Jointly Owned Property in Dubai: Rules and Laws 2024

Dubai has a thriving real estate sector and immense value for jointly owned property. Driven by the city’s dynamic investment structures and modern approach to shared living, the Government of Dubai has made vital transformations to align the joint ownership hoists with efficient management, regulation, and transparency.

These updates are pivotal to guaranteeing a harmonious living ecosystem where communal responsibilities are upheld and individuals’ rights are respected. With the continuous rise in gated communities, residential complexes, and mixed-use developments, ownership extends beyond individual units, allowing the flexibility to share living spaces. This blog post will provide an in-depth analysis of what constitutes jointly owned property in Dubai, how these regulations impact property investors, and the latest updates for 2024.

What is Jointly Owned Property in Dubai?

Real estate developments that allow a split of land or property between multiple properties are referred to as Jointly Owned Properties. These properties may range from sprawling villas to high-rise apartments, fostering a shared ownership approach. Properties owned by multiple owners will also experience a breakdown in property values, which is often considerable between business partners, spouses, or friends.

Essential Rules Governing Jointly Owned Property

A set of rules and regulations is defined to uphold the legal landscape of jointly owned property in Dubai. These regulations ensure transparent operation, effective management, and equitable treatment of owners.

1. Law No.6 of 2019 – The Cornerstone of Jointly Owned Property Law

An amendment modifying Law No.27 of 2007 has shaped Law No.6 of 2019 titled “Concerning Ownership of Jointly Owned Real Estate Property in Emirate of Dubai.” The law serves as the foundation for regulating and managing jointly owned properties, shifting much of the Real Estate Regulatory Authority (RERA) and Dubai Land Department (DLD) oversight.

With the introduction of Law No.6 of 2019, the roles and responsibilities of the Owners’ Association have also taken a new paradigm, creating equilibrium in the structure. Additionally, the law aims to gather facilities management firms, owners, and developers to manage jointly owned properties for enhanced accountability and transparency.

2. The Role of the Real Estate Regulatory Authority in 2024

RERA’s role in overseeing jointly owned properties is multifaceted, including budget approvals, registration of owners’ associations, and resolving disputes. RERA’s active role in 2024 also includes stakeholders' compliance with property regulations.

• Mandates Regular Audits of Facility Management Companies
  RERA is responsible for the regulation and management of jointly owned properties. RERA mandates auditory sessions as a supreme authority, requiring reports on managing Jointly Owned Properties in Dubai. Facility management companies are accountable for reports’ submission after half a year. In addition to management reports, RERA has the authority to inquire about revenues and costs related to service charges.

• Fee Approval
  RERA is also responsible for approving service charges’ annual budget and fees for the maintenance and management of common areas. Once approved, these fees can be charged by the Owners’ Association or Facility Management Company, while RERA ensures transparency.

• Replacement of Facility Management Company
  RERA has the authority to intercede when a Facility Management Firm fails to maintain or manage common areas and replace them with another Firm.

3. Owners’ Committee – Composition and Responsibilities

Formerly known as the Owners’ Association, it is now retitled as the Owners’ Committee. Their role marks the successful uplift in jointly owned properties as they set forth property owners’ collection interests.

• Legal Formation of Owners’ Committee
  Owners’ Committee is formed once a certain percentage of units, approximately 10%, sell out in a particular development. RERA requires a legal registration of these properties, ensuring all operational and governmental standards are met. Each of the nine members of the Owners’ Committee performs operations delineated under the law. Additionally, developers cannot become members of the Owners’ Committee if all the units have been sold out.

• Powers and Responsibilities of Owners’ Committee
  The owners’ Committee is primarily responsible for managing common areas and developing and enforcing the community rules. The Committee prepares annual budgets, contracts with service providers, and collects service charges. It is also responsible for overseeing any needed upgrades or repairs.

• Transparency and Accountability
  RERA mandates that the Owners' Committee maintain a comprehensive record of financial operations to ensure accountability and avoid misuse of funds. In addition to half-yearly reports, the Committee is responsible for preparing a detailed review report containing information regarding service charge collection and expenditure to help foster communal relations and robust trust among owners.

4. Roles and Responsibilities of Developers

• Submission of Documents
  Developers are responsible for submitting necessary documentation related to jointly owned properties in the development. In case of submission failure, the Dubai Land Department (DLD) will charge the developers a fine for the delayed submission or retrieval of documents from a third party.

• Responsibility for Damage and Repairs
  Developers are held accountable for any structural damage to the jointly owned properties for the first ten years after the completion certificate is granted. If any fault is found in the individual units within one year of possession, the developers will rectify the defects.

• Appointing a Building Management System
  The developers are also responsible for appointing a building management system; however, RERA will grant the approval. This is a specific requisite for hotels and other mega-projects.

5. Three Classifications Under Updated Law for Jointly Owned Properties

The law concerning joint ownership of properties in Dubai has classified three categories;

• The Master Projects
  It includes large-scale developments jointly owned by multiple owners that comply with the stipulated criteria ratified by the Director General.

• Units
  Jointly owned real estate can include properties such as offices, shops, apartments, warehouses, land plots, floors, or independent townhouses.

• Hotel Projects
  The properties licensed by the Competent Authority for use as hotel units are eligible for joint property ownership. These may include hotel rooms, hotel flats, villas, and resorts.

6. The Layout of Ownership – Common Areas and Private Units

The dual nature of jointly owned property is the standout feature that splits ownership between common areas and private units. Many aspects of property management, from maintenance to conflict resolution, come under effect.

• Defining Common Areas
  Also called shared spaces, common areas are often owned collectively by the owners. They usually include various amenities like fitness centers, swimming pools, grand lobbies, and expansive gardens. These areas require proper maintenance and equitable usage to sustain the property’s value and ensure residents a standard lifestyle.

• The Concept of Private Units
  Private units are independently owned within a jointly owned real estate. This usually includes commercial offices, villas, and apartments, guaranteeing owners full rights over proprietorship to make a sale, lease, or modification possible. However, interior renovation is subject to compliance with community regulations.

• Rights and Responsibilities of Owners
  While owners have autonomy over private units, they also uphold the responsibility to maintain common areas through service charges. If owners fail to pay service charges, they will be penalized, ensuring the upkeep of amenities and shared spaces.

7. Financial Management and Service Charges

Service charges are crucial to possessing property in a jointly owned real estate.

• Service Charges Determination
  Service charges are determined based on the yearly budget prepared by the Owners’ Committee and approved by REA. These funds cover maintenance, utilities for common spaces, security, and property cleaning. Authorities pay detailed attention to planning this annual budget or determining service charges to ensure the collected fee aligns with the development’s demands without being inflated.

• Rules for Transparency and Fairness
  RERA provides a detailed breakdown of service charges to keep the charges transparent and fair and to keep owners aware of where and how their funds have been used. Owners can prevent inflated charges or arbitrarily know the actual expense incurred based on their lifestyle.

• Penalties on Non-Payment
  Owners who fail to pay service charges will face penalties, while consistent non-payment could result in asset liens or court-ordered property freezes until all dues are settled.

8. Legal Consequences of Non-Compliance

• Implications for Management Authorities and Owners
  Various penalties can be imposed in case of non-compliance with the laws concerning jointly owned property in Dubai. Failure to abide by Facility Management Company or Owners’ Committee rules or payment of service charges could result in restrictions on the use of shared facilities. Likewise, Property Management Companies could face penalties or license suspension if violations regarding supervision are observed.

• Rights of Owners in the Events of Poor Management
  Adequate laws are promulgated to reserve owners’ rights in case the owners' Committee lapses in fulfilling its roles and obligations. A direct complaint can be filed with RERA, leading to corrective measures after an investigative process. This offers owners an accessible way to claim resolution.

• Conflict Resolution Approaches
  RERA offers the role of arbitrator and intervenes in case of any dispute between the owners’ Committee, owners, and facility management companies. Disputes are usually resolved through arbitration and mediation to minimize the chances of resorting to court.

9. Updates on Jointly Owned Properties in Dubai

Several modifications have been made to upkeep the management of jointly owned real estate in Dubai, including;

• E-Services and Digital Platforms
  Digital platforms and e-services were introduced in 2024 to effectively manage and supervise jointly owned properties in Dubai. Digital integration powers enhanced transparency and engagement within communities.

• Rigorous Standards for Facility Management Entities
  RERA has amplified its supervision over facility management companies, imposing stringent rules and higher service standards for reporting details. This modification is poised to improve accountability, ensuring property management service is in line with owners' best interests.

• Green Building Approaches and Sustainability
  With the advancement of the era, the UAE Authorities are constantly optimizing sustainable practices for efficient use of energy-saving practices. Owners’ Committee is stimulated to adopt measures like recycling programs, green building initiatives, and solar panel usage. Compliance with sustainability approaches may result in the reduction of service charges or tax benefits.

10. The Implications for Real Estate Investors

• Importance of Regulations among Stakeholders
  Understanding jointly owned real estate laws in Dubai is essential for stakeholders to enhance the protection of their investments. Exceptionally maintained shared spaces may lead to capital appreciation, whereas fair regulations also help attract foreign investors who respect a transparent and streamlined real estate sector.

• Dubai Property Sector’s Appealing Nature
  With a persistent uplift in the real estate market driven by a robust regulatory system and modern infrastructure, Dubai is growing to attract global attention. Likewise, jointly owned property regulations align with international standards and best approaches, ensuring investor confidence in jointly owned properties.

11. Expert Tips for Mastering 2024 Regulations

• Engage with the Owners’ Committee
  Collaborating with the owners’ Committee ensures your interests are considered and the property is managed appropriately. Voting on maintenance proposals, budgets, and community interests can also affect the allocation of funds.

• Remain Up-to-Date
  Owners are advised to stay informed about the latest developments, modifications, or regulations. This will help safeguard their interests and ensure compliance with the latest laws. Using e-services and participating in Owners’ Committee meetings are seen as proactive approaches.

• Consider Professional Consultation if Required
  Due to Dubai's dynamic environment, understanding the laws regarding jointly owned real estate may be complicated. In such cases, it is advisable to seek consultation from professionals. Dubai's Real estate lawyers can provide valuable insights into various property laws and joint ownership regulations.

Closing In!

Dubai's laws for jointly owned properties have been updated to extend benefits for stakeholders through a fair, transparent, and well-appointed system. With a focus on digitalization, stringent supervision over facility management entities, and sustainable approaches, property management laws in Dubai have a robust trajectory in the real estate sector.

Understanding these regulations is essential for investors and owners to maintain living standards while their rights remain protected. Compliance with laws can contribute to the smooth management of their communities. Dubai’s persistent advancements ensure cohesive protection for the owners, fostering investor confidence and the city’s reputation as a global leader in the property market.