Saturday, May 29, 2010

New Strata Law in Dubai offers power to Home Owners Associations

With the Dubai Land Department, revealing the much-awaited regulations accompanying the strata law, the developers in Dubai are now left with only six months to hand control to Home Owners Associations (HOA).

The guidelines, implementing Law No.27 of 2007 regarding ownership of jointly-owned property in the Emirate of Dubai, gives home owner associations, control over who maintains their units, chose service levels and costs, thereby gaining control over the much-disputed service fee.

The developers are now given six months to bring their current projects under the law, said Gary Budgen, Executive Chairman at PRDNationwide Middle East. Being an international strata law specialist, Gary Budgen has been assisting with drafting the regulations.

This implies that developers will have to register their sub-division plans, defining common areas and private units, and create Home Owners Associations.

The developers could try to prepare documents such as common areas, for the handover in their favour, rather than that of homeowners, he pointed out.

The Chief Executive Officer of BCS Strata Management Services, Peter Crogan, said that transparent strata management guidelines are essential for the stability of the property market. It will offer a range of benefits boosting confidence of foreign investors, increasing property values and offering better quality of life.

Training has already begun for HOAs at the Dubai Real Estate Institute and the Land Department’s survey department will set rules and guide the surveyors when calculating the dimension of units and common area entitlement.

RERA will have the power to temporarily administer a development to deal with owners' breach of community rules. When registered with RERA, the HOA takes control and can hold their first board meeting after three months.

The HOA will be able to scrutinize the services of existing maintenance providers and decide whether to keep them. The Director of Real Estate Relations at RERA, Mohammad Khalifa bin Hammad, in his statement, said that the guidelines clearly stipulates the rights of unit purchasers in relation to the real estate developer.

The law also includes provisions that restricting the developers' ability to enter into supply agreements on behalf of Owners' Associations, he pointed out.

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