August 16 2009

Asked whether developers also have the best interests of home owners at heart when managing residential communities in the UAE, 8 in 10 respondents said no.

The opinions were expressed in the results of the latest Real Opinions survey in the UAE.

The survey follows a dispute in June between tenants and homeowners in Dubai’s Discovery Gardens who threatened legal action against Nakheel unless service charge fees were further reduced.

Research conducted by the Dubai-based market research company showed that more than 9 in 10 residents who own property in the UAE believed companies should be fully accountable to owners and any rules or regulations within managed residential communities should be voted upon by owners first.

Dan Healy, CEO of Real Opinions, said: “Media reports in the UAE have documented the challenges some developers are having managing communities they have built.

"Property management may be perceived by some developers as a viable business model to raise revenues, but owners and residents are requesting for them to be at the heart of decision making.

"Owners are seeking value for money and expect their fees to be paying for the services and upkeep of their communities and not be diverted elsewhere for the benefit of the developer.”

He said the days of developers being able to decide service and maintenance charges on their developments unilaterally appear to be coming to an end.

The internet is proving to be a refuge for aggrieved owners to communicate with each other and to even form their own owners associations, he said.

Healy added: “Unofficial owners associations are becoming much more sophisticated and organised by embracing the internet. They’re using Facebook and other social networking websites to interact with each other and to be a rallying point for owners.

"As a result of what appears to be an absence of a formal channel of communication, committees are even being formed to represent owners and are increasing their influence by engaging with not only their developers but also Real Estate Regulatory Authority (RERA) in Dubai who are in the process of establishing guidelines for the industry in this emirate.”

The Real Opinions survey also revealed the most popular community management ideas were inthe UAE.

Just under half of respondents said they would prefer to have the owners vote to appoint a company to manage, set fees for owners and look after the shared facilities.

In comparison to the present set-up for many in the UAE, just 9 percent preferred the developer to carry out these roles.

In terms of the contentious issue of fee levels for managed communities in the UAE, 44 percent thought a fee based upon square foot/area covered would be the fairest rather than on the value of the property (20 percent) or number of bedrooms (16 percent).

Healy added: “The usage of the internet by Owners Associations is also providing insight for potential property owners in the UAE from around the globe.

"These online communities are providing a window on the levels of satisfaction from owners in these residential communities and the ability to engage with them by asking questions.

"As a consequence, the value of such property can be impacted based upon both high and low levels of satisfaction and in turn further justify the concern and actions of owners in protecting their real estate assets.

"Overall, research results show that managers of these residential communities would be wise to open up the channels of communication and place the opinions of owners at the heart of decision making to ensure their satisfaction for the benefit of all, including the developers themselves."

In June, tenants and homeowners in Dubai’s Discovery Gardens threatened legal action against Nakheel unless “exorbitant” service charge fees are further reduced.

The Dubai-based master developer announced it was lowering the service charge by AED5 per square foot.

Despite this reduction residents say they are still paying far more than tenants in similar developments across the Emirate.

Source: Emirates Business 24/7