All about the joint-ownership property laws in Dubai
Over the past few years, many new real estate laws were introduced to standardise processes and formalise transactions between developers, property investors and other stakeholders in the UAE real estate market. The legislation pertaining to jointly owned properties (JOPs) was one of these real estate laws in Dubai. Continue reading to find out more about the jointly owned property law in Dubai.
The Dubai Joint Ownership Law
When this real estate law in Dubai was announced, many investors and homeowners were unsure of the exact provisions of the law and how it would affect them in the long-run. To help answer these questions, two prominent figures from the UAE real estate industry to shared their insights with us.
Samer Khalifeh – CEO of Kingfield Owners Association and Shahram Safai, Partner and Head of Real Estate at Afridi & Angell sat down with the host of our Real Estate Bytes show, Mahmoud El Burai, who is the Senior Advisor to Dubai Land Department to answer questions pertaining to the new jointly owned property law in Dubai.
What is the jointly owned property law in Dubai?
The new joint ownership law in Dubai aka Law No. (6) of 2019 is an amendment to Law No. (27) of 2007. It governs and defines the responsibilities of all the stakeholders that are involved with jointly-owned properties in Dubai, including those located in free zones and special development zones. It will bring together developers, owners and facilities management companies, and create transparency around how such properties are managed.
At the time, a statement released by the Dubai government said that the law pertaining to the joint ownership of the real estate in Dubai will “boost competitiveness and enhance investment in the real estate sector” by centralising control of the owners’ duties with the Dubai Land Department (DLD) and the Real Estate Regulatory Authority (RERA).
What were the changes to the law?
As per the new law, jointly owned real estate properties will be divided into three categories for the purpose of management of common areas. It also defines the role the developer will play when it comes to the management of the common areas. The three categories are as follows:
- Megaprojects or master communities – Here the developer is responsible for managing, operating and maintaining common areas and facilities.
- Hotel projects – The developer will appoint a company to manage the common areas in accordance with the regulations set by DLD.
- Other real estate projects – Here a specialised facility management company will manage the common areas.
Along with this, the new law also defines the individual roles for each of the parties involved with jointly owned property in Dubai.
ROLE OF DLD
- DLD will prepare a register for jointly owned real estate properties. The register will include information such as the names of owners, members of the owners’ committee and information about the developers and operators of the project. It will also include pertinent details relating to the building’s management like the share of maintenance costs payable by each owner, the facility management company responsible for managing common areas and amenities of the joint property.
- DLD will also register all contracts related to the management of jointly owned real estate development or the common areas and the areas owned by the developer. The developers must also clearly define the common areas and amenities in the building.
THE ROLE OF RERA
- RERA will approve fees for operating or maintaining common facilities that can be charged by the facility management company.
- RERA will be 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.
- In cases where the developer or the management company fails to ensure proper maintenance of the common areas, RERA can intervene and appoint another facility management company.
ROLE OF THE DEVELOPER
- Developers must submit all necessary documents of the jointly owned real estate project to DLD within 60 days of the completion date and receipt of completion certificate. The deadline can be extended by 30 days. In the case that the developers fail to do so, DLD will request the documents from any other party and will charge the developer for the related fees and expenses.
- The developer will be responsible for identifying and employing a building management system for mega-projects and hotel projects managed by them, which will be approved by RERA.
- Developers will be responsible for any damage to the structure of the jointly owned real estate property for a period of 10 years, starting from the date of issuance of the completion certificate. They will also take on replacement and repair of any faulty items within the individual units for a period of one year from the date of delivering the unit to the owner.
- RERA will handle/solve any disputes via the Rental Disputes Centre in Dubai.
ROLE OF THE OWNERS COMMITTEE
- The owners’ committees, previously called the owners association will now comprise of not more than nine members who will be selected by RERA. This committee will be established when 10% of the joint real estate units are registered. Developers can only be a part of an owners committee if there are unsold units.
- The committee will be responsible for overseeing the proper management of common areas and reviewing annual budgets. The owner is also required to pay the management his share of the cost of maintenance of the jointly owned real estate property.
ROLE OF THE FACILITIES MANAGEMENT COMPANY
- The facility management company must obtain insurance coverage for the jointly owned real estate project.
- Facility management firms will oversee the common areas of the jointly owned real estate project which belongs to the third category defined by the law.
How will the new jointly owned property law in Dubai benefit owners and tenants?
As we can see by the roles stipulated in the law, developers and facilities management companies will all be held accountable for the maintenance of the property’s common areas and addressing the owners’ needs. From the quality of service to the fees attached to it, everything will be regulated and vetted by RERA and DLD.
Here’s what Haider Ali Khan, CEO of Bayut had to say about the jointly owned property regulations in Dubai:
One of the good things about being a part of the UAE real estate fraternity is the continued support we receive from the government through thoughtful initiatives meant to safeguard everyone’s interests. The legislation for jointly owned properties in Dubai is another such step which will generate more interest in the UAE real estate market and build investor confidence. The high level of scrutiny from the DLD and RERA in all the proceedings between stakeholders will further increase transparency. This gives homeowners and potential investors confidence that the property they purchase will be maintained to the highest standards.
FAQS
IS BUYING A PROPERTY IN DUBAI A GOOD IDEA?
Wondering if Dubai is the right place to make a property investment? Here are the pros and cons of buying a property in Dubai to help you make the final decision. If you are in search of a property, take a look at our Market Trends section for key insights.
If you want to make an investment with your business partner, ownership of jointly owned property in Dubai is also an option. With Mollak, managing a JOP wouldn’t be a problem.
A JOP has to be registered by the developer in a specially designated property register with the (DLD). Documents required include jointly owned property declaration (JOPD), site plan and the articles of association of the owners association (OA).
A JOPD is an important document as it presents details like the number of units, the building plans, the type of usage of the units, the description of the common areas, the allocation and recording of the “unit entitlement” of each of the units, the community rules, waste management, water and energy efficiency measures with which the OA.
These rules in JOP don’t apply on properties in DIFC. The free zone has its own set of rules.
You can also consider real estate investment visa in Dubai. If you are making an investment, make sure you adhere to the compliance required for property transactions in the UAE.
WHAT ARE THE THINGS TO CONSIDER WHEN PLANNING TO BUY AN OFF-PLAN PROPERTY IN DUBAI?
What does off-plan property mean and is it a good investment? Read our comprehensive guide to find out all that you need to know.
IS IT LEGAL TO SHARE ACCOMMODATION IN DUBAI?
Yes, it is. However, there are certain stipulations that need to be adhered to. Here’s our guide on legally sharing accommodation in Dubai.
Jointly owned property law in Dubai has certainly been a success and it has made the processes simpler for all stakeholders involved. Joint ownership of property in Dubai has opened many opportunities for local and foreign investment. So, you can also consider the ownership of jointly owned property in Dubai without any legal concerns. Jointly owned property regulations in Dubai ensure that rights of all parties involved are protected.
Dubai Land Department jointly owned property law is another visionary step taken by the government to facilitate businesses and residents. You can also read about commercial companies law, one of the more recent law amendments.
Despite all these steps, there are times when conflicts do arise. In such cases, the RVS System is a viable option.
