New law for Ownership of Jointly Owned Properties in Dubai (the Strata Law)

[Waterdale]

As the Land Department and the Real Estate Regulatory Authority (RERA) put the final touches on the implementing regulations to be issued under Law No. (27) of 2007 On Ownership of Jointly Owned Properties in the Emirate of Dubai (the Strata Law),it seems an opportune time to reflect on the key features and advantages that a fully operational strata title regime will bring to the Dubai property market.

The introduction of Law No. (7) of 2006 Concerning Real Property Registration in the Emirate of Dubai (the Registration Law) was the first step in attempting to bridge the gap between the growth in development and the sophistication of the property law system governing such development by introducing a system of ownership registration to bring it in line with other established world markets.

The introduction of the Strata Law is the next step in the growth of the property law system as it incorporates apartment ownership (and the ownership of other jointly owned property) within the registration system.

Attention all owners and owner's associations!

Reply to this thread if you need any help related to this topic!

 

[baheera]

Would you mind sharing those final touches? I guess Strata law is not new by any means unless i have missed some vital changes recently?

 

[Waterdale]

The strata law came into effect on the 1st of April of 2008, however the strata title regime is yet to start operating. The regulations necessary to direct the operation of strata law are still being finalised.

I suppose you have property here in Dubai. If so, have you started an owner's association already?

 

[revolutionary]

The strata law has been in effect since March and owners CAN form an association and take control - some additions to the laws were made as they were initially incomplete. (as to the legal status of the owners association so they could open a bank account - which has been done...)

The developers cannot prevent the association from forming and asserting their rights. In fact, there are buildings in Dubai that are being operated by Associations - (you can contact Asteco that manages strata...) In fact, the official policy of the Dubai govt - ENCOURAGES owners to form their association - inline with the international market!) I think the major hurdle investor / owners are facing is that many buildings are only 50% occupied and many of those with rental tenants as most of the owners are not living in Dubai and thus - hard to contact as you need owner members to effectively operate the Association.

Insofar as your reference to 'rogue' developers mishandling escrow funds - which indeed has happened often... that has nothing to do with the strata laws - they fall under the Escrow laws - best not to confuse the two.

Some owners have been more proactive as it relates to the common charges - like with Emaar in Old Town - with some success. At the end of the day - if you feel you are being raked over the coals in costs and lack of services from your developer - the solution is at hand...

Thanks Financier - I've been trying to ascertain for certain whether the laws were actually effective already. Do you have a date in March? My understanding was that it was up to developers to form the association but that if they failed to do so within 6 months then the owners could. However I've never found a firm date that this became effective and want to be ready when the 6 months expires as I strongly doubt whether my own developer will ever willingly comply with any law.

Agree that Escrow is a separate issue but another example of how the big developers are pushing around RERA to the detriment of the small investors. RERA seemed to have teeth initially but everything seems to have fizzled out and the developers are taking advantage on all fronts claiming that they are struggling when for many of them a simple math calculation will show they couldn't possibly be running short of funds - one case with 80 towers sold, 4/5 built & completed, most not broken ground - tell me where the money has been spent legally?

 

[financier888]

Thanks Financier - I've been trying to ascertain for certain whether the laws were actually effective already. Do you have a date in March? My understanding was that it was up to developers to form the association but that if they failed to do so within 6 months then the owners could. However I've never found a firm date that this became effective and want to be ready when the 6 months expires as I strongly doubt whether my own developer will ever willingly comply with any law.

Agree that Escrow is a separate issue but another example of how the big developers are pushing around RERA to the detriment of the small investors. RERA seemed to have teeth initially but everything seems to have fizzled out and the developers are taking advantage on all fronts claiming that they are struggling when for many of them a simple math calculation will show they couldn't possibly be running short of funds - one case with 80 towers sold, 4/5 built & completed, most not broken ground - tell me where the money has been spent legally?

Hi. Off the top of my head - can't recall the date - you may want to check with RERA or their website.. If you want to form an association in your building - best to contact ASTECO and meet with them - they can assist you and inform you of the guidelines etc - the developer can not stop you.

Insofar as developers skirting the escrow laws, misappropriating funds, yes indeed, this has been endemic and sadly, RERA has done little if anything to truly enforce the laws they created to protect investors. In most countries in the world, violating escrow laws and fiddling with escrow accounts is a criminal offense - in Dubai, from what is reported most of the time - investors are told to take their claims to civil courts. It would seem they are not staffed or have the will to pursue these issues internally, as best as they may try. The end result? Most of the rogue developers will skip and leave investors holding the proverbial - bag of sand - having been 'sand-bagged'

You may want to confer with the 'Escrow Officer' on the escrow issue related thread on this site which is very good and informative.

good luck!

 

[Waterdale]

Strata in the UAE

Thanks for the posts!

If you are looking for Strata consultants, please do have a look at waterdale.ae

They have recently started here in the UAE, and are looking to find owner's associations in need of proper strata consultancy.

Hi. Off the top of my head - can't recall the date - you may want to check with RERA or their website.. If you want to form an association in your building - best to contact ASTECO and meet with them - they can assist you and inform you of the guidelines etc - the developer can not stop you.

Insofar as developers skirting the escrow laws, misappropriating funds, yes indeed, this has been endemic and sadly, RERA has done little if anything to truly enforce the laws they created to protect investors. In most countries in the world, violating escrow laws and fiddling with escrow accounts is a criminal offense - in Dubai, from what is reported most of the time - investors are told to take their claims to civil courts. It would seem they are not staffed or have the will to pursue these issues internally, as best as they may try. The end result? Most of the rogue developers will skip and leave investors holding the proverbial - bag of sand - having been 'sand-bagged'

You may want to confer with the 'Escrow Officer' on the escrow issue related thread on this site which is very good and informative.

good luck!