The OAM revolution

Roger Ghandour

It’s widely acknowledged that the Jointly Owned Properties (JOP) Law has had a number of implications for FM companies working with jointly owned properties in Dubai.

The JOP Law is set to change the framework by which owners, developers, service providers, facility managers and more recently, owners association managers (OAMs) interact within the service delivery chain of building management services.

The entire management structure of managing jointly owned properties is changing. Previously, developers and their appointed FMs would dictate service levels, budgets, and service providers with little say from owners.

Now the JOP Law places the right and the responsibility on the OAs to directly negotiate and set the terms and conditions with the service providers to their buildings, reducing the number of intermediaries, which should help drive costs down.

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But are OAs, or the newly licensed OAM companies, experienced enough to manage jointly owned properties, especially the larger mixed use communities, to the standards expected by owners? It would be a mistake to totally eliminate FM companies from the supply chain, since they already carry many of the critical systems required to manage a property effectively.

In addition to the legal constraints faced by FM companies, there are other implications the JOP Law has had, such as contractual implications. JOP Law allows supply agreements with OAs for at least one year and not more than three years.

FM companies who are currently engaged with jointly owned properties might find themselves under legal and contractual constraints. Some FM companies have therefore entered into short-term contracts with developers or IOAs.

The solution may work in the short term, but in the long run it places constraints on resources, hinders ability to deliver economies of scale, and increases the risk of discontinuity of services. In addition, FM companies face risk of early termination when the OA votes in a licensed OAM company to manage their operitions.

FM companies planning to work with jointly owned properties must understand the requirements of their new clients, which goes beyond their typical scope of work including admin of the association such as organising the annual general assembly meetings of owners; board meeting management, compliance with RERA, collection and payment of service charges, and enforcement of the (JOPD) and community rules.

FM companies who want to remain in the OAM industry may face several barriers to entry. Mace Macro International realises the potential challenges and conflicts stemming from recent regulations and has been careful to keep its position clear. Earlier this year, Mace Macro Owner Association Management was launched to service the jointly owned property market.

While still part of the Mace Group of companies, it is still a separate legal entity in its own right. As such, we are in a unique position, as we are probably the only OAM company to have launched with the direct support of our sister company that is independent from the supply chain and that brings the best in FM expertise to the market.

Given the close similarities between FMs and OAMs, there is a commonly held ‘them and us’ view and our approach is aimed at breaking down some of the barriers and changing perceptions of this sector of the real estate market. It is bringing the best of OAM and FM together so that we are able to provide all required services OAs need to maintain a healthy operating budget and positive community lifestyle.

Several OAM companies in the market focus only the administrative and financial aspects and less on the FM aspects, often subcontracting them, a violation of the JOP law and the responsibilities of the OAM.

Mace Macro Owner Association Management has the necessary resources, staff, systems and understanding for managing OAs and we see ourselves as breaking the mold and setting the direction for other FM companies keen on entering the market.

Right now, the focus for some OAs will be to drive costs down. The consequence of this will be very quickly felt if not done for the right reasons. As with all infant markets, OAs will come to realise the delicated balance between quality and price, which only an experienced AM can deliver on.

Roger Ghandour is the director of association management at Mace Macro