Dubai Strata Impact

Gary Bugden played a leading role in developing Dubai's Strata regulations.
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Release of the regulations implementing Dubai’s Jointly Owned Property (or ‘Strata’) Law is imminent and a new era in property ownership in the Emirate is about to unfold, explains expert Gary Bugden

The Strata Law commenced on March 31, 2008 and, following consultation with property stakeholders, the Dubai Land Department has put the final touches to the implementing regulations. When promulgated, the regulations will complete a package of laws comprising:

• Law No 27 of 2007 Concerning the Ownership of Jointly Owned Properties;
• Owners Association Constitution;
• General Regulation Concerning Jointly Owned Properties;
• Regulation Concerning Jointly Owned Property Declarations;
• Regulation Concerning Preparation of Survey Plans.

Genesis and Application of the law

The Dubai Strata Law is broadly based on the Australian strata titles system which has been introduced in one form or another in numerous countries around the world. The Australian system has stood the test of time, first being introduced in New South Wales in 1961. The same system is in the process of being introduced in Abu Dhabi and is currently under consideration for a number of other countries in the region.

The version of strata titles being introduced in Dubai is nowhere near as complex and prescriptive as its Australian counterpart. This was a deliberate outcome to ensure that the new law accommodates the scale and complexity of Dubai projects and encourages the innovative and cutting edge development that has made Dubai famous the world over.

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While, in theory, the Strata Law could be used by a master developer to apply an Owners Association over the whole of a master community, this is not the intention. The core infrastructure associated with a master community will continue to be the responsibility of the master developer or any public authority, such as the RTA or DEWA, which is entitled to take it over.

The Strata Law is to be applied at neighbourhood, building and sub-building level within a master community. This means that its impact will be felt by master developers and sub-developers who are developing projects at that level. Although not essential, the Strata Law will also be able to be applied at precinct level; it will, therefore, be a useful mechanism for use in larger projects where commercial and residential components need to be separated.

Perhaps most significantly, the law will apply to completed developments right across Dubai. Any completed project containing jointly owned property (which is property that is jointly used rather than jointly owned) will have to be brought under the law by the developer of that project. This will include apartment buildings, villas and townhouses within master planned communities and, consequently, has the potential to impact upon many tens of thousands of completed apartments and villas across the Emirate.

Applying the law to completed developments has advantages for villa and apartment owners, including:

• Issue of a Government certified title to each property;
• Formation of an Owners Association to ensure owners have control of their development;
• A possible opportunity for
review of any long-term maintenance and service arrangements that may have been put in
place by the developer without the prior knowledge or consent of the purchasers.

Mechanisms introduced

Key objectives of the Strata Law are to facilitate development and preserve the standards of completed projects by ensuring that they are properly maintained. The law introduces a number of important development mechanisms for just these purposes:

• Strata titles;
• Community titles;
• Volumetric titles;
• Staged development;
• Tiered Owners Associations.