x Abu Dhabi, UAEThursday 27 July 2017

Dubai homes in on owners fees

Property executives are moving to standardise the measurements used to calculate home values and fees.

Homeowners stand to save millions of dirhams in fees if an effort to standardise how property is measured succeeds. Pawan Singh / The National
Homeowners stand to save millions of dirhams in fees if an effort to standardise how property is measured succeeds. Pawan Singh / The National

Homeowners stand to save millions of dirhams in fees if an effort to standardise how property is measured succeeds.

Some developers include balconies, outdoor spaces and a percentage of common areas in calculating a property's size.

"At the moment, every developer measures completely differently," said Ron Hinchey, a director at the property services company Cluttons. "It's all over the place."

Even basic room sizes are in dispute. Some developers measure rooms from the centre of walls instead of from the surface inside the room, which can make a significant difference in the size of an apartment.

"I hear horror stories every day," said Myles Bush, the director of Powerhouse Properties. "People buy a 2,000 square foot apartment off-plan, then they get the measuring tape out and it's 1,500 sq ft."

The measurement inconsistencies have broad implications for homeowners. The data are often used to calculate association and facility fees, and the variations can affect the resale value of a property.

"You need a common practice so everybody knows what they are buying and what they are getting for their money," said Matthew Green, the head of consultancy at CB Richard Ellis in the Middle East.

The local chapter of the Royal Institution of Chartered Surveyors (Rics) and a committee of local executives have been working with the Real Estate Regulatory Agency in Dubai to create guidelines based on the UK system. A draft has been circulated within the industry.

It proposes the use of "gross internal area" to exclude outside space from calculations of floor area. In the UK, the standard is commonly known as "the carpet area", referring to "livable space" in a home.

The Dubai draft includes garages, hallways and stairwells in the gross internal area calculation but excludes open balconies, fire escapes, canopies and external structures such as greenhouses and storage areas. Rooms would be measured from the "internal face of perimeter walls".

"I certainly think it is a key step for a market to adopt standardisation," said Jim Drysdale, the director of Rics in the Middle East. "There is a potential for misunderstanding until you get one system that everybody buys into."

Standardising the measurement system would aid transparency and create more confidence in the property market, executives say.

"For a market to operate efficiently, you want to eliminate uncertainty," Mr Drysdale said.

Standardisation would also better reflect the real value of property.

"From a valuer's perspective, unless you have a standard code, it is very hard to compare one price to another," Mr Hinchey said.

The proposal is only under consideration in Dubai, but it could create momentum to implement standards in the other emirates.

"Logic follows that if it is accepted in one part, then we could see the same approach in other emirates," Mr Drysdale said.

The UAE is already moving towards uniformity. This year, the Government decreed that the property industry adopt the metric system from November 11.

At present, Dubai properties are often listed in square feet, while Abu Dhabi uses square metres. The change will have little impact on sales, but it will help the public to compare and evaluate properties quickly, executives say.

kbrass@thenational.ae