x Abu Dhabi, UAEFriday 28 July 2017

Slow start for Strata Law property owner associations

A month has passed since the strata law was enacted, and some homeowners are looking to Dubai regulators because they say developers are dragging their feet.

Many developers are still setting up the interim owners' associations recommended by Rera to prepare for the handover.
Many developers are still setting up the interim owners' associations recommended by Rera to prepare for the handover.

DUBAI // Property owners' associations say developers are stalling on the process of granting their groups the legal standing to which they are entitled.

It has already been a month since the deadline passed for developers to register the new associations with the Government. Some have, and some have not.

In cases where the developers have handed in the paperwork, the owners are waiting on the Real Estate Regulatory Authority (Rera) to officially register them. It is a big undertaking, considering the volume of paperwork required for each owners' association, including a list of what the property comprises, what counts as common space, how service fees will be collected and so on. 

Michael Ryall, a director of Place Strata Management, which advises owners' associations, said: "It is now up to Rera. Quite a few developers have lodged documents with Rera, and it's just going through the teething problems of any new system."

In cases where the developer has not handed in the paperwork, the next step may also lie with Rera.

Since the October 13 deadline passed, the owners have had the right to request that Rera impose a 30-day deadline for their developer to prove it is at least trying. But if, after a month, Rera decides otherwise, it can hand over control of the registration to owners and force the developer to pay back the cost, which can run as high as Dh100,000 for lawyers, surveyors and other fees. 

Hardly any owners have taken that step, though, said Adrian Quinn, the head of Essential Community Management, which advises owners associations. Many fear that developers who ignored the registration deadline will also ignore the requirement to pay back their expenses.

"They've got to be realistic," he said. "I tell owners, yes, we can do this, total the cost and charge the developer. But if the developer hasn't done anything on other issues …" 

It is believed that no owners' associations have yet been registered. Rera declined to comment on how registration was progressing.

Many developers, including major players such as Emaar and Nakheel, are still setting up the interim owners' associations recommended by Rera to prepare for the handover. Interim associations can meet and make decisions but have no legal authority as an organisation.  

For years, owners have complained that developers overcharge for maintenance. The emirate's strata law, ratified in April, empowers owners' associations to assume formal control of building costs.

Emaar, with 40 dedicated staff, has set up 39 of the 56 interim owners' associations planned, a spokesperson said. It is meeting owners to discuss the role of the associations and elect board members. It has announced these meetings by posting signs around its communities. 

Some owners of Emaar properties complain that this method limits the participants to owners who live in the properties.

One owner who asked not to be named said: "I live in the Springs, but have a property in the Lakes, so I have a right to be alerted."

He said he had heard through casual conversation that a meeting for Lakes owners would be held later this month. "Such an important meeting should have at least 30 days' notice, by direct e-mail or a formal letter," he said. "They've got lots to register. But how hard is it to send out a standard template letter saying, 'this is the process'?"

One Dubai resident who owns 20 properties from seven developers, including Emaar and Nakheel, said none had registered owners' associations. "They have let the deadline pass," he said.

A Nakheel spokesperson said the developer had 10 employees "working closely with Rera to register approximately 300 owners' associations" and scheduling meetings to elect association boards.

Board members of interim owners' associations, however, complain that Nakheel officials will meet only during office hours, when many owners have to work. 

A group of owners on the Palm Jumeirah Shoreline Apartments, developed by Nakheel, felt so frustrated that they formally requested on Wednesday that Rera begin Nakheel's 30-day grace period to show what progress it had made so far. 

"They do not attend our board meetings," the owner of 20 properties said. "We can only hope now that Rera will step up."

chuang@thenational.ae