The New Strata Law

The new strata law, officially known as the “condominium law no. 27 of 2007 regarding ownership of jointly owned property in the emirate of Dubai”, has been implemented on April 1, 2008. It is believed by experts that the law will have a positive influence on the facilities management sector, particularly on sinking funds and volumetric sub-division. Under the latter, parts of a building are divided and the cost sharing thereof is managed accordingly.

As per the new strata law, unit owners in a building or community will form an owners association that will take care of the management and maintenance of common areas. The said association will have a general manager (strata manager) as well. The law assigns the general manager the responsibility of managing the administrative, secretarial and financial affairs of the owners association. S/he will work in coordination with the board (consists of at least three and at most seven owners) to come up with and implement appropriate strategies and initiatives.

Though the law has been put to action, it will take some time to see the corresponding effects on the industry as the transition period has not been confirmed yet. The transition period in turn has the following offshoots to be considered:

• At what juncture do the existing buildings and developments have to be brought under the new strata law?

• At what juncture do the existing property projects that are being marketed have to come under the new disclosure requirements?

Property developers will be considered for some kind of relief from the obligation to obtain a disclosure statement. The Real Estate Regulatory Agency (RERA) is working out the details of the relief.

RERA is a body under Dubai government’s Land Department. RERA was formed in July 2007 and it formulates, regulates, manages and licenses various real estate related activities in the emirate.