Frequently Asked Questions

The term used in Dubai for “Strata” is “Jointly Owned Property” and relates to ownership of property where the property has been divided into units for private ownership and common areas (owned in common by all unit owners in the development) and where the responsibility for day to day management remains with an Owners Association. All unit owners in a property become members of the Association on registration of the unit title with the property registry at the Lands Department. Membership of the owners Association and ownership of the unit are inseparable. Jointly Owned Property is therefore a form of strata ownership. Strata meaning the subdivision of property into Units and common areas by horizontal and vertical sub division.

It is essential for all individuals and business involved with the ownership of jointly owned real estate, buying and selling units in a jointly owned apartment building or villa’s in a master community with community facilities, supplying goods and services to Owners Associations and developing communities which are jointly owned, to have a knowledge of the laws. The rights and obligations of all parties will be affected by the laws and in most cases non compliance may allow the contractual arrangements to be voidable or broken.

The recently released directions issued by the Dubai Lands Department attaching to the jointly owned property law enable the implementation of strata ownership in that the directions set out the framework within which the transfer of rights from the developer to the Home owners eventuates. The directions (also know as regulations) establish a regime for disclosure, formation of Owners Associations and how they are managed, financial obligations of owners, developers and the Owners Association

The Owners rights as a member of the Association and obligations to other owners.
The Owners financial obligations including the unit entitlement methodology attaching to the unit which establishes the owners voting rights and service charge apportionment.
The rights, obligations and functions of the Owners Association including the procedures relating to meetings, lodging items for inclusion on an agenda, passing of budgets, appointing board members, appointing suppliers of services, community rules amendments, and the role of the Association Manager.
Responsibility of the developer for disclosure and the process available under law to enforce obligations.
Restrictions imposed by the constitution on use of the unit and common areas

An Owners Association comprises the unit owners of the Jointly Owned Property and is legally formed upon the registration of the first sale of a unit in the register. Membership of the Association commences on the registration of the unit and shall lapse upon the expiry of an owner’s registration as the owner of the unit.

The Owners Association comes into existence upon lodgment and approval of an application with the supporting plans and declaration and also upon the registration of the first sale in the register.

The by laws or community rules means the rules set out in the Jointly Owned Property Declaration which sets out the management and administration of the common property. Penalties of up to AED2, 000 can be enforced for non compliance.

The owners elect the board members at the annual general assembly.

There is a code of conduct for Board Members and includes issues such as conflict of interest and acting in the best interests of the owners. The Code of conduct is detailed under Schedule 1 of the Direction for Association Constitution.

The functions of the Owners Association are –

to supervise, manage and control the Common Areas and Assets for the collective benefit of Owners and in ways that promote positive environmental outcomes;
to ensure that the building or community, including the Common Areas, are maintained in good conditions;
to integrate waste management, energy and water efficiency policies into the Association's strategy regarding the Common Areas and Assets;
to properly repair, maintain, renew and replace the Common Areas and Assets;
to evenly and fairly enforce the Jointly Owned Property Declaration, including Community Rules, and any Building Management Statement in respect of the Jointly Owned Property;
to promote harmony and a sense of belonging among Owners and Occupiers of Units;
to obtain and maintain any license it requires by law;
to maintain records and produce statements and other documents as required by this Constitution or the Department;
to otherwise comply with all laws, decrees, regulations, by-laws, policies and directions by which it is bound.

The Association Manager is responsible for:

Prepare a Management Plan Each Year
Regularly Review Contractual Arrangements and Apply the Test as it relates to a Real Conflict of Interest.
Advise the Board on a Funding Plan for Recurring Costs and Capital Replacements.
Watch for the Warning Signs as it relates to the Financial Health of the Owners Association.
Risk Management
In collaboration with Board Members Establish the five (5) Basic Maintenance Programs and Implement Controls for Ensuring the Work is done.

An owner’s lack of interest may see the property deteriorate and standards fall if a general feeling of complacency prevails and other owners fail to manage the Owners Association in an appropriate manner. You may see the level of Service Charges become tailored to short term investor thinking and after years of financial mismanagement the reserve fund would also become depleted by poor planning, resulting in lower values when the owners looks to sell.

The insurance covers full reinstatement value of the building including demolition, removal of debris, building, cost escalation and planning costs but excludes contents of the private apartment. The cover also should include Public Liability Insurance and Office Bearers Insurance. The premium is covered in the service charges paid by owners.

The Owners Association may apply penalty of 12% per annum on outstanding amounts and also recover all collection costs. The Owners Association may also lodge a lien over the title once sufficient time passes whereby the owner has not paid the outstanding service charges. The defaulting owner has three (3) months to lodge an objection. If this does not occur the Owners Association has the right to apply for an Order through the Dubai Courts for the sale of the unit.