Dubai Announces New Law on Joint Real Estate Ownership

Recently,  a new law has been passed by the government of Dubai regarding joint real estate ownership. The move is part of a regulatory framework intended to improve real estate investments in the emirate.

Law No. 6 of 2019, which was issued by UAE Prime Minister and Vice-President Sheikh Mohammed bin Rashid Al Maktoum, was designed for jointly owned properties in Dubai, even those which are situated in special development zones.

The law will come into effect within 60 days after it’s published in the Official Gazette. Failure to follow the said law will subject violators to financial fines which can reach up to Dh1 million. However, the penalty can be doubled for those who commit repeat violations in a year.

With the implementation of this new law, the Dubai Land Department will open a register meant for joint real estate properties. It will require all details related to the management of said properties to be registered. Meanwhile, the Dubai Land Department is the one responsible for issuing documents and ownership certificates to individual units that belong in a joint real estate property.

The law requires developers of a joint real estate project to submit all required documents within 60 days after the project has been completed and the completion certificate is received.

There are three categories that joint real estate properties fall under. The first category involves mega projects in which the developer operates, manages, and maintains common areas and facilities. The second category involves hotel projects in which the developer appoints another party to manage the areas. The last one includes real estate projects in which a specialized facility management company is the one responsible for managing the common areas.

Under this new law, the developer should implement building management systems for their mega and hotel projects. Accordingly, the system should first get approval from RERA (Real Estate Regulatory Agency) before any transactions are made.

Moreover, the owners’ committees for mega and real estate projects should only have a maximum of RERA-appointed members which should be established upon successfully registering 10% of the joint real estate units.

This also prohibits the facility management company to collect operation or maintenance fees for common facilities unless approved by RERA. They should also submit a report every six months regarding the management of the common areas and the joint real estate property.

According to the new law, RERA’s CEO has the power to appoint another company in the event the current management company or developer isn’t able to maintain the common areas properly.

Meanwhile, RERA has the authority to appoint another management company for real estate projects to oversee the common areas in a joint real estate project.