Friday, February 23, 2007

New Condominium Law to take effect shortly

According to top officials, it is said that a new condominium law that defines the rights of apartment owners is likely to be introduced in Dubai towards end of this year.

Currently there are lots of uncertainties pertaining to the right of condominium and apartment owners with regard to communal areas and the amenities in multi-storey apartments. There have been complaints from owners regarding high maintenance fees or the developers have been refusing to co-operate with residents’ associations.

The new law will clearly distinguish the position of developers and the owners, and boost the confidence of investors in the Dubai property market.

The Director of Marketing and Development in the Dubai Land Department, Mohammad Sultan Thani, mentioned that the Law is in the draft stage, and is yet to be finalized. The Laws require approval from the Government.

He added that the Law will also clarify the authority of residents’ association, including the basis in which the committee member should be elected, and the elected members will have to register with the Land Department. Currently most problems in the market are based on issues between the resident associations’ and developers over maintenance. He added that while the apartment owners have already entered into ten or fifteen year contracts with the developers for maintenance, the residents’ groups should eventually take charge of the maintenance.

The department also has plans to bring into effect a ‘trust law’ wherein developers are required to pay the money deposited by buyers into an escrow account, which is independently audited. This law will be special for Dubai, as the method of construction here is different in comparison to other countries.

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