New Dubai strata law leads to eleventh-hour scramble

Fears grow that RERA may impose fines on developers who have not begun to form homeowners' associations.

The deadline for the strata law is drawing near and fear of fines for non-compliance grows.

DUBAI // Property developers were scrambling to meet yesterday's deadline to comply with the new strata law as fears grew that the regulator would impose fines on those that had not begun to form homeowners' associations. 
Just a fraction of developers around Dubai had filed paperwork that describes jointly owned property in their buildings or started the process of forming the new associations, observers said.
"There has been a noticeable sense of urgency," said Kent O'Brien, the chief executive and managing director of Strata Global. "However, this has not seen a concurrent increase in the number of developers wanting to comply. 
"It's only from those existing developers who have been planning their developments in accordance with the laws and directions and who understand the intrinsic rights of owners in freehold property as it relates to jointly owned property in Dubai."
Mr O'Brien said the Real Estate Regulatory Agency (RERA) could impose fines up to Dh1 million (US$272,000). He referred to "numerous developers who persist with this mindset of non-compliance on the old adage that no one will force them because other regulations in Dubai are never forced". Major developers said they were in compliance with the law. Emaar Properties said it was working with homeowners to set up the interim owners associations, while a Nakheel spokeswoman said "the strata law is in process".
The strata law was originally published more than two years ago to govern how owners in developments with multiple owners pay for the upkeep of jointly owned property. But the regulations required to adhere to the law were issued only six months ago. The deadline has been hailed as a critical moment in Dubai, where power over maintenance fees and upkeep of buildings shifted in large part from developers to homeowners.
Graham Yeates, the strata manager for Cluttons Middle East, said it marked "a new era in Dubai". 
"There has been a definite effort on the part of developers to comply with the timeline in recent weeks," he said. "We have been overwhelmed with inquiries to assist with the registration process. 
" I guess the deadline has snuck up on all parties with RERA having to absorb a mass of inquiries and paperwork . Developers and strata consultants are working frantically to complete their obligations."
Lawyers said there was still a large contingent of developers that did not appear concerned about missing the deadline. Michael Lunjevich, a partner at Hadef & Partners, said the increase in inquiries around the deadline was "not significant enough to make us believe developers are worried about the deadline". 
He said there were still legal issues surrounding the regulations that had yet to be resolved, and which had given some developers the impression that they were not final.
This week, Shahram Safai, a partner at Alfridi & Angell, said fewer than 10 per cent of his clients were focusing on compliance, while the rest ranged from complacent to compliant, but late. Michael Ryall, a director at Place Strata Management, said that while many companies were making efforts, "time is needed to implement the regime". 
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