x Abu Dhabi, UAETuesday 25 July 2017

Owners and tenants face issues as laws catch up with property explosion

Areas affected include communities that rose from the sand in the boom years, such as Discovery Gardens, International City, Jumeirah Lakes Towers, Jumeirah Beach Residence, The Springs and The Lakes, The Palm Jumeirah and Jumeirah Islands.

DUBAI // Disputes over cooling charges, unpaid service fees, poor maintenance, unregistered owners' associations and a lack of promised facilities are among the problems facing residents in freehold developments across Dubai.

The explosion in the emirate's property sector over the past few years has highlighted a gap between the growth of the country and legislation to protect the rights of people who invest in property.

Some of the problems experienced by residents can be seen as teething problems, to be expected in any rapidly expanding city. Others are more serious and point to a lag in keeping track of Dubai's development.

Areas affected include communities that rose from the sand in the boom years, such as Discovery Gardens, International City, Jumeirah Lakes Towers, Jumeirah Beach Residence, The Springs and The Lakes, The Palm Jumeirah and Jumeirah Islands.

Each community is unique and buyers and tenants were attracted to them for different reasons, be it affordability, exclusivity or a beachside lifestyle.

But despite the varied developments there are some common issues affecting each neighbourhood, in particular unregistered owners' associations that leave many people who bought property unable to influence how their community is run.

This has had a knock-on effect where owners, unhappy at how management and maintenance of their community is being handled, are refusing to pay service fees.

In Discovery Gardens, many owners are refusing to pay service fees because they disagree with how the development is being maintained.

In JLT, those who do pay fees remain at the mercy of those who do not, and risk having air conditioning and access to communal areas cut off. In both cases, legally binding owners' associations would have the power to employ new management companies to improve communal areas.

But the problems affecting residents in each area are slowly being ironed out by property officials and developers.

Ludmila Yamalova, the managing partner at the legal consultancy HPL Yamalova & Plewka - JLT, which works closely with property owners, said many people who bought in felt frustrated.

"Many people saw Dubai as a big investment opportunity and one of the key attractions was the offer of a three-year residential licence for buyers," Ms Yamalova said. "Unfortunately, that never materialised."

She said much of the confusion about service fees was because the level was not made clear in many contracts.

"One of the main issues is the fact that owners' associations have not been registered and as a result have no teeth to do anything," Ms Yamalova said. "The Land Department say this will happen soon, but so far people are still waiting."

She said the infrastructure for independent community-management companies and surveyors was in place to allow owners more say in how their communities are run.

Craig Plumb, the head of research for the Middle East and North Africa at the consultancy Jones Lang LaSalle, said lack of enforcement of the regulations protecting owners' rights was making Dubai a less attractive place to buy.

"The problem isn't that there are no rules," Mr Plumb said. "There are rules but they aren't being enacted."

He said the issue of unpaid service fees varied between developments in Dubai.

"It is different in each area but one of the reasons the issue of unpaid service fees arises is that many of those not paying are based overseas," Mr Plumb said.

"These people need to be encouraged and told it's in their best interest to pay because, at the end of the day, the value of their property is declining when the charges aren't paid and the AC and power are cut off. The service fees go into making sure communal areas are properly maintained and that is one of the things that can help to attract tenants."

Residents have also been struck by high district-cooling charges. In Jumeirah Islands, residents have seen charges for use rise by 150 per cent.

"District cooling is supposed to work best when it's used on condensed high-rise buildings," said Matthew Green, the head of research at the property broker CBRE. "But the areas where it's been used by some developers has been expansive and low-rise developments.

"The costs in terms of the infrastructure are being passed on to the building owners directly. Developers are getting their infrastructure costs back by billing residents."

nhanif@thenational.ae

mcroucher@thenational.ae