Real estate in Dubai attracts investors and buyers from all over the world offering them lucrative opportunities. Therefore, the government of the Emirate has established some real estate regulations in Dubai to maintain property transactions and keep the process systematic.
However, recently the publication of H.H. Sheikh Mohammed’s letter put forth numerous new real estate laws to standardise transactions between stakeholders, developers, and investors in the UAE real estate market. One of the new regulations pertains to the jointly owned property law in Dubai, which we will discuss here in detail.
What is The Jointly Owned Property Law in Dubai?
According to the statement issued by Dubai’s ruler, the jointly owned property law in Dubai will enhance investment and boost competitiveness in the real estate industry. This will be done by centralising control of the owners’ responsibilities with DLD and RERA.
Law No. (6) of 2019; the new jointly owned property law in Dubai, amends Law No. (27) of 2007. All parties, located in free zones and specialised development zones, engaged with jointly-owned properties in Dubai will be governed by the law. The jointly owned property law in Dubai also specifies the responsibilities of the involved parties with the vision to bring them together and foster transparency in the administration of these properties.
Let’s have a look at how the jointly owned property law categorises property and defines stakeholders’ responsibilities.
Who is Affected by the Jointly Owned Property Law in Dubai?
The following stakeholders are impacted by the Dubai Jointly Owned Property Law, and they must get instruction on the necessary actions to put their systems into compliance.
- RERA (Real Estate Regulatory Agency)
- Property management companies
- Rental Dispute Settlement Centre
- Developers
- Legal Auditors
- Insurers
- Investors
- Hotel Operators
- Contractors
What are the three main property categories defined in the Law?
To manage common areas, jointly owned properties have been divided into three groups under the law. It also defines the developer’s role in managing common areas. These three categories are detailed below.
First Category: Mega-projects or Master Communities
The developer will be responsible for handling, maintaining and operating the common facilities.
Second Category: Hotel Projects
The developer will employ a property management company to maintain the common areas.
Third Category: Other Real Estate Projects
A specialised property management company will manage the common areas.
You can find here some reliable property management companies in Dubai for the upkeep of your property.
What are the responsibilities of the stakeholders?
The jointly owned property law in Dubai defines the responsibilities of each of the stakeholders involved in the property. The responsibilities are detailed below.
Responsibilities of DLD
The responsibilities of DLD as per the Dubai jointly owned property law have been discussed below.
- For jointly owned properties, DLD will create a register which will include the following information:
- Details of management entities,
- Plans and building management regulations,
- Details about contracts for management of jointly owned properties,
- Details of developer-owned areas,
- Statement of the total area of common parts and its ratio to the total area of units in jointly owned properties,
- Details of the members of the owners’ committee,
- Details of the land plots owned by developers,
- Details of units specified for individual ownership in the jointly owned property.
- Any interested party will have the right to access this register’s information after requesting it from DLD. That said if you are an expat make sure you understand these rules for property ownership for foreigners in the UAE before picking one.
Responsibilities of RERA
The responsibilities of RERA as per the jointly owned property law have been discussed below.
- RERA will approve the Building Management Regulations of major projects and hotel projects once issued by the developer.
- RERA will issue the Building Management Regulations of jointly owned property for projects other than major and hotel projects.
- RERA will approve the Master Community Declaration. Any amendments to this declaration will not be made before obtaining approval from RERA.
- RERA will approve the fees for running or maintaining common facilities, which can be collected by the facility management company.
- The management and upkeep of jointly owned properties and shared areas would be subject to RERA’s oversight and regulation.
- Every six months, the facility management company must provide RERA with reports on how the jointly owned real estate property and common areas are being managed.
- In case the facility management company fails to ensure property maintenance of any said area, RERA can appoint another company.
- RERA will solve any rental disputes through the Rental Dispute Settlement Centre (RDC) in Dubai. RDC is responsible for dealing with all types of rental disputes. Check out this guide on filing a rental dispute in Dubai to learn about the documents and fees associated with filing one.
Responsibilities of the Developer
The responsibilities of the developer as per the joint ownership of Dubai property law have been discussed below.
- For mega-projects and hotel projects that they manage, the developer will be in charge of selecting and utilising a building management system that RERA has approved.
- For ten years beginning on the date the completion certificate was issued, developers will be held accountable for any harm to the building’s structure on the jointly owned property. For a year following the date the unit was delivered to the owner, they will also take on the replacement and repair of any broken parts inside the individual units. Being a buyer, make sure you understand the difference between freehold and leasehold properties to be fully aware of the ownership rights.
- Within 60 days of the project’s completion and receipt of the completion certificate, developers are required to submit all required documentation for the jointly owned property to DLD. The due date may be extended for 30 days. If the developers don’t comply, DLD will ask any third party for the documents and will charge the developer for any associated costs.
Responsibilities of the Owners’ Committee
The responsibilities of the owners’ committee as per the jointly owned property law in Dubai have been discussed below.
- There will now be no more than nine members of the owners’ committees, formerly known as the owners association. These members will be chosen by RERA.
- When 10% of the joint real estate units are registered, the owners’ committee will be formed.
- Developers will be eligible to join the committee only if there will be unsold units available.
- The committee will be in charge of ensuring that common areas are managed properly and scrutinising annual budgets.
Responsibilities of the Facilities Management Company
The responsibilities of the facilities management company as per the Dubai jointly owned property law have been discussed below.
- The facility management company must secure insurance coverage for the jointly owned property.
- The company will manage the common areas, the third category defined by law, of the jointly owned property.
FAQs
Can you co-own a property in Dubai?
Yes, you can buy a shared property in Dubai. When buying a jointly owned property, the percentage share each owner will have in the property will appear on the title deed that DLD will issue when the transfer completes.
That is all about the jointly owned property law in Dubai that governs the roles and protects the rights of stakeholders involved in the project. RERA has yet to disclose many of the legal details relevant to this law, but the revised law is itself a significant first step to increasing investor confidence and interest in the UAE real estate market. That said, it is of utmost importance to familiarise yourself with the laws and regulations of the Dubai real estate market if you plan to sell, rent or buy an apartment in Dubai.
For information about property laws, stay tuned to the UAE’s popular property blog.
