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New Law Issued to Regulate the Joint Ownership of Real Estate in Dubai

30/9/2019

Law No. (6) of 2019 has been enacted to oversee jointly owned properties in Dubai, including the way Facilities Management (FM) business works.

Law No. (6) of 2019 has been enacted to oversee jointly owned properties in Dubai, including the way Facilities Management (FM) business works. This law shall provide a regulatory framework designed to boost competitiveness, enhance investment in the real estate sector and ensure the rights of all parties are protected.  It has been developed to further regulate or empower the recently issued Law No. (4) of 2019, the Real Estate Regulatory Agency (RERA).

This law covers all major projects and jointly owned properties in Dubai, including those located in free zones and special development zones.

According to Law No. (6) of 2019, the Land Department should maintain a register for jointly owned real estate properties. The Land Department is responsible for issuing ownership certificates and documents related to individual units in jointly owned real estate properties as per the terms and conditions of Law No. (7) of 2006 pertaining to real estate registration in Dubai.

The developer is required to submit all necessary documents of the jointly owned real estate project to the Land Department within 60 days of the completion date and receipt of completion certificate; the same can be extended by 30 days.

Jointly owned properties are divided into three categories for the purpose of management of common areas. The developer cannot be part of an owners committee unless there are unsold units. The committee is tasked with ensuring the proper management of common areas and reviewing annual budgets.

The FM provider is also responsible for obtaining insurance coverage for the project. The FM company cannot charge fees for operating or maintaining common facilities unless it receives an approval from RERA.

The FM firm should submit reports every six (6) months to RERA on the management of the jointly owned real estate property and common areas.

Any violations are subject to financial penalties up to UAE Dirhams 1 million. Penalties will be doubled in case of repeat violations within a year up to UAE Dirhams 2 million.

This Law annuls Law No. (27) of 2007 pertaining to the joint ownership of real estate in Dubai and any other law that contradicts it. The clauses and regulations of Law No. (27) of 2007 will continue to be in effect till the issuance of new regulations of Law No. (6) of 2019, unless it contradicts it.

The Law is effective within 60 days of its publication in the Official Gazette on September 19, 2019.

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