Dubai to amend home owners association law?

Dubai is planning to amend the existing owners’ association (OA) law, which will ease the current process of establishing, running and managing of freehold towers, Emirates 24|7 has learnt.

Although the Dubai Land Department (DLD) has not yet responded to questions on the proposed amendments to Law No 27 of 2007 concerning ownership of jointly owned properties in Dubai, sources aware of the move said the announcement to the amendments would be made “shortly”.

“The owners' association law is being amended. These changes will increase efficiency and running of OAs,” sources told this website.

They claimed that only one homeowners’ association has been officially registered with DLD to date - that of Tamweel Tower, gutted by a fire in November 2012.

Senior Director of Real Estate Regulatory Agency (Rera), the regulatory arm of DLD, Mohammed Khalifa bin Hammad told this website that they had registered 385 interim owners' associations  (IOA) till November 2013. Rera has released no figures, thereafter.

“There are a lot of problems out there, which is a major concern to the government. We have been meeting weekly with Rera on registration issues for many of our owners' association clients where we have lodged papers for registration,” a senior executive with a facilities management company in Dubai said on conditions of anonymity.

“There appear to be concerns in relation to the standards of management companies in the market. I suspect there will be some new regulations as it relates to OA management, but not the cancellation of OA,” he added.

Developers face action

A new circular issued by Rera in March this year stated that developers would not be allowed to manage a project if complaints of negligence or mismanagement are received against them in the first year of management itself.

In such cases, the circular states the developer’s power to manage the project will be withdrawn and an IOA will have to be set up.

“In case of receiving of any complaint relating to mismanagement or negligence of the developer of the project in the management of common property during the first year of the completion of the project , which will be the developer in charge of the project management, the developer will be obliged to call for the formation of owners association for the project after the withdrawal of the powers of the project management from him,” the circular, issued on March 10, had said.

A number of developers, in fact, have been managing their projects for a number of years, having not registered the IOAs despite handing over their projects to unit owners.

Service fee

The circular also stated developers will have to form an IOA before claiming any fees for services after the first year of operation is over.

“Developers, who have been in the management of the joint-ownership enterprises a full-one year, have to call for the adoption and establishment of owners association for that project before any claim for any fees of services in accordance with the procedures of Rera,” the circular added.

The circular, citing Law No.27 of 2007, reiterated that the developer would have to submit a financial report to the Rera on the expenses of the service fees of previous years, which should be audited so to obtain approvals required for new fees.

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