Dubai’s homeowner rights can be strengthened further


Homeowners need a more direct say in the running of their communities. That would make for a qualitative leap in investor rights.
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Dubai’s recently passed JOP (jointly owned property) Law repealed an earlier one from 2007 and featured some pertinent changes. These extend to:

* Substitution of the owners’ association by a management company.

* An owners’ committee (without any executive powers and with only an advisory role) shall replace the original owners association, and which makes it toothless.

* JOP classified across three categories – large-scale, hotel and others.

* RERA will continue to supervise and control, with powers to appoint/remove management entity.

* Only the Rental Dispute Centre will deal with all JOP related issues. This also could lead to backlogs and this would not help the cause.

* Harsh penalties prescribed for defaults on payment of service fees. However, impartial implementation of the same will need to be seen.

Some drawbacks

The amendments bring more clarity to the way the real estate market will function, but I do feel not all changes are investor-friendly.

Would owners’ committees’ be granted the rights promised by the law, and will the law apply uniformly? Alternatively, will owners’ committees have a similar fate to previously elected interim boards, which never received full legal recognition?

The increasing dependence on the property management Entity to look after the community does leave the property open to exploitation. Unless owners committees are registered and have assertive powers, it may be futile.

The third-party compliances in place also, I feel, have limited impact, for they are acts between two parties that have zero financial interest in the property. These parties need to be strictly and impartially regulated with serious consequences for failing to perform their role. There is always the risk of collusion between management company and developer.

Vest owners with rights

I do believe that the idea of leaving actual owners from the whole process needs to be re-looked.

Article (22) Clause C surely looks to be misinterpreted, for I find it surprising that an owner cannot be a board member if he has leased out his property or even if the property is empty. I would request the authorities to issue the necessary clarifications.

The actual investor/owner is, and will always be the most interested party, in the entire chain and to leave him/her out of the equation does not sound rationale.

I do believe that all the external checks as provided surely help the cause, but unless the actual investor plays the role to perfection and takes care of the property directly, he/she can only stand to be a loser.

A review would be handy

I do believe that these aspects of home ownership need a review in the interest of the future of the property market:

* Defaults by the developer in handing over the assets on time.

* Defaults by the developer in adhering to the quality of the asset.

* Defaults by the developer in payment of the service charges and other related charges, such as for unsold units.

* The irrational charges by the developer/management companies on the pretext of giving various no-objection certificates.

* The various expense heads in a typical service charge invoice. The explained ones… and the unexplained ones.

* Related party transactions in the over-seeing of any community.

* The lack of transparency in dealings between the developers/owners/management companies.

I firmly believe that with the global nature of ownership, recognising these concerns will play a crucial role going forward.

– Gautam Patel is a Dubai based homeowner.

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