There have been numerous publications, in the press, in relation to jointly-owned-property schemes in Dubai. However, not much has been published with respect to strata schemes in the financial free zone called the Dubai International Financial Centre (DIFC), due to the fact that there are currently limited strata title developments within this zone. This bulletin is intended to provide a brief overview of the strata law regime within the DIFC.
What is the DIFC legislation covering strata schemes?
The Strata Title Law (DIFC Law No. 5 of 2007) and the DIFC Strata Title Regulations form the body of legislation that covers strata title development within the boundaries of the DIFC (the Strata Law). The Strata Law provides for the creation, administration and management of strata title developments within the boundaries of the DIFC.
For clarity, the Strata Law does not apply to a property outside of the boundaries of the DIFC. Equally, the laws governing jointly-owned-property schemes in Dubai do not apply to a property inside the boundaries of the DIFC.
What is a strata title development?
Pursuant to the Strata Law, a strata title development can be created when a property is divided both horizontally and vertically. However, vertical division into more than one stratum is not a necessary feature of a strata title development.
An example of a basic strata title development divided on:
- a horizontal basis would be a cluster of villas in a gated community sharing common properties (such as a swimming pool and a gym) and the villas are intended to be owned by different owners. Each villa owner will have an undivided interest in the common properties;
- a vertical basis would be a multi-level building consisting of residential units again sharing common properties (such as a swimming pool, a gym and lifts) and the residential units are intended to be owned by different owners. Again, each residential unit owner will have an undivided interest in the common properties.
How does one create a strata title development?
Pursuant to the Strata Law, to create a strata title development, a strata plan will need to be prepared. The Strata Law sets out the various requirements for putting a strata plan together.
A draft strata plan is generally prepared, in the first instance, by a developer who wishes to create a strata title development. The draft strata plan will then be provided to prospective purchasers who wish to purchase a villa or a unit in the strata title development.
Once the construction of the strata title development is completed, the strata plan will be checked against the constructed development and finalised by the developer. Thereafter, it will be submitted to the DIFC Registrar of Real Property (the Registrar) for registration.
A strata plan has no legal effect unless and until it is registered. Therefore, the creation of a strata title development will not be legally effective until the strata plan is registered by the Registrar.