New Property Legislation from RERA
Dubai’s Real Estate Regulatory Authority (RERA) has unveiled new legislation to give responsibility to the developers for any structural damage to a property for 10 years after project completion which is expected to take effect during the month of April – May 2008. The aims of the new law are to monitor real estate development brokers, prevent fraudulent activities, and to increase investment rates. According to the legislation, the developer will be fully liable for all structural damage for 10 years (e.g. cracks on the walls caused by heavy rain or flooding); for any defective installations such as plumbing, mechanical and electrical problems for up to a year after project completion. Mr. Marwan Bin Gallita, CEO of RERA stressed that the owner must insure the building to cover the risk of such things as demolition or collapse in order to protect the homeowner. Every jointly owned property must have an Owner’s Association in accordance with article 17 of the new strata law. According to the new law, all owners associations will become legal bodies with bank accounts and contracts for a group of owners and the ability to sue and appear in court under its name. The owners association shall become legal bodies once a license from the Land Department is obtained. They will be responsible for the management, operation and maintenance of all common areas of the development. They will also maintain comprehensive insurance of the jointly-owned property and will be beneficiaries of this insurance. Each unit owner will pay his/hr insurance premium to the owners association. According to Mr. Marwan Bin Gallita, CEO of RERA, the new buyers of unit within a jointly-owned development will now have full access to records, diagrams, financial statements, and be able to review all the history before buying. This is to achieve confidence and security in the market.