'Strata' law: 1 April 2008

Now implemented, what effect will it have on the sector and when?

Gary Buckand is a consultant for the Real Estate Regulatory Agency.
Gary Buckand is a consultant for the Real Estate Regulatory Agency.

Now implemented, what effect will it have on the sector and when?

Strata consultant to the Real Estate Regulatory Agency (RERA), Gary Buckand, stressed the facilities management market is more likely to benefit from the implementation of the new 'strata' law.

Officially known as 'The Condominium Law No. 27 of 2007 Regarding Ownership of Jointly Owned Property in the Emirate of Dubai', the law was implemented on 1 April 2008.

Speaking exclusively to facilities management Middle East at a strata and community title law training session held by the Dubai Property Group, Buckand said: " I don't think there will be any immediate adverse impact on the facilities management industry. If anything there are a couple of new opportunities that arise out of the law.

The areas he mentioned were sinking funds and the concept of a volumetric sub division, where parts of the building are divided up and cost sharing is managed.

"I see facilities managers being the key people in helping to structure those sorts of arrangements. Similarly, they can assist or provide a service that will help with the study of the 10 year sinking fund.

Under the new law, unit owners will form an owner's association that will be responsible for the maintenance and management of common areas. This association will have a general manager (often known as a strata manager in other parts of the world).

Buckand stressed the clear distinction between the owner's association's general manager and a facilities manager.

"The skills sets are different. Facilities management is looking after the building, physical assets and equipment. The strata or general manager is more of a clerical or secretarial function.

The law states that the general manager will be responsible for the administrative, secretarial and financial affairs of the owner's association and shall work with the board (comprised of no less than three and no more than seven owners) to develop and implement appropriate strategic planning initiatives.

But although the law was implemented on 1 April, the industry is not expected to experience any considerable changes for some time due to the transition period not yet confirmed.

"There are two types of transitional issues. One, at what point do existing buildings/developments have to be brought under the new system. And secondly, at what point in time on or after 1 April, do existing projects that are currently being marketed have to comply with the new disclosure requirements," explained Buckand.

Dependant on their project's current status, developers will be considered for some form of relief in their obligations to provide a disclosure statement. RERA is currently looking into what circumstances will qualify for this relief.

RERA is part of the Government of Dubai's Land Department. It was established in July 2007 to formulate, regulate, manage and license various real estate related activities in Dubai.

For more information about the law, please log on to www.rera.gov.ae or phone +971 4 2222253.

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