Dubai's RERA to regulate property maintenance

Wednesday, 18 February 2009 12:52 AM

Dubai's property watchdog will issue rules for a new system enabling owners and developers to administer jointly owned property developments as it looks to further regulate the emirate's real estate sector.The Real Estate Regulatory Authority (RERA) will issue four regulations in March which will create the legal framework enabling developers and owners to become members of owners associations, which will be registered with RERA, it said in a statement on Tuesday.

The associations will be responsible for administering and maintaining the common areas in their building or villa communities, it said.

"Any legal support is going to help with transparency and confidence and we would like to continue seeing these new laws taking shape," said Sana Kapadia, vice president, equity research, at EFG-Hermes.

The property watchdog, since it was set up in 2007, has introduced a series of rules and regulations aimed at improving the emirate's real estate sector.

Last month it banned raising rents of residential units in 2009 unless rent values were less than 75 percent of an average set by the regulator, in an effort to curb soaring rents.

In the statement, it said service charges for buildings that have been handed over will be frozen at rates that were applicable in 2008, unless rates are for a lesser amount or have been approved by RERA.

The freeze will last until the first General Assembly of the Owners Association, which will be held within three months of registration, it said.

Last week the property regulator introduced a new rule to curb increases in service charges from developers, who have been accused of profiting from annual fee hikes and whose actions have left homeowners up in arms at the spiralling costs.

"It's a positive move and should help reduce observed discrepancies in the market," Kapadia said.

Charges for homeowners in Jumeirah Beach Residence, which was developed by Dubai Properties, rose to 21.75 dirhams per square foot from 9.5 dirhams in September, Abu Dhabi-based newspaper The National reported in December.

Service charges for buildings that are about to be handed over, or are in the process of being handed over, will be subject to the approval of RERA, and will apply until the first General Assembly of the owners association, it said. (Reuters)

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Posted by: Bhagwan Saturday, 21 February 2009 7:49 PM[UAE] - UAE

I agree with lot of you on the issue raised. But one thing that Vinay has suggested I second that. As lot of property have been delayed and the cost of construction gone down, RERA should get involved and help the investors to get back the difference in cost of construction to them. When the cost were high they made good money now that the cost is down they should refund the difference or adjust with the remaining payment plan.

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Posted by: Vinay Friday, 20 February 2009 10:05 AM[UAE] - UAE

Good news that RERA is trying to regularize the rents & maintenance, now they must look into the projects which have delayed for 2 years and above as this is a very big problem for the investors. Funds are blocked moreover with everyday passing the cost price is increasing, as those funds could be utilized to make profits RERA must do something to get compensation to investors for the delay and this time is right as the construction cost has gone down.

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Posted by: Zafar Abbas Thursday, 19 February 2009 9:18 AM[UAE] - Canada

Hamid has touched the point, but this is not only the maintenance fee. There are no rules and regulations starting from booking to delivery delays and management to maintenance. Just wait and see when the so called regulation heavily tilted in favor of developers will be introduced. Why the developer has to charge you a fee when you sell your property?

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Posted by: Hamid Thursday, 19 February 2009 12:11 AM[UAE]

Developers were getting real greedy with maintenance fee. For example, I can't understand why 20 AED/SQF maintenance fees for new Emaar apartments in Dubai Marina. Especially for the first year, since the whole building is fully under warranty, so all the management had had to pay was utility, guard and cleaning staff, who can be hired very cheaply in Dubai. In U.S., which the labor is at least 8 time more costly, I used to get free valet parking, staff carry my grocery to my home, professional counsiar service, full time on site manager, indoor and outdoor pool, Jacuzzi dry and wet sauna , very large health club, Tennis ground, water paid for all units, insurance and etc., in a 20 year old building, which certainly need much more maintenance than brand new o, such as the ones in Dubai. All this, for 15 AED/SQF!

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Posted by: Zafar Abbas Wednesday, 18 February 2009 8:14 AM[UAE] - Canada

Whenever on my visits to Dubai real estate agents tried to lure me into purchasing a property, my answer was always same" This is an unregulated market and i don't know what will come later and how the relationship with developer will be governed." The rules are regulations shall be introduced before the business itself. People should be in for a big surprise as the rules will be heavily in favor of developer.

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