When should the owners association be formed?
The Owners Association shall be legally formed when the first single unit sale is registered in the Owners Association Register with the Real Estate Regulatory Agency.
How membership is associated with the owners of a unit?
All unit Owners in the jointly owned building/project shall automatically become members of the Owners Association. Their share in the common property is proportional to the space of their unit in the overall space of the building’s common areas. Property Developers may be members of the Owners Association as a representative for unsold units / lots in a building or development.
The membership of the Owners Association shall cease when they dispose of their interest in the unit. The Owners Association can sue and be sued. They shall operate as a business in its own right.
What is the common property?
The common property areas of a property are those designated for use by unit owners and occupiers as shown on the site plan. For jointly owned property, common areas will include structural areas of the building supports, foundations, columns, beams and walls, steps, ceilings, windows located on the exterior of the building, entrances, and supporting structures for each of these.
The common areas of buildings may also include entry lobby, lifts, stairwells, gymnasiums, swimming pools, BBQ areas, watchman rooms, roof, car parks, gardens and surrounding grounds, open spaces, within the boundary of the plot, hallways and utility equipment and utility systems including drainage, pipes, ducts and devices to provide utility services to the building and individual units within the building.
The common areas of jointly owned land other than buildings includes but may not be limited to roads, intersections, roundabouts, pavements, footpaths, canals, ponds, lakes, fountains, and all associated equipment for operational usage, landscaping and open spaces, playgrounds, wires, cables, pipes, sewers, and devices required for measuring usage of utility supplied services to common areas.
What are the duties and functions of Owners Association?
Both the Owners Association and the Individual Members (Unit Owners) are responsible for the property management of the building. Every owner of a unit has the responsibility of maintenance and repairs in their own individual property according to the rules and regulations of their building. No changes or additions can be made to an individual lot without approval from the Owners Association.
Matters such as collection and banking of the annual maintenance fees from lot owners, the financial administration, payment of accounts such as electricity, lift maintenance, municipality charges / fees, management of repairs, and general maintenance of the building common areas, insurance of the building and the common areas, entering into contract agreements, ensuring the safety of tenants and visitors to the building, improvements to the building all come under the functions of the Owners Association and is administered and carried out by the Committee representing the Owners.
The Owners Association constitution is the blueprint for the Owners Association; it articulates the proceedings and rules of the Association. This is provided by the property developer for all owners in the building.
What are the administrative duties of Owners Association?
Dealing with matters such as payment of accounts invoices e.g. for water, electricity, air conditioning, etc, arranging repairs quotes, overseeing the works of contractors and or employees, collection of maintenance levys preparation and distribution of notices, meeting agendas, and minutes of meetings, attending to correspondence, maintaining the Owner’s Roll register, the preparation and distribution of financial statements and budgets, banking, attending to orders, contribution notices, submissions and any legal matters are the administrative responsibility of the Executive Management Committee.
Who is authorized to manage the Owners Association?
The Management of the Owners Association may be ’self-managed’ or a specialized, qualified and experienced Owners Association Management service provider may be engaged on a contract basis by the Owner’s Association.
- Self – management of the Owners Association is possible providing all legal requirements are met and the running of the building complex is consistent with the major decisions made by the majority of all unit owners. These decisions made at general meetings must be carried out effectively and cost effective by the majority vote applies, all records and registers are fully maintained and any conflict of interest must be declared in decisions whereby Owners funds are being expended.
Owners Association Management service provider: Care should be exercised in engaging external Owners Association Management service providers. These service providers are specialists in their field and operate on a fixed fee contract basis. A list of approved Owner’s Association Management service providers shall be available from RERA. They require a thorough knowledge of dealing with the legal aspects and requirements, dealing with the often large group of Owners, the day to day affairs of managing the Owners Association business affairs, and a knowledge of buildings, construction and maintenance particularly for large high multiple unit buildings.
What is an Interim Owners Association (IOA)?
About Interim Owners Association (IOA)
Due to pending the issuing of the Regulations, RERA has authorized the setting up of Interim Owners Association (IOA). These interim organizations have allowed Owners to more effectively present their views to RERA and the developer as well as keeping the owners informed.
Regardless of whether a unit has been transferred or not (but upon completion of the development) the developer must call an Interim General Assembly (IGA) by providing to all purchasers a notice giving at least 21 days’ notice of the date, time and place of the IGA. A copy of the notice and a schedule of all purchasers and addresses must be provided to RERA.
Once the Interim Board (other than developer) is elected the developer must hand over to them a full register of purchases and their contact details and any other information relevant to the operation and development.
What is the purpose of Interim Owners Association (IOA)?
The purpose of the Interim Board (IB) is to facilitate the setting up of the Owners Association (OA) by allowing:
- Interim Board to liaise with the developer and obtain better understanding of the development and system (review draft budget and contracts);
- Interim Board to research Association Managers (AM) and other supply contracts and to review any contracts that the developer may propose and entered into;
- Interim Board to liaise with RERA concerning the content of Jointly Owned Property Declaration (JOPD) or Building Management Statement (BMS);
- To refer any supply agreements, Jointly Owned Property Declaration (JOPD) or Building Management Statement (BMS) to lawyers or consultants for independent advise;
- To report to the Interim Owners Association (IOA) with its findings and recommendations;
- The Interim Owners Association (IOA)and Interim Board will conduct their affairs in accordance with the constitution regulations.
Any decision of the Interim Owners Association or Interim Board will not be binding on the Owners Association. The purpose of Interim Owners Association is not to transact the business of the Owners Association but to facilitate its establishment and the taking over of its responsibilities.
The Interim Board will however be entitled to be fully indemnified by Owners Association for any costs it incurs in obtaining independent legal or consulting advise.
In certain circumstances (e.g. where developer no more exist) RERA may allow limited licenses in order that the IOA can have limited legal status as an OA including:
The ability to monitor the tendering process and approve selected service providers within the development;
- The ability to monitor the performance of goods or service providers;
- The ability to monitor the budget and approve in conjunction with RERA, the Interim Service Charges;
- The ability to propose improvements to the development;
- The ability to approve Interim Community Rules and changes and/or any amendments to these;
- The ability to approve auditors and the terms of any audit;
- The ability to endorse the collection of Interim Service Charges.
RERA emphasis that developers and Interim Owners Associations must act in the utmost good faith with regard to their obligations and responsibilities as set down in the Regulations. In the absence of good faith RERA reserves the right to resolve any disputes with regard to the filing of JOPD and related documents as RERA deems appropriate.
What are the relevant laws?
The relevant laws comprise the laws, regulations and directions as set out below:
- The Civil Code No. 5 of 1985 (The Civil Code is a federal law and is therefore applicable in all Emirates)
- Common ownership including in particular the following:
- Foundations and structural walls;
- Party walls, walls of entrances and walls supporting the roof;
- Ventilation ducts for amenities;
- Roof supports, gangways, entrances, yards, ceilings, stairs and stairwells, corridors and passages, floor supports, lifts, porters rooms and;
- Heating, cooling appliances and other pipes, nozzles, drains and installations and extensions used in common such as lighting and water appliances and appurtenances, and all that forms part of the building save those parts inside any particular floor or apartment.
- Law No. 27 of 2007 - "Jointly Owned Property Law” - Law was passed in 2007 and laid foundation for a comprehensive framework to regulate Jointly Owned property.
- Direction for General Regulation - "General Regulation” - General Regulation deals with consumer rights;
- Direction concerning “Jointly Owned Property Declaration Regulation”;
- The “Constitution Regulation”
This regulation sets out a mandatory form of Constitution. The Constitution deals with the internal procedures of any OA such as calling of meetings, passing of resolutions, appointing of Board members, approving of budgets, appointment of contractors and amending of Community Rules. Also describes the role of Board and Association Manager
- “Survey Regulation” and Directions – Provides the accreditation and registration of surveyors, the duties of registered surveyors, suspensions and cancellation of surveyors etc.,
- Directions on the calculation of “Area Entitlement”;
- Directions approving forms;
- Survey Directions
Why do we require reserve fund?
Maintaining reserve fund not only meets legal, fiduciary and professional requirements, it also minimizes the need for special assessments and enhances resale values. Every associations requires a different amount of cash in reserves to complete repair or replacement project schedule without special assessments or loans.