Magrib Isha
- Dubai 04:25 05:43 12:19 15:46 18:50 20:09
What other option was left for Interim Owners' Association (IOA) of the Golden Mile, when it decided for a two-hour deactivation of the parking access cards of defaulting owners, wonders Alistar McCracken, CEO of Novus Community Management, recalling the incident that took place last Sunday on Palm Jumeirah.
Owners who had not been paying their service charges were unable to enter the parking because their access cards were deactivated. Guards refused them access following orders. However, drivers with valid access cards could not enter too because of the cars that had stopped in front of the entry gates. Soon the police was involved.
“There were people who claimed to have been denied access to their property. Now, that would have been against the law,” explains Alistar. “People were never denied access to their property.”
After two hours Novus Community Management, a company that lends it services to IOA’s and Owners' Associations (OA’s), had agreed with the IOA board that the cards would be reactivated. “But the only option that is left now is legal action,” he explains.
However, it is not that simple.
Currently, the service charges for the Golden Mile, a 10-unit building block located on Palm Jumeirah is Dh17 per square foot, a little above the average service charge in Dubai, which is Dh16.48 per square foot, explains Alistar.
“However, the per square foot measurement is not a good tool to compare, because service charges are highly dependent on the nature of the building,” explains Alistar. “The Golden Mile is made up of low-rise units, of which each unit requires a reception, a guard, etc. A high-rise building might require lower service charges.
But, according to some owners, the service charges are too high and they refuse to pay the exorbitant amount.
“Some owners appear to find the service charges too high, or they do not understand why they have to pay service charges at all. Sometimes they do not understand the concept,” explains Alisar. “But when they sign the contract for handover with the developer, the charges are mentioned. Furthermore, the budget is approved by the Real Estate Regulatory Agency (Rera). The charges are legitimate.
As a result of defaulting owners, the bank account of the IOA is not sufficient to cover the costs that come with living in the community. “There is a serious lack of money. When we signed to manage this community 18 months ago, only 36 per cent of the charges were paid over a three-year period. We have been able to increase that to 80 per cent, but there are still people refusing to pay. Until now, the developer has been compensating for the shortages, but it is not their responsibility.”
The move to deactivate parking access cards of defaulting owners was a well-considered decision taken by the IOA board as a last resort to get the remaining 20 per cent of defaulters to pay the charges, says Alistar. “We had given 30-days notices to both the owners and their tenants. In these 30 days Dh1.5 million in service charges was paid.
“Now, there are not many options left. The service charge collection procedure acknowledged by Dubai Land Department allows for legal action, after certain steps have been taken over a given time period. That point has been reached now. But the problem is that the IOA of Golden Mile has not yet been registered as an OA, which theoretically strips them of the right to take legal steps, according to some lawyers.
“Taking legal steps as an IOA has never been done before, it yet has to be tested. At this moment the IOA does not know which step will be taken next. But hopefully, it will be registered as an OA in July this year,” says Alistair.
According to Novus’ CEO, the registration of IOAs as permanent OAs will prove to be efficient for the community service sector. “During the last 2-3 years, Dubai has moved through a period of implementation of the Joint Property Law, and of education about property ownership and how this works. As a result of this implementation and the appointment of proper management, service charges have decreased by 20-30 per cent.
“When IOAs are legal entities, I expect an even further push in the decrease of service charges.”
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