Published: Sep 23, 2019

The New Jointly Owned Property Law

Law No. (6) of 2019 Regulating the Joint Ownership of Real Estate in the Emirate of Dubai (“Joint Property Law”) has been gazetted on 19 September 2019.

 

What does the Joint Property Law relate to?

The Joint Property Law governs the development and management of strata buildings and master communities in the Emirate of Dubai.

 

Who is affected by the new Joint Property Law?

The Joint Property Law affects the following stakeholders who should take advice on what steps will need to be taken to bring their operations into compliance:

  • Community Managers
  • Master Developers and Developers
  • Hotel Operators
  • Insurers
  • Contractors
  • Investors

 

What are the key elements of the new Joint Property Law?

  • Law No.(27) of 2007 concerning Jointly Owned Property in the Emirate of Dubai is repealed and replaced by the Joint Property Law.
  • The Directions and any joint property documentation approved by RERA remain valid to the extent not inconsistent with the Joint Property Law.
  • Owners Associations will no longer exist and instead a “Managing Agent” (effectively an approved management company) will be responsible for the management of the Joint Property or Master Community.
  • A Committee of up to 9 resident owners will be appointed by RERA with an advisory function only.
  • The Managing Agent must enter into all contracts for the Joint Property or Master Community and hold the relevant insurance and shall be required to give a bank guarantee for an amount to be determined by DLD.
  • Joint Properties now fall into three categories: (1) mega projects; (2) hotel related projects; and (3) simple joint properties, with different rules pertaining to the management of each type of Joint Property.
  • The status of management of Common facilities of Master Communities has also been clarified.
  • Service Charge and Use Charge collection procedures are clearly set out and include a power of sale in the event of continued defaults in payment.
  • RERA continues to have a supervisory role over Service Charges and Use Charge.
  • RERA now has the power over the appointment and removal of managers or committee members.
  • Fines of up to AED 1,000,000 for first offences and AED 2,000,000 for subsequent offences may be issued.
  • The Rent Disputes Settlement Centre will now have jurisdiction to resolve disputes in relation to Joint Properties.

 

What is the timeframe for compliance?

  • Joint Property Law comes into effect on 18 November 2019.
  • All stakeholders must comply with the Joint Property Law by 18 May 2020.

 

Should you have any queries regarding what is required to ensure compliance with the Joint Property Law, please do not hesitate to contact our real estate team:

Tara Marlow
Partner, Head of
Real Estate, Hotels & Leisure
t.marlow@tamimi.com

Jeremy Scott
Partner,
Real Estate
j.scott@tamimi.com

Mohammed Kawasmi
Partner,
Real Estate
m.kawasmi@tamimi.com

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