UAE home owners far from managing their own buildings

Dubai homeowners are unlikely to take over management of their buildings from developers anytime soon.

Though Dubai has registered 385 Interim Owners' Associations (IOAs) to date, a senior Land Department official told Emirates 24|7 that granting of legal status to IOAs will take more time.

“We have registered 385 IOAs to date. We are not sure when the legal status will be accorded to these IOAs, but we are soon going to register them on the Mollak system,” said Real Estate Regulatory Agency’s (Rera) Senior Director Mohammed Khalifa bin Hammad.

The department’s regulatory agency has already inked a memorandum of understanding with Emirates NBD for opening of escrow accounts for home owners’ associations, but bin Hammad said there were more procedures to be completed before granting of legal status to IOAs.

In September 2012, Emirates NBD became the first bank in the UAE to offer escrow account services to these associations. Until now, service charges are still being collected in bank accounts managed by developers, but in some cases, developers have got board members of IOAs as co-signatories.

In August, UAE-based Hadef & Partners law firm, quoting sources in newsletter, said over the coming months Rera will start uploading of approved owners associations into its “Mollak” system, granting full registration of association boards and ability for approved association to open bank accounts in their own names.

Kent O'Brien, CEO, Strata Global Real Estate Consultants, told this website that no official bank accounts have been opened for owners' associations as they haven’t been fully registered by Rera.

He revealed there bank accounts were being opened by IOAs; however, these were under the license of the OA manager or the auditors.

“We have many accounts with a local bank for example where the IOA is the signatory and authority to transact.”

Despite Law No.27 of 2007 concerning jointly Owned Property in the Emirate of Dubai and its implementing Directions (JOP Law) having been in place for some time, property owners have reported continuing frustration with the full implementation of the JOP Law and their ability to control their community.

“It now appears that progress may be made which may assist property owners. These are exciting times for the Dubai property market across a number of fronts and it will be interesting to assess the impact of this new property related legislation as and when it becomes effective,” Hadef & Partners said.

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