UPDATE ON OWNERSHIP OF COMMON PROPERTY LAW IN DUBAI

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As apparent from Dubai infrastructure, innumerable properties are developed to accommodate multiple proprietors within the same building owing personally occupied unit and a common area owned jointly.

As apparent from Dubai infrastructure, innumerable properties are developed to accommodate multiple proprietors within the same building owing personally occupied unit and a common area owned jointly. Yet, issues between the owners of commonly occupied areas are bound to happen, thus, to ensure congruity, UAE has issued Dubai Law number 6 of 2019 regarding ownership of common property in the Emirate of Dubai (the Law). Ergo, Property Lawyers in Dubai will shed some light on the new regulations to spread awareness among joint property owners.

It is evident that the Law is only applicable in the Emirate of Dubai. The Law obliges the Land Department to prepare a special register for joint properties which shall include the following details:

a. Details of land owned by developers on which the common real estate unit will be built;
b. Units allocated to independent owners, their names and other details;
c. Details of owner’s association;
d. Details of building management company;
e. Project plan;
f. The management authority;
g. Details of the management authority for common property;
h. Area of jointly owned property;
i. Total area of the property.

Importantly, the department will issue a certificate or any other document mentioning such details and people are authorized to seek information from such register as when required. Article 7 of the Law defines the components of common property which includes structural parts of the common property, mainstay, structural walls, ceilings, roof joints, staircases, facades and roofs, corridors, parking corridors, entrances, emergency exits, swimming pools, garden, storage facilities, recreational facilities, equipment, security guard, air conditioning system, waste collection, treatment facilities, lifts, concrete, pipes, generators, chimneys, fans and ventilation ducts or unless otherwise indicated in the site plan.

The law significantly allows the developer, under Article 8 to determine the area especially owned by him for his personal use or investment purposes in the site plan post seeking approval from the department such approval will be granted only in the manner that the developer-owned area is not inconsistent with the basic property law and the owner’s right. Additionally, the Law allows for division of jointly owned property only after seeking an approval from the Land Department. Importantly, the Law affirms that the parking spaces are attached to the units and neither the unit nor the parking space can be sold independently. Additionally the owners have the right to purchase additional parking spaces if available in the building.

Right of Priority

Another significant provision of the new Law confirms the owner’s right in priority to purchase any other owner’s share in the same unit if he wishes to sell to another person except from the common joint owners. However, this right will be forfeited if the property is sold to near relatives or family members in the second degree.

Furthermore, the owner in the building having the highest share in the property would have the first opportunity to exercise the right of priority and if he wishes to forfeit his right the next in line would get the opportunity. In any event, if the owner of the property wishes to sell it to the third person, he shall issue a notice through notary public to all the other owners detailing the terms and conditions for selling the property and details of the buyer and shall wait for 30 days for any response and should the other owners fails to revert, he attains the full right to sell the property to a third party buyer. However, if any owner wishes to exercise his right, he must submit his acceptance within this 30 days through a notice via public notary and shall purchase the property within 10 days from the date of his acceptance. In addition, if the owner of the unit sells the property to the third person at a better price or condition compared to what is written in the notice, the neighboring owners have the right to seek compensation.
Services and usage

Pursuant to Article 25 of the Law, the owner of the unit shall pay service and utilization fees depending upon his shares in the property. Whereas, the developer is obliged to pay for the vacant units. Also, the developer can offer the investor to pay his service as they may deem fit. The Law also obliges the developer to establish a bank account in name of the property or the project for payment of service fee by the owners and the owners are bound to submit service fee on the said account. It is pertinent that the developer is obliged to manage the property, unless a specific company is appointed for such management. On off chance, if the owner fails to pay the service fee, the management company or the developer shall notify the owner to pay within 30 days and should he fail to submit fees, the developer holds the right to open a case before land department.
Furthermore, the owner is authorized to allow the developer to offer the unit on rent or to hotel apartment companies only post approval of land department however, land department can only approve this after taking an expert or auditor’s opinion.

Importantly, if the owner has failed to make any residual payments towards the unit, the developer cannot restrict him to enter the premises and the developer is only authorized to register the complaint before the land department to resolve any such issue.

The owners are restricted to make alterations or changes in the unit from outside, unless he obtains a prior approval from the land department or the developer and he must bear the cost for such alterations.

Resolution of Disputes and Penalties

In accordance with Article 42, either party may register a complaint or a case before Land Department. The fees payable for registration of the case is dependent on the type of the case.

The law imposes strict penalties on parties disobeying the law as mentioned under Article 44. Either party may have to submit AED 1 Million if he or she fails to adhere with the provisions of this law and for any repeated offense, he must pay the double of the initial fine.

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