Knowing your rights

The Greens has created an association that aims to address common ownership and maintenance.

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One of the most telling signs that Dubai may be on the road to becoming a property buyer's market is that sellers do a lot more negotiating than they used to. Now, brokers and agents face a barrage of questions from potential investors about service charges, penalties for construction delays and whether or not they will provide an escrow agreement. If there isn't more certainty soon as to the actual costs of owning a property, new buyers may just decide it is worth waiting, spending a little more money and buying into an established community later on.

In an announcement perhaps aimed at stabilising confidence, the Dubai government said it will enact new laws this year which will strengthen both off-plan investors' and homeowners' rights. The new laws will clarify who owns the common areas of high-rise buildings, and specify who is responsible for managing the fees levied on buyers for maintenance of common areas within communities.

Common areas consist of courtyards, lobbies, parks, lakes, footpaths, bicycle paths, swimming pools and playgrounds. In some communities common areas fall between neighborhoods, and both share the facilities. Sometimes the common areas include retail outlets serving the communities. Some common areas border adjacent properties by other developers.

It is certainly difficult to determine responsibility for future maintenance, especially when communities are just established and are in a state of flux. However, if the service charges were determined as accurately as possible during the planning stages of a new development, the end purchasers would have more certainty as to the actual costs of owning a home before they buy.

This would also lessen the need for any aggressive increase of service charges in later years, when the actual costs of maintaining the common areas of communities is going to really be known for certain.

When the new regulations come, homeowners in Dubai who already live in their homes may see changes to their service fees, as it becomes more clear how the common areas are going to be managed and maintained.

In some Dubai communities, residents have already formed committees to get involved in the way their service fees are going to be spent. They are interim committees at present, because they await the passage of an Owner's Association Law, which is said to be forthcoming. An example of proactive investors staking claims to rights that have yet to materialise.

The Arabian Ranches Ownership Association is not a legal entity yet, but it is expected to be once the law is passed. Right now, it is a committee made up of four core members, plus a number of other residents who work in other capacities as advisors, neighborhood representatives and administrative assistants. The Arabian Ranches is an Emaar property development with a rising population of at present 3000 residents.

The association is trying to automate the process of setting up subcommittees to deal with specific issues like safety, finance and accounting and to keep tabs on community developments. Registration is open to all the residents by use of its website (www.arrcdubai.com).

At the Arabian Ranches, service charges are US$1632 per month, and there are 6000 properties in the community. That makes US$9,792,000 per year in funds for common area maintenance and other service requirements.

Likewise, Emaar's The Meadows and The Springs communities also have an interim steering committee which oversees both, made up of seven members who represent the residents of nearly 6000 villas.

Service charges are US$1958 per year, and have not changed since properties were first offered for sale. In total there are nearly US$11,696,000 in service charge fees collected annually.

Emaar's Dubai Marina community also has a committee, but it is reportedly not doing as well as the others in cultivating a working relationship with the developer.

Richard Richardson, Chairman of the Arabian Ranches Ownership Association explained, stressing the importance of a gentle approach. "We don't go into meetings [with Emaar] and pound on the table and make demands of them. You can't be blunt or speak harshly because it sours the working relationship with the developer from the start," he said.

"We have found Emaar to be quite easy-going and open to our suggestions, and we have been able to work things out through mutual discussion and collaboration. They recognise the importance of having community involvement in the decision-making with regard to important matters affecting owners and residents," said Richardson.

"Although we have nothing in writing from Emaar, we expect that once the Owner's Association Law is passed, we [the residents] of Arabian Ranches will be allowed to manage the common areas of the community on our own," he said.

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