Strata law might be implemented soon

Our most recent blogs have been dealing with the sudden influx of property laws for Dubai real estate, for which we are no doubt grateful! Now it seems that the Land Department is also pushing ahead to introduce the Strata or Condominium law within the next few weeks. This law will clarify the ownership of common facilities within freehold developments, as well as providing protection with regards to maintenance charges.

I’m sure many property owners in the UAE, especially Dubai, will have complaints about maintenance charges. The whole point of buying freehold property in Dubai is to avoid paying out a large proportion of your salary in rent. But if you end up paying for a mortgage and maintenance costs that rival extortionate rental rates, what’s the point? A whole lot of controversy was sparked by the Green Community developers, who increased their maintenance charges for residents by 300% and were met with a huge backlash (and rightly so).

With such a great environment for investment within Dubai, it would be a shame for something as trivial as communal upkeep to ward off buyers. Thankfully, the government is continuing with its initiative to encourage investors with serious consideration for the introduction of Strata Law. This law basically governs the division of communal areas within property developments. At the moment, these areas, such as communal gardens, pools, gyms and so on, are still under the control of the project developers, meaning they can charge whatever they want and there’s little that owners can do about it. Under the Strata law, these areas are given equal division amongst the owners on the development, and as such they can decide how these areas will be managed. This could mean a committee that assigns the maintenance costs for the residential area, or they could hire a company of their choice to manage the maintenance of communal areas. It offers freehold property buyers a better deal and more transparency on what their annual maintenance payments are contributing to.

Such laws are commonplace in other parts of the world, and the introduction of the law here would further integrate Dubai real estate into the global property market. It is also said that the law, if implemented here, will be stricter than in other countries. Any residents delaying or refusing to pay the necessary charges would face severe action including their property unit sold as a penalty.

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