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Sheikh Mohammed Bin Rashid Al Maktoum.

PHOTO BY ARCHIVE


Sheikh Mohammed issues new joint ownership real estate law

 

DUBAI – A new real estate law in Dubai has been passed, allowing joint ownership of properties and major real estate projects in the emirate.

Sheikh Mohammed Bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, issued the law, which was announced on Tuesday (September 24).

The new law applies to all major real estate development projects and jointly owned properties in Dubai, including those located in free zones and special development zones.

The law “forms part a regulatory framework designed to boost competitiveness and enhance investment in the real estate sector and ensure the rights of all parties are protected”.

Here are the key details:

– Land Department to prepare a register for jointly owned real estate properties, with details about the owners, share of maintenance costs to be paid, facility management company responsible for managing common areas, amenities, developers and oeprators

– Land Department is responsible for issuing ownership certificates and documents related to individual units in jointly owned real estate properties

– Developer must submit all necessary documents of the jointly owned real estate project to the Land Department within 60 days of the completion date and receipt of completion certificate. The Department can extend the deadline for this by 30 days. If the documents are not submitted, the Department can request the documents from any other party. In this case, the Department will charge the developer all related fees and expenses.

– Developer must allocate parking space for owners of the unit, which cannot be sold separately.

– For mega projects, the developer is responsible for managing, operating and maintaining common areas and facilities.

– For hotel projects, the developer must appoint a company to manage common areas

– For real estate projects other than mega projects and hotel projects, a specialised facility management company manages the common areas.

– Real estate developer is obliged to put in place a building management system for mega projects and hotel projects managed by them. The system should be approved by RERA before any legal transactions are made for these projects.

– The developer cannot be part of an owners” committee unless there are unsold units.

– Owners committee is tasked with ensuring the proper management of common areas, and reviewing annual budgets.

– Property owner is required to pay the management his share of the cost of maintenance of the jointly owned real estate property.

– The facility management company cannot charge fees for operating or maintaining common facilities unless it receives an approval from RERA.

– RERA is in charge of regulating and inspecting the management and maintenance of jointly owned real estate properties and common areas.

– The facility management firm should submit reports every six months to RERA on the management of the jointly owned real estate property and common areas. At any time, RERA can request information on the revenues and expenses related to service charges.

– RERA CEO can appoint another facility management company in case the developer or the management company fails to ensure proper maintenance of the common areas.

– The developer is responsible for any damage to the structure of the jointly owned real estate property occurring within a period of 10 years, starting from the date of issuance of the completion certificate.

– The developer is responsible for replacing and repairing any faulty items in the individual units within a period of one year from the date of delivering the unit to the owner. In case the owner refuses to take possession of the finished unit for any reason, this period will be calculated from the date of issuance of the completion certificate.

– The facility management company is tasked with obtaining insurance coverage for the jointly owned real estate project.

– The Rental Disputes Centre in Dubai is tasked with reviewing all disputes that fall under the purview of this law. Violators are subject to financial penalties up to Dh1 million. Penalties will be doubled in case of repeat violations within a year up to Dh2 million.

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