Residents have raised doubts about the new law brought in to prevent developers from imposing huge hikes in maintenance fees.
Instead of developers being able to set yearly increases in maintenance fees, any increase will now need to be approved first by the Real Estate Regulatory Authority (Rera), according to a regulation issued on Sunday.
However for many, maintenance fees are required to be paid at the beginning of January every year.
It is not clear whether increases announced for this year will be forced back to last year’s rate, or whether the ruling is applicable from now on.
“On the whole, this ruling is tremendous. However, there are several question marks remaining,” said Hamid Hamri, chairman of the Owners Association in Jumeirah Beach Resort (JBR). The area has seen maintenance fee increases of 129 per cent.
“It is not clear whether this year’s increase will be put down to the previous amount,” he said. According to strata law enacted by Rera, service charge increases should be scrutinised and approved by the respective owners’ associations before being enforced.
However, few developers have registered owners associations despite a requirement from Rera that they do so.
The regulation means that service charge increases will be now be calculated by Rera based on a formula that “will seek to strike a balance between the expenditure shouldered by the developers and the quality of services received by the owners”, according to state news agency Wam.
“The service charges are no longer subject to the developers’ calculations and their desire to turn them into a profit-making tool,” Marwan Bin Ghalita, Director-General of Rera, was quoted as having said…SOURCE
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Yet another reason why Dubai’s property market is dead. You never stop paying for your freehold that never gets you a visa and that you never truly own.
Residents are calling for greater transparency over how money is spent on the maintenance and upkeep of apartments.
Laws regulated by Dubai’s Real Estate Regulatory Authority (RERA) say that homeowners should be able to monitor how service charges and maintenance are being spent by participating in owners’ associations.
However, despite the ‘Strata Law’ being in place for almost a year, few associations exist in the emirate. Instead, home owners in areas such as Discovery Gardens,
The Palm Jumeirah and Jumeirah Beach Residence (JBR) have taken to organising unofficial committees to battle recent hikes in maintenance costs.
In JBR, maintenance fee hikes of as much as 129 per cent have hit owners. An apartment owner, Cecilia Reinaldo, is behind the efforts to organise a committee to fight the increases.
“When we moved in we were shown a brochure which promised five beach clubs and a beach park but it’s been a year and we haven’t seen them,” she said. “I don’t know where this money is going.”
She added that the contract said that as soon as the first building was registered with Dubai Land Department, an owners’ association should be set up to look at how the maintenance fees were being spent. However none has been formed.
“Some of the people I spoke to said they wished they’d have rented, instead of buying the property,” she said. “If they go up across the board then demand for properties will fall further.”
A spokesman for Dubai Properties was unavailable for comment. However, RERA CEO Marwan bin Ghalita confirmed to Khaleej Times that Dubai Properties had already sought out RERA for talks about setting up an owners’ association. Acting on behalf of Dubai Properties, Salwan Property Management sent out a notice to residents informing them that maintenance fees would rise from Dh9.5 per square foot to Dh21.75 per square foot…SOURCE
Sphere: Related Content Posted 1 year, 8 months ago at 10:24 am. View Comments
