New regulations will force developers in Dubai to get clearance from property regulator RERA before they can collect any service charges on jointly owned properties.
The Strata Law, which came into force on Tuesday, will also make it mandatory for developers who are constructing projects to submit their drawings to the Land Department’s survey section for approval so that rights to communal areas are defined, said Marwan bin Ghalita.
RERA also has the right to temporarily administer a development in case of breach of rules by owners, he said in comments published by UAE daily Emirates Business.
“The guidance will give investors more confidence. This will make the market more mature and transparent,” he told the paper.
Last month, CB Richard Ellis said high service charges imposed by developers in Dubai needed to be addressed to restore confidence in the market.
The property company said that the issue of service charges was likely “to be a major talking point” this year.
The report said that the current level of charges amid falling rental values was impacting rental yields and putting off would-be investors.
“Service charges across freehold locations remain a concern for both current and would-be investors. Falling lease rates have served to accentuate excessive service charge rates set by developers during the peak,” Mat Green, associate director – Research and Consultancy, CB Richard Ellis, said.
“[They are] something that will need the proper attention of the Real Estate Regulatory Agency (RERA) to help further transparency and in order to stimulate and encourage greater investment activity moving forward,” he added.
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