Developers are not “genuinely” trying to hand over building management to the owners association because of the financial gains associated with it, say experts.
“I don't think there is a genuine attempt being made to hand over to the owners. As other revenue streams dry up, developers see the opportunity of making a profit from service charges/interim owners association (IOA) so there is little incentive to register the owners association as required by the regulations,” Graham Yeates, Head of Owners Association Management, Cluttons, told Emirates 24/7.
Click here to find out why a majority of Dubai's Owners' Associations are not legal entities
Ludmila Yamalova, Managing Partner of HPL Yamalova & Plewka JLT, mentions that developers still continue to resist giving up control of their buildings.
“It is difficult to predict how much money they are making off of managing buildings, as they do not disclose such information. But presumably, the only reason they would continue to want to control buildings is for financial gain.”
Brent Baldwin, Associate, Hadef & Partners, however, has a different view.
“There is a growing recognition among developers that these laws are here to stay. We should see many more developers complying over the next 12 months.”
Click here to read more about Dubai's property lifeline for owners and investors
Due to the scrutiny undertaken by boards and Real Estate Regulatory Agency (Rera) of budgets, Kent A O'Brien, CEO, SG Community Management Services, states that the environment has changed.
“Many developers are stating they want to release themselves from the OA issues and hand over the building. Those that cling to the past will be in conflict with the OA and swiftly removed once the OA is registered.”
In August 2010, Cluttons estimated that Dubai would have almost 2,000 IOAs. According to Rera, 271 IOAs have been registered with it while it expects IOAs to manage nearly 70 per cent of the freehold properties by year-end. The regulatory agency had set an October 2010 deadline for real estate developers to complete all documentation process and register owners’ associations.
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