Monday, May 31, 2010

New Dubai property ruling for the ‘common’ good

New Dubai property ruling for the ‘common’ good

Home owner associations managing service levels and controlling service fees transparently – ‘good for the market’ says expert.

Dubai property owners now have the opportunity to play an active role in the management and operation of their towers and communities as the new regulations which provide the framework for the ‘Dubai Jointly Owned Property Law’ (Law No. 27) has been released, which will provide for the legal establishment of home owners associations.

“Now that the much anticipated and long awaited regulations are effective, the dawn of a new era in the Dubai property market is upon us. This legislation will bring much need transparency, guidelines and RERA directive to the emerging industry of association management. It is good for the market,” said Nicole Betts, Head of Association Management, at Dubai-based Asteco Property Management.

Until now the way in which jointly owned freehold property has been operated has not been regulated, it has been left up to the developer to provide property management services or outsource them to facility management companies and service charges have been calculated and collected by developers.

“These methods of operation have been widely detrimental resulting in a poor level or lack of services such as cleaning, security, pest control and maintenance of the buildings facilities and an inaccurate representation of service charges to the market due a multitude of factors,” said Betts.

As with any new regulation, there is a period of adjustment and property owners, developers and service providers will no doubt face challenging times ahead for as full understanding of the regulations and their implementation becomes understood.

“The effect on the property industry will ultimately be a positive one, providing much needed transparency and disclosure on the operating costs for projects as well as project specifications and contractual arrangements,” added Betts.

Asteco Property Management manages several informal owners associations in Dubai and its association management team recently attended the RERA ‘Owners’ Association Management Program’ at the Dubai Real Estate Institute.

“We intend to be one of the first organisations to be licensed by RERA to manage owners’ associations as well as providing both developers and property owners with professional consultancy services to assist them with the compliance and transition of their developments,” added Betts.
These new regulations will certainly reassure overseas investors. Transparency is essential especially for foreign owners and to now have an owners association to help protect their interests will certainly boost confidence in the Dubai market.
Historically, on occasions, there have been challenges in collecting service charges from owners, some refusing to pay believing that they were not legally obliged to do so. The regulations will bring much needed legal support which will ultimately enable the owners association to file a lien (security interest) over a unit where the owner refuses to pay their service charge obligations.
“In the current economic climate, investors more now than ever need their properties to earn their keep, providing a continuous income stream and optimal return on investment. A well presented and managed building always initially attracts a better quality of tenant and most importantly retains them longer,” said Betts.

Photo caption: “We intend to be one of the first organisations licensed by RERA to manage owners’ associations,” Nicole Betts, Head of Association Management, at Dubai-based Asteco Property Management.

Asteco, a major regional and international real estate services firm and the largest property services company in the United Arab Emirates, was founded in Dubai in 1985. Asteco offers independent market analysis, design development consultancy and valuation services, sales and leasing services, as well as asset and property management services.

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