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New Dubai law on joint real estate ownership

New Dubai law on joint real estate ownership
by

Issac John

Published: Tue 24 Sep 2019, 9:29 PM

Last updated: Wed 25 Sep 2019, 12:15 AM

The Government of Dubai issued on Tuesday a new law pertaining to the joint ownership of real estate as part a regulatory framework designed to boost competitiveness and enhance investment in the real estate sector in the emirate.
The Law No. (6) of 2019 issued by His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE, in his capacity as Ruler of Dubai, applies to all major real estate development projects and jointly owned properties in Dubai, including those located in free zones and special development zones.
Aimed at enhancing competitiveness and encouraging investment, the law also seeks to ensure the rights of all parties are protected, a statement issued by Government of Dubai Media Office said.
The law is effective within 60 days of its publication in the Official Gazette. The Rental Disputes Centre in Dubai is tasked with reviewing all disputes that fall under the purview of this law. Violators are subject to financial penalties up to Dh1 million. Penalties will be doubled in case of repeat violations within a year up to Dh2 million.
As per the new law, the Land Department will prepare a register for jointly owned real estate properties. This will feature all information related to the land owned by developers and real estate units meant for independent ownership.
All details regarding contracts related to the management of jointly owned real estate development or the common areas and the areas owned by the developer of the project should be registered. The Land Department is responsible for issuing ownership certificates and documents related to individual units in jointly owned real estate properties.
Under the law, the developer is required to submit all necessary documents of the jointly owned real estate project to the Land Department within 60 days of the completion date and receipt of completion certificate.
According to the law, common areas and amenities in the building are clearly defined in the Law, which regulates the ownership of developer-owned areas. The developer should allocate parking space for owners of the unit, which cannot be sold separately.
Jointly owned real estate 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 category constitutes hotel projects, where the developer has appointed a company to manage the common areas. The third category includes real estate projects other than mega projects and hotel projects, where a specialised facility management company manages the common areas, according to the statement.
Under the law, the real estate developer is obliged to put in place a building management system for mega projects and hotel projects managed by them. The system should be approved by Rera before any legal transactions are made for these projects.
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 facility management company cannot charge fees for operating or maintaining common facilities unless it receives an approval from Rera, which is in charge of regulating and inspecting the management and maintenance of jointly owned real estate properties and common areas. The facility management firm should submit reports every six months to RERA on the management of the jointly owned real estate property and common areas. At any time, RERA can request information on the revenues and expenses related to service charges.
According to the Law, Rera CEO can appoint another facility management company in case the developer or the management company fails to ensure proper maintenance of the common areas.
For projects in the third category, RERA can appoint another facility management firm to oversee the common areas of the jointly owned real estate project.
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 responsible 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 the owner. In case the owner refuses to take possession of the finished unit for any reason, this period will be calculated from the date of issuance of the completion certificate.
The facility management is tasked with obtaining insurance coverage for the jointly owned real estate project. - issacjohn@khaleejtimes.com




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