Strata Update: Stasis Quo

Stephen Kelly of Clyde & Co.
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The implementation of the strata law still hinges on the long-awaited regulations. Is the industry ready for them?

Dubai’s strata law was first enacted in November 2007, with the theory that the accompanying regulations would come out by April 2008.

Here we are in April 2010 and there are no regulations. While rumours about the imminent release of the regulations are hotting up, the fact is the property industry is still waiting. This is the stasis before the transition.

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When the regulations are released, there is likely to be a frenzy of activity as buildings make the long journey to compliance.

“It may take up to six months to bring a building into the strata regime,” says Stephen Kelly, a senior property lawyer with Clyde & Co’s Dubai office. “Given the number of lawyers and consultants available, that is going to be a tough task.

“There may not enough professional power to make that transition happen. But I think most of those organisations are waiting to resource and, that being said, for a reasonably complicated building, it takes three to six months.”

The period of retrospective implementation could be prolonged if the regulations are particularly tough or complicated. The hope is that this will not be the case, and that they will be a clear and simple addition to the framework established by the law.

“If the laws and regulations are clear, they will not be difficult to implement,” says Elaine Jones, CEO of Asteco, a property-management company. “Many of us have been doing property management and have engaged a mixture of nationalities who have experience with a variety of approaches.

“Fortunately the software required for managing home owners’ associations is available from a variety of different markets.

The learning curve may be a little tough, but I am confident there are enough well-qualified people available within a reasonable timeframe. Interestingly, teaching the owners will also take some time, as their understanding and perception may well be different to the reality.”

There will be much to be done. Once the requirements are revealed, there could be a small windfall of business for key professions. Top of the list, according to Kelly, are surveyors.

“Buildings generally have not been surveyed, except by the contractor,” says Kelly. “They are going to need proper surveying, with proper methods. The cost of doing all that for a big development is massive.