Obey the Law or Face Action, Property Developers Told

Martin Croucher
Filed on March 6, 2009

DUBAI - With Union Properties continuing to demand hiked maintenance fees from home owners despite a freeze on increases by regulators, the Real Estate Regulatory Authority (Rera) on Wednesday said that property developers needed to be compliant with the law or face action.

“We are currently speaking with them on how to be compliant with the law on owners’ associations. They have to be compliant or else they will face action,” he said.

Home owners in the Green Community and Uptown Mirdiff have received letters from Union Properties threatening fines if they do not pay fees that in some cases have increased by 40 per cent.

However at the beginning of February, the Real Estate Regulatory Agency (Rera) said that maintenance fees must remain frozen for 2009 until an owners’ association is created to approve the budget.

“They told me that I have two weeks to pay the fee, otherwise I will have to pay a fine for late payment,” said one resident of Uptown Mirdiff, whose maintenance fees have increased from Dh10,750 per year to Dh15,000 for her two bedroom apartment.

The resident said that she was not going to pay the maintenance fees until they were reduced to 2008 levels.

Residents of the Green Community have also seen an increase of up to 10 per cent, with one resident paying Dh24,000 this year compared to Dh21,700 in 2008.

In an interview on February 22, Lesley Sayle, Chief Property Officer from UP, said that Rera had no jurisdiction over the company’s developments.

“In the past they have not asked us to register our contracts,” she said. “The Green Community and Uptown Mirdiff are leasehold development and Rera only covers freehold.”

However, CEO of Rera, Marwan bin Ghalita said at the time that the agency covers both leasehold andfreehold developments.

“Rera regulates all real estate in Dubai, and the Land Department registers all real estate rights and transactions,” he told the Khaleej Times. “The law is clear.”

UP had previously used doubts over Rera’s jurisdiction to claim that owners’ associations would not need to be created for the Green Community and Uptown Mirdiff.

However, following the clarification, the company has since entered in talks with Rera to establish an owners’ association, bin Ghalita said.

However, the Khaleej Times has received an email sent to a resident of Uptown Mirdiff which states that the area ‘not fall within Rera’s jurisdiction’. The email was dated March 2.

Bin Ghalita said that if a developer doesn’t register the contract then owners can register their agreements with the Land Department themselves.

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