The regulatory framework within which property is developed, sold and operated in Dubai has developed further following the implementation of regulations and guidelines relating to jointly owned property. Likely to be referred to collectively as the Strata Regulations, the new rules implement and expand upon the relevant provisions of the UAE Civil Code (UAE Federal Law No 5 of 1985) and the Dubai Law Concerning Ownership of Jointly Owned Properties (Dubai Law No 27 of 2007), and seek to balance the rights of all participants (owners, co-owners’ associations, and the board and management of those associations) in relation to the management and operation of communities and multi-owned buildings in Dubai. The new ownership structure is underpinned by a survey and measurement regime.
The four enabling regulations which form the basis of the Strata Regulations comprise the General Regulation, Jointly Owned Property Declaration Regulation (which governs the operation of large communities, typically referred to as Master Communities, which comprise a number of jointly owned properties), Constitution Regulation (which governs rights of owners at the building level), and the Survey Regulation (which ensures that the physical parameters of ownership are clearly defined and that the calculation of service fees is based upon an objective standard).
The regulations set out in detail the information which must be included in mandatory documents such as the Master Community Declaration and the Constitution of the Co-owners’ Association, together with the rules and internal procedures for appointing board members, approving budgets, passing resolutions and the role of managers.
The intention of the Strata Regulations is to clarify rights and responsibilities of each participant so that physical boundaries and ownership responsibilities are clear. In addition, the regulations restrict the ability of developers to impose their own rules and conditions. For example, there are particular provisions to restrict developers from entering into supply agreements on behalf of Co-owners’ Associations. The regulations also include details of the measures that can be taken by the Real Estate Regulatory Agency (RERA), as regulator, where compliance has not been achieved.
It is likely that the impact of the Strata Regulations will take time to be absorbed. It has recently been reported in the local media that strata titling may have fallen out of favour in Dubai, and for this reason the introduction of the regulations may be very timely. The introduction of the regulations also appears to be a positive step towards encouraging and facilitating investment in the Emirate. Implementation, compliance and enforcement in a consistent and transparent manner will ensure that all participants are aware of their rights and obligations, and enable them to make their business decisions accordingly.