Associations of property owners in the Dubai International Financial Centre will be able to open bank accounts to help them manage services provided on their premises.
DIFC property owners given new rights for management
Associations of property owners in the Dubai International Financial Centre will be able to open bank accounts to help them manage services provided on their premises, in a move giving them financial control of their own services.
Emirates NBD has signed an agreement with the DIFC property registrar, allowing it to offer bank accounts for groups of owners of residential and commercial units in the financial free zone.
The move will allow owners' associations to pay their own suppliers and service providers. Until now, they have had to pay developers directly for upkeep. "We're in the process of doing it now with Emirates Financial Tower", said Kent O'Brien, the chief executive of Strata Global Group, a community management company. "It's taken a number of years to get the planning completed and the titles finalised."
The new rule should generate greater trust and attract local and international investors to Dubai's property sector, said Mahdi Kazim, the general manager for large corporates and global banking at Emirates NBD.
"Emirates NBD is now able to open escrow accounts for owners' associations in the DIFC, into which collection of service charges contributions from owners are deposited, and their disbursement is regulated as per DIFC guidelines," he said. Disagreements in the free zone over service charges have proven much less rancorous than on the Palm Jumeirah, where the developer Nakheel became embroiled last year in a high-profile battle with tenants over unpaid fees.
The signs of progress for DIFC owners' associations would not affect those elsewhere in the emirate because of the free zone's separate legal infrastructure, said Michael Lunjevich,a partner and head of property at the law firm Hadef & Partners.
"There are laws that achieve the same general purposes in Dubai," he said. But laws passed in 2007 had not produced any legally entitled owners' associations elsewhere, he added. "If they actually deliver and register the owners' association and body corporate as a legal entity, and transfer all the money in there then there's something special."