Dubai’s new JOP law

Dubai’s new JOP law: How do things change between Facilities Management (FM) and Owner Associations (OAs)?

Facilities Managers and Owners’ Associations are sometimes perceived as being two entities at odds with each other. It’s likely that you have come across that view before, or it might even be a perspective that you share. Nevertheless, operating from such a presumption isn’t inevitable. After all, both entities worked towards a common goal – that of maintaining a property in optimum condition and ensuring delightful tenant experiences. Recent developments, in regulations that govern jointly owned properties, are a good reason to revisit presumptions about this relationship, no matter where one has stood on the subject, in the past.

Law No. (6) of 2019 – which concerns the joint ownership of real estate in Dubai – came into effect on the 18th of November this year, and one of the key changes it enforces is the abolition of existing OAs and the transfer of rights and obligations to management entities (MEs).

No OA, but owners’ committees

Perhaps you are the owner of such a property, and are wondering if entrusting a new entity with such crucial responsibilities will cause too much of a disruption? Rest assured, if anything, under the new regulatory framework RERA can monitor the proper management of JOPs far more directly. The upshot of the rejigged regulations is likely to be better management of common areas and building structures. 

As an owner, you might also wonder if the fact that OAs are no longer legal entities will alter what you have come to expect of FM companies?  Well, the new law goes to great lengths to define the roles of developers, OAs and FM service providers. In the reconfigured model OAs will be replaced by “owners’ committees” – who must meet certain eligibility criteria. If you have an existing owners’ association, you will need to ensure the transition to an owners’ committee, no later than 17 May 2020. The managing bodies or MEs, which will take on many of the responsibilities that OAs previously governed, will be either developers or trained property management companies appointed by the developer, via RERA-approved contracts. 

So how is this different from the past?

Under the now defunct Law No. 27 of 2007, Facility management companies operated as independent contractors who provided services such as cleaning of windows and common areas, landscaping, MEP etc., while the community manager addressed big-picture community needs and goals. An easy way to demarcate these roles is to consider what the functions of these entities would have been in a hypothetical situation.

For instance, if there was a disruption in community services at 3 in the morning, who would be the first responder? As the administrative head, the OA manager would have ensured that the right experts were in place to take care of such operational needs, so the duty in question would be handled by the FM service provider. In fact, the FM manager and his team would always the ones to spring to action when dealing with any issues across functional requirements such as security, parking, lighting, lifts, HVAC etc. The OA manager, one the other hand, would be the one negotiating service level agreements, ensuring that the expectations of owners were adequately served, and other such overarching concerns.

MEs take centre stage and RERA gets more hands-on

With the OAs no longer in charge, MEs are now responsible for many of the responsibilities that owners previously executed. Some of the advantages of taking this approach include leaving crucial operations in the hands of professionals. Owners’ committees take on more of a monitoring role, under the regulatory guidance of RERA, which more accurately reflects their status as customers receiving a service. MEs, on the other hand, will perform the managerial functions and assume the responsibility of sticking to regulatory guidelines.  At the top of the regulatory framework, as the body conducting inspections, monitoring adherence to law and assessing the efficiency of the FMs and MEs, is RERA. Leaving you, the property owner, in safe hands and with your needs met and rights ensured.

So, what do these changes mean for FM companies? Although some of the rules governing them are now more stringent, much of their day to day approach is largely unaffected. FM companies will now be required to submit reports to RERA every six months – on the management of the JOP – but in most other ways they will continue to function much like they had in the past.

With the overall maintenance of community assets and quality of services as a focus, the new reassigned roles will result in a far more accountable management of jointly owned properties. As the owner, it’s the quality of your everyday living experiences and the value of your property, which the new JOP regulations ultimately secure more effectively.