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New law issued to regulate joint ownership of real estate in Dubai

New law requires developers to submit all necessary documents of jointly owned real estate projects to the DLD within 60 days of the completion date

The law, issued by Sheikh Mohammed bin Rashid Al Maktoum, UAE vice president and Prime Minister and Ruler of Dubai, is aimed at “boosting competitiveness and enhancing investment” in the real estate sector while ensuring the rights of all parties are protected.
The law, issued by Sheikh Mohammed bin Rashid Al Maktoum, UAE vice president and Prime Minister and Ruler of Dubai, is aimed at “boosting competitiveness and enhancing investment” in the real estate sector while ensuring the rights of all parties are protected.

A new law has been issued to regulate the joint ownership of real estate in Dubai.

The law applies to all major real estate development projects in the emirate – including those located in free zones and special development zones – and commands fines of up to AED 2 million per year.

The law, issued by Sheikh Mohammed bin Rashid Al Maktoum, UAE vice president and Prime Minister and Ruler of Dubai, is aimed at “boosting competitiveness and enhancing investment” in the real estate sector while ensuring the rights of all parties are protected, said a report from state news agency WAM.

Clear rules and more transparency

According to the law, developers are required to submit all necessary documents of jointly owned real estate projects to the Dubai Land Department (DLD) within 60 days of the completion date.

The DLD will prepare a register for all jointly owned real estate properties featuring all the information related to the land owned by developers and real estate units meant for independent ownership.

The register will also feature names of owners, members of the committee of owners, and the building management chart outlining maintenance procedures in common areas.

It will also include details of the share of maintenance costs that each owner should pay, the facility management company responsible for managing common areas and amenities, and information about the developers and operators of the project.

As per the new law, facility management service providers must submit reports every six months to Dubai’s Real Estate Regulatory Agency (Rera) on the management of the property and common areas.

At any time, Rera can request information on the revenues and expenses related to service charges.

Violators are subject to financial penalties up to AED 1 million. Penalties will be doubled in case of repeat violations within a year up to AED 2 million.

Three categories

Jointly owned properties are divided into three categories for the purpose of management of common areas.

The first category includes mega projects, where the developer is responsible for managing, operating and maintaining common areas and facilities.

The second constitutes hotel projects, where the developer has appointed a company to manage the common areas.

The third includes projects other than master developments and hotel projects, where a specialised facility management company manages the common areas.

The owners’ committees for the first and third categories should not include more than nine members selected by Rera, and should be established when 10 per cent of the joint real estate units are registered.

The developer cannot be part of an owners’ committee unless there are unsold units.

Legal responsibility

The law also covers maintenance and repairs responsibilities.

The developer is responsible for any damage to the structure of the jointly owned real estate property occurring within a period of 10 years, starting from the date of issuance of the completion certificate.

The developer is liable for replacing and repairing any faulty items in the individual units within a period of one year from the date of delivering the unit to an owner.

The new regulation follows Sheikh Mohammed’s recently announced plans for a higher committee of real estate planning in Dubai.

The new law is effective within 60 days of its publication in the official gazette.

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