By: Garry Murray, CEO of PLACE Strata Management LLC
Law 6 of 2009 marks a substantial change in the operation of condominium properties and the roles and functions of the board of the owners association.
Firstly, the old Law 27 of 2007 was never fully implemented to endow the Council of the Association of Owners with legal status – They (the owners) have been classified as provisional since the entry into force of this law. This has caused some confusion and gray areas of legality and authority over decision-making regarding homeowners associations. This meant that management companies were working according to a guideline but had to manage the expectations of an interim board, landlords, tenants and regulators to do our day-to-day work. This is something we have all adapted to but still required clarity.
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Here are the changes
This is one of the main advantages of the new law. He clarified who is the responsible party and also clarified the authority of the board of directors of the owners association, now called the committee. It is the responsibility of the management company to ensure that the project complies with regulatory and local authorities. I know that within the management community this has sparked discussion because the responsibility lies with the managing agent. My personal opinion is that it is a good thing. This will increase the operating standards in the market more and more because of this added responsibility and will force all of us as an industry to increase our performance.
Some owners may think that not having a board of directors will be an inconvenience, but as more clarity is provided on how new committees are formed and operate. I think that will turn out to be positive, mainly because not all boards currently have the expertise to manage the various legal, financial and technical requirements or to operate the assets they own. Tedious administration is now handled by the managing agent and land department through third parties to allow owners and the committee to focus on what they should be focusing on: the pleasure of living or working on the project.
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Another big takeaway from the law is that the managing agent will be required to present a bank guarantee for the common areas he manages and face fines of up to AED 1,000,000 (around 272 $ 480) for management failure. This will be a drawback for businesses that haven’t invested in staff training, business infrastructure, and compliance development.
These amounts and the process for implementing fines need to be clarified. However, as mentioned above, this should improve the quality of the management of the association. This in turn will oblige the Facility Management (FM) companies to hold onto the assets, as any risk to the management company will be taken into account in the agreements with the FM. The end result is a win / win for the end user and the owner.
This does not mean that the service charges will increase. The introduction of Mollak and third-party auditors means that service fee tariffs are scrutinized like never before, and the management company’s responsibility to comply with them will allow us to work more closely with the regulator to develop the vision. of the government of Dubai.
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Ranking of projects
Overall, the new law is clear on roles and responsibilities but there will still be clarification requirements through the Agency. One of the main things to remember is the classification of projects now:
- Major projects
- Hotel project
- Other real estate projects
Due to the nature of Dubai’s real estate portfolio, I can understand the need to develop these categories as not everyone can handle all types of projects.
Again, this will improve the quality of service delivery as standards improve to allow these projects to be managed by certain managing agents.
As the CEO of a large association management company, I look forward to expanding our systems and operations towards the new law in this exciting development of the Dubai Homeowners Association industry.
Garry Murray is CEO of PLACE Community Managers and joined the company in 2011. His role is to formulate company strategy, support its management teams, liaise with shareholders, generate new business and , above all, and to develop each staff member. from office workers to senior executives in line with the PLACE vision