RERA reveals boost for new ownership model as Emaar leads the way for developers with 39 boards in place

Owners associations which will set service charges and manage the common areas of jointly-owned properties, are set to become a standard feature of Dubai’s real estate sector with developers such as Emaar Properties leading the way in implementing the law, the Real Estate Regulatory Agency (RERA) revealed today.

The Land Department’s sector regulator said the global property developer had been involved in the formation of 39 interim boards of owners associations for Emaar communities across Dubai. Sultan bin Butti bin Mejren, Director General of the Land Department, said: “The major developers have a key role to play in making this new type of ownership and management the standard model for jointly-owned properties.

“The Government has responded positively to owners requests to have control of core responsibilities in managing jointly owned properties and introduced new law and practice guidelines. The interim boards which have been formed represent significant progress towards the goal of establishing the owners-association model across all types of jointly-owned freehold property.

“As the market has matured so have Dubai real estate’s institutions and processes. This ownership and management model establishes Dubai as one of the standard bearers for best practice and gives owners in Dubai the responsibility and power to jointly manage their affairs in a structured manner.”

The process of setting up and registering owners associations was formally introduced earlier this year when Law No.27 of 2007 Concerning Ownership of Jointly Owned Properties was enacted and the Direction for Owners Associations released. The directive requires all owners associations to have a board made up of unpaid elected owners registered and approved by RERA and responsible for the conduct of their association.

Emaar has taken the initiative in beginning the process of establishing this tier of management as the norm across its communities and handing over responsibility to the interim boards, which have been established ahead of full registration of the owners associations. RERA has encouraged the formation of interim boards as a halfway house to full registration of the associations – an extensive process involving a survey and taking several months to complete.

Marwan bin Ghulaita, Chief Executive Officer of RERA, said: “We were keen to see developers take the initiative and begin the process of handing over responsibility for managing communities to owners. The fact that one of Dubai’s leading developers has fully embraced the Directive implementing the law and proceeded to set up 39 interim boards has helped to move the process along.

“The interim boards will be followed by the general assemblies and genuine opportunities for all owners to be involved in managing their own communities, which must be the right way to go. The roll-out of this process will see Dubai again lead the region in establishing formally constituted owner-managed communities which will inevitably produce showcase communities owners are proud to call their own.”

Emaar Properties is one of the largest developers in Dubai and has four lifestyle master-communities – Downtown Dubai, Emirates Living, Dubai Marina and Arabian Ranches – with many thousands of residential units. The company has campaigned to raise awareness of the provisions of the new law among owners and encourage them to set up interim boards. Mr. Ahmad Al Matrooshi, Managing Director of Emaar Properties, said: “As the pioneer of master-planned communities in Dubai, our company has been at the forefront in driving modern community management practices.

“The first step has been taken in setting up the 39 interim boards, and we will continue to hold general assemblies to encourage more boards to be set up, which will allow even more homeowners to be involved in the management of their communities. These boards and associations will help maintain the long-term value of their investments and ensure transparency in community management.”

Emaar Properties is encouraging owners in its other communities to set up Interim Owners Associations. It anticipates having more than 56 such associations across its master-planned communities in Dubai, and has received RERA licensing for its Emaar Community Management division to offer management services to the owners associations.

Mohammed Bin Hammad, Senior Director of RERA’s Real Estate Relations Regulatory Department which has responsibility for the owners associations, said: “We are seeing the first steps being taken which will lead to owners associations headed by properly constituted boards taking full responsibility for the management of their buildings. It is important as many owners are involved and participate fully in the decision making.

“Once the developer has called the general assembly and encouraged the association to elect the board then the responsibility lies with the owners and they have to make the process work. This means they should be involved in setting service charges but also take responsibility for seeing these are paid.”

Mr Bin Hammad added: “We are confident this will happen. The interim boards being actively encouraged by Dubai’s major developers have demonstrated there is a will and desire among owners and developers to fully comply with and ensure this new structure works. It is in everyone’s interest to take it on board and there is clear evidence this is something which has general support across all sections of the market.

“RERA will be proactive and will support the activities of those setting up the associations and boards. The interim boards are a first stage and we will cooperate with developers, owners and management companies to ensure the progress we have seen is maintained and the transparency we are looking for becomes a matter of fact.

“Developers have been given a deadline to comply with the new rules and practices and Emaar, a major developer, has set the pace.”