BBET Community Report
11 March 2013
Letter to RERA in response to Taziz prepared BBET
Mr. Ahmed Hamdani and Mr. Khalid Alkazim, RERA
Mr. Mahmud PK Merali, Meralis
Mr. Nezar Oayda, Taziz
The members of the Tower B IOAB
On 3 March 2013 Taziz Property Management Solutions (Taziz) issued their
first BBET Community Report to owners.
The document is misleading and fails to address the concerns of the Interim
Owners Association Boards. The Taziz proposals for 2013-2015 are poorly
thought through lacking timescales and measurement.
In the interests of providing relevant parties with a balanced perspective
of issues at BBET I have reviewed the document page by page and comment
Page 1. Introduction.
Contrary to their report for three years Taziz has set out to avoid
meaningful communication and engagement with the owners of property in BBET.
Taziz notes as an achievement that they have issued the audited reports for
BBET’s 2010 financials. It is now March 2013. There is not a hint of
embarrassment that the accounts were nearly two years late.
Taziz has shared the audited financials with the chairpersons of the Interim
Owners’ Association Boards (IOABs). However, the IOABs cannot share the
financial statements with the owners that elected them as Taziz has refused
to give the IOABs any contact information for the owners. This is despite
the fact that every owner at BBET is regularly contacted by real estate
agents offering to sell or rent their property. Real estate agents may
contact the owners; but the board that the owners elected to represent them
Taziz has not distributed the 2010 financial statements to owners.
Meralis are the BBET auditors. Their 2010 audit report raises a number of
The auditor states that “the Association” has appointed Taziz Property
Management Solutions LLC as the managing agent. In 2010 the agent was
originally Salwan Management LLC and from November 2010 it was Dubai Asset
Management LLC. Taziz became managing agent in mid-2011. These appointments
were not made by the owners or their elected representatives. The
appointments were all made by the developer without consultation or tender.
The developer is conveniently, although this is not mentioned in the audit
report, the parent company of each of these three managers. The accounts
should have reflected the changes in manager and their appointment by the
The appointed facilities management (Idama) and security company (Arkan
previously Dubai Security) are also wholly owned by Dubai Properties. No
tender of their services has been carried out. There appear to be no KPIs to
measure the effectiveness of their work, to compare their services against
other vendors or to ensure value for the owners.
Law No. (27) of 2007 Concerning Ownership of Jointly Owned Properties in the
Emirate of Dubai has a code of conduct for Association Managers states in
Schedule 2 that:
“Item 6. An Association Manager must not do anything that would have the
effect of placing their interests in conflict with the interests of the
Item 7. An Association Manager must disclose all relationships in writing to
the Owners Association regarding any actual, potential or perceived conflict
of interest between the Association Manager and any other supplier of goods
or services to the Owners Association. The Association Manager shall take
all necessary steps to avoid any favoritism or impropriety during the
selection process and negotiation of any contracts with suppliers.
Item 9. An Association Manager must take reasonable steps to ensure that
goods and services procured by an Owners Association are procured at the
most competitive prices reasonably obtainable.”
The Association Manager has not met its obligations under the Code of
Conduct. The auditor reported that “no violations of the relevant laws and
the rules of the co-owners constitution have occurred during the year.”
This appears inconsistent with the Association Manager’s actions.
Page 2 RERA Compliance
Taziz states in their report that “The OA allows owners to participate in a
transparent process or management in the community.” For three years Taziz,
and its predecessors, have successfully ignored this and ensured that the
owners have absolutely no involvement in the management of BBET. The
auditors even noted that “no tender process for contracted services was
followed” in 2010.
The IOABs have been given no timeline to complete the registration process
of the IOAB. The IOABs have not been involved in, or consulted in, the
review and drafting of the JOP, BMS and Theoretical Survey.
Pages 2 to 4. Our achievements.
Taziz and its predecessors have provided BBET with three years of missed
deadlines, ineffective management and misrepresentation. They have failed to
engage and work with the IOABs.
Deadlines: Deadlines, either self-imposed or advised to them have not been
met. Just as examples, in Nov 2010 owners were advised that the access roads
were to be completed in six months. They are still not complete. On July
26th 2012 we were told that 2011 service fees would be invoiced in August
2012. They were eventually invoiced on 13 November 2012. There are too many
examples to list here.
Infrastructure: Lobby areas: Primary pedestrian access is through ground
floor car-parks into temporary lobbies. These are poorly lit; dangerous due
to fast moving traffic, poorly secured (anyone can, and does, walk in
without any form of identification) and aesthetically awful (they look and
feel temporary). A security card sits at a temporary desk. Elevators remain
in poor condition with damaged walls and mirrors.
RTA Roads: the RTA road network providing access to BBET has been shambolic
for three years. For most of that time access has been on rough, unmade
roads. Residents have had to put up with this but at times it has been
disgraceful. Even now access is not complete and exits from both West and
East Heights require use of temporary exits.
Car parking: external car parks were not a part of the initial renderings.
But the developer did not provide adequate parking for office use or
visitors. The Sheikh Zayed Road frontage is still known as Garden View; the
rear is still known as Lake View. The reality is three side of the
development are to be given up to car parking.
There has been no consultation with owners, or communication to owners,
about the changes to the master plan or what mitigating efforts, such as
landscaping, and recreation/play areas will be made to improve the
aesthetics of the car parking.
Pictures of some of the original front and rear renderings:
All owners have designated parking places in their SPAs but these are not
used in East Heights. I have not once parked in mine, which for the first
year was used as storage for building materials.
In order to rent out office space Taziz has advised Aspect Tower tenants
that they may use any available space in East Heights. Effectively Taziz
provided access to parking spaces that have already been purchased by owners
of BBET. Without parking Taziz would never have been able to let the office
space. The more office tenants the worse the parking situation became. It
also has led to drivers entering and accessing the building far too fast
without thought of residents. There are no warning signs or speed bumps at
the entrance and exit to East Heights. Problems with access to parking has
led to unpleasantness between owners, residents and visitors and to many
residents trying to block access to their space with cones, blocking devices
Safety and Security: The best that Taziz can say here is that they had a
fire drill for the office tower. Given recent high profile fires in high
rise buildings in JLT and Downtown Taziz could have made a far greater
effort to ensure the safety and security of tower residents.
There remain far too many people who appear to have access to the common
areas of the development without identification. Car parks are poorly lit
and not secured. This is a particular concern for people that work late
night shifts or come home in the middle of the night.
Retail: it would only be the most cynical who would observe that the artwork
on Business Bay Avenue conveniently obscures the undeveloped space behind
BBET which was originally set aside for a lake and recreational area. Once
again there has been no consultation with owners about the future use of
The water features on Business Bay Avenue have already been shut down and
appear to be under reconstruction; after just one year.
Communication Channels: Taziz has been “looking into” a BBET Community
Portal since 2010. A newsletter for owners and residents saw just three
editions in 2011. There is little expectation of improved communication
other than to issue service fee invoices.
Page 5 Audit Results.
See also notes above under Introduction.
Taziz claims that “the objective of the audit was to demonstrate the
transparent process through which the owners are guaranteed that service
charges are being collected solely for the purpose of the community.”
Let us deal with that claim. Firstly the audit was solely for the year to 31
December 2010. Secondly note 9 clearly states that “no tender process for
contracted services was followed.” Secondly over AED3.3 million was due from
BBET Tower B to Taziz and to other DPG companies. This represents 48% of
total expenses; the balance of which is almost entirely made up of utility
charges. Replicate these figures across 11 towers and there are substantial
payments being made to DPG group companies for services that appear to have
no supporting contracts (as these have not been shared with the owners
elected representatives) and that have no associated KPIs.
Transparency at BBET is a myth. The IOABs have requested the following
documents from Taziz: Taziz’s most recent response on 3 February 2013 to
this request is shown.
a. List of all contracts that were entered into with all the
parties, specifically those under the headings "Maintenance" and
"Administrative" in the audit.
Contracts to be distributed at time of registration.
b. Original invoices for the above expenses.
Invoices to be distributed at time of registration.
c. Copy of the audited trial balance and all the supporting
To be distributed at time of registration.
d. Copies of the invoices and/or contracts in support of the
To be distributed at time of registration.
e. The basis of arriving at the Master community service
charges expense of AED 2,183,694.
Meralis is an AFRS accredited auditor. The firm had access to all
relevant documentation and performed the required audit in order to sign
off on it as being true and correct.
f. Copy of the RERA approved detailed budget of Master
To be distributed at time of registration.
Community fee: The IOABs have not been provided with audited financial
statements for the BBET master community. The Tower B fee of AED2.2million
for 2010 does seem remarkably high; and of course is replicated across the
development. There were no community facilities in 2010; no pool; no gym; no
landscaping; no retail outlets; no road access beyond a dirt track. Without
the ability to review the master community charges and accounts the IOABs
are unable to fulfil their role of supporting the BBET owners.
Role of the IOAB: I have never understood why DAM/Taziz/DPG have
consistently refused to work with the IOABs as part of managing the ET
community. Among the owners are some talented, experienced and highly
qualified individuals; many of whom were willing to give of their free time
to support the development of the BBET community. The IOAB members were
elected by the owners. It is clear from the Taziz response above that they
have no intention of working with the Interim Boards.
I also cannot understand the rationale for not sharing owners’ contact
details with the IOABs who were elected by those same owners.
Budgets and Services Fees: No budget has ever been provided to the IOABs for
any year including 2012 and 2013. There is no detailed explanation of the
2011 and 2012 service fees levied on home owners and business entities of
Executive Towers. The 2010 accounts were not signed until 11 November 2012.
For Tower B RERA approved a 29% increase in service fees for 2011 compared
to 2010 (remember there was a surplus in 2010). No explanation has ever been
provided for this increase. Any documents or information shared with RERA to
obtain approval of the fees were not shared with the IOABs.
Page 6 Our Objectives for 2013-2015
This is a feeble and short list of platitudes without any performance
measurement criteria. Most of the objectives relate to internal management
issues within Taziz that will be of little obvious tangible benefit to
What is included:
Increase operational efficiencies. There
are no example and targets.
Enhance current strong financial
management. Improvements in processes, systems and controls.
Establishment and formalisation of
associations. No target dates are given. No details of the steps to be taken
are given. Since Taziz has failed to work with elected interim boards why
does the formalization of associations make any fundamental difference?
A community life cycle plan will be
commenced in 2014. Why is this not starting immediately? The auditors have
already commented that they are unable to assess the adequacy of the sinking
fund without such a plan.
What could be included in 2013-2015 objectives?
This list is not intended to exhaustive but would represent genuine
improvements for owners and residents. Liaising with the IOABs would produce
a more thorough list and would align the owners’ expectations with the
manager’s capabilities and the BBET budgets.
Finalise car parking and issue of parking
access tokens. With completion date.
Publish cleaning schedules for each tower
so that performance may be monitored. For instance window, lobby and car
Publish schedule for regular maintenance
Present plans for agreement of owners and
complete landscaping at front and rear of BBET. Review and completion dates.
Carry out substantial renovation of
elevators and of lobby areas. Budget and schedule required.
Elimination of all façade creaking across
BBET. For some towers this remains a serious issue that the developer and
its appointed manager have consistently failed to address.
Issue of 2011 financial statements. Set
date. Financial statements to be sent to all owners.
Completion of all steps to register owners
associations by 30 September 2013.
Issue of 2013 budget to IOAB. Date.
Set up budget teams with IOABs to review
financial situation of each tower and issue an agreed 2014 budget to OABs
(not interim) before end of 2013.
Page 7: Our future engagement with you.
Note that there is no mention in these last two paragraphs about registering
the owners’ associations and working with the elected representatives of the
It should be noted that an almost identical community report was recently
issued for JBR.
Please note that these comments are not exhaustive and are based upon my
review of the BBET community report. Other owners and IOAB members may well
have additional comments on the report.
Executive Towers Update - 29 March 2010
Time for another update from the
wasteland also known as Tower B.
1. My letter to Salwan's CEO. So far this is the only reply -
Dear Mr. Robert,
Thank you for contacting Salwan Property Management.
As per your request, your e-mail has been forwarded to Mr. Saeed Bushalat
for his review and reply.
Should you require any further assistance; please do not hesitate to contact
With Best Regards,[/I]
2. The false fire alarms are now a regular feature at Tower B. Between 5 -
10 times a day and night.
3. We had a friend to visit a few days ago -first time that we have dared
let anyone else see the place. Their first observation was that - "it does
not look like a new building - it is so run down." And she was right. The
access corridors are dusty, damaged, have no ceiling. Door frames are slowly
being stained and repaired etc etc.
4. Pictures of the pool and gym are at the bottom of this link :
The pool may be no more than a
month away but can it open before the rest of the gym and changing rooms
which are months away.
5. Our snagging is more or less finished. But it has been like pulling
teeth. And contacting Salwan or Idama to get anything done is pointless. The
only way to get work done is to have the phone number of one of the Al
6. Has anyone else noticed how dusty the apartments are? Although ours is
cleaned each week after only a couple of days there is a fine dust over
everything. I assume this comes through the cooling system.
7. This morning the only working elevator around 10.30am was the freight
elevator by 01/02. And that was not stopping at the 34th floor. It took 30
minutes to get to the Ground floor. And an elevator only arrived (there were
at least 7 or us by then) because I called the Al Habtoor contractor....30
minutes wasted. No point in yelling at Salwan - as far as I can tell they
could not manage their way out of a paper bag.
8. And a question. Is anyone else disturbed by loud banging sounds - almost
sounding like something is banging into the outside of the building - seems
to affect the East side of the building the worst ? It is loud enough to
wake anyone sleeping. I have no idea what the sound is.
9. A request. Could people please use caution in the car park - and maybe
even park in designated parking spaces.
I was away last week. And had been careful to park in a designated space at
the side - away from the main traffic.
I came back to find my bonnet and grill have been badly damaged.
To the offender's credit he or she did call the police - and a green report
was left under my windscreen. But I now have no car for 2 weeks.
But after giving him or her some credit - to do that much damage he/she must
have been reversing at speed. Pathetic.
That's this week's update. There is news today that Dubai Holdings is
looking to restructure some US$20 billion of debt. No great surprise. I
guess they must have overspent at Dubai Holdings palatial HQ building.
Rarely have I seen so many people wandering around doing so little.
Executive Towers Update - 4 March 2010
I should be happy today. Idama were going
to come this morning and complete the snagging work. And Du were going to
But this is Executive Towers; and nothing
goes as planned.
Idama did not appear. Despite so many
And Du did come; and were very pleasant -
and very apologetic.
There was nothing that they could do
because the contractor has failed to instal a power socket in the equipment
box above the apartment entrance. I don't know whether i am unlucky or
whether this is a fault with the whole building.
So the contractor has to instal the power
socket; then I have to re-schedule the Du installation.
I am so effing cross.....
Executive Towers Update - 3 March 2010
There has been no progress by the
contractors since the 14 February update.
But we did get an entertaining visit from
one of the Idama managers today; it was a bizarre visit.
Yes they can move the main bathroom
toilet roll holder - but we have to pay for it. It is in the wrong place; it
is not our fault. It is the far side of the bidet; rather than between the
bidet and the toilet. All the apartments are the same said our Idama man. It
was fitted this way because of the drainage.
What is this Executive Towers disease
where people need to lie about everything.
The apartments are not all fitted like
this. Let me show you. 3402 and 3601 (both unoccupied) have the toilet roll
holder in the correct place.
There is no toilet roll holder in the
spare bedroom. Drainage he said. So why does 3402 have one?
Does anyone have a bathroom plug? I have
not seen them in any apartment.
The chipped and stained bathtub seemed to
amuse him rather be of concern. I doubt anything will be done.
The second bedroom still has almost more
paint on the floor than the ceiling; and the tiling and plaster work still
needs to be redone around where the build in wardrobes were stripped out and
One piece of good news. DU has completed
their network installation and just maybe we will have internet and tv
The car park is getting busier - which
means it is harder to find a car parking space when so many are being used
for building material storage.
Road access all but got washed away by
Executive Towers - Online Comments - 23
This is from a web forum: written by
another owner or tenant:
"Has anybody noticed how bad the
smell from the air ducts (the metal boxes in the walls - in the
lounge/bedrooms etc) is !!!
It is horrible.
At first they blamed the sewage in the bathrooms, but later we found out the
truth (from workers/engineers)... read on.
I was told by the engineers that the ET buildings were ready & sitting for
the last 2 years & during this time 'RATS' had infested the buildings (and
had been happily eating away the plastic/cables/wiring/everything etc) !!!
Al Habtoor have used rat poision & killed a majority of them - that's what
the aweful smell is !!! There are dead rats all over the building & air
ducts etc. (all the Towers).
This is REALLY BAD & unhealthy specially for children and we wonder for how
long it will continue...?!? There is nothing they can do about the smell.
To quote DP "The ET apartments come equipped with modern amenities,
high-tech facilities and internationally designed interior spaces that
embody superb architectural innovation and breathtaking views of the winding
Creek." INDEED !!!"
Executive Towers Update - 14 February 2010
We have now moved into our
building site apartment. And it is time for an update:
I have painted walls in the living room
and main bedroom and put a bit of colour in the place. And made far less
mess in the process than the contractors.
Discoveries: The bathrooms were all designed by very small people. A dwarf's
bathroom. Which makes little sense in a 1,550 square foot apartment. The
bath is so small that it does comply with Dubai's rules on conservative
behaviour. Because there is no way in the world that you could get two
people into the bath or shower.
There is a woeful lack of storage space
and the built in cupboard units were obviously designed by a man who has
only one suit and one pair of shoes....and must have been designed by a man
- a woman would have known better.
The kitchen has an opening to the
lounge/dining room but still has a kitchen door. Why ? Better to have no
door and create some space in the small kitchen.
The living room is cold.
The apartment gets a lot of dust and
dirt. Not healthy. Presumably through the ventilation from other rooms.
If the contractor says that he will be
there for 2pm today - it could mean any time or never. Three times I was
told after two pm on different days last week. Three days I sat in waiting.
No one ever appeared.
The built in wardrobes in the spare
bedroom have been finished (again) - but they have taken tiles off the
skirting board and plaster off the surrounding walls.....more work for the
working men to do - if anyone remembers old Flanders and Swann songs.
One afternoon last week this guy walks in with a jacket that says Dubai
Security - just walks into the apartment - who are you I asked - I am
security - he is clearly checking on my friendly labouring team - so I had a
go at him - telling him he had no right to simply walk in to a private
apartment...and that next time I expect the courtesy of a front door bell
and he can wait until I invite him in.
Internet/TV/Telephone - were due to be availble from Du by 28 February. As
of last week that is now 12 April 2010. But their web site still says on
schedule. Jokers! Someone has to explain to me why a building that is two
years late has not already been wired by Du.
These were apartments that were supposed
to "come equipped with modern amenities, high-tech facilities" according to
the Dubai (take your money and run) Properties.
There is only one elevator operating in
the building. Which is a real problem for removal and delivery people. But
it is leading to some fun conversations with other owners and tenants in the
elevator. No one has a good word to say about the building or DP.
The contractors proved to be highly
entrepreneurial last week. They seem to have a period of overtime that
starts at 5pm precisely.
Executive Towers Update - 23 January 2010
Dubai Properties - who I remain convinced
are the least customer friendly organisation that I have ever dealt with -
insisted that the apartment that we have bought in Executive Towers had to
be handed over and paid for in full by 6 January 2010 - or we would be found
in default - and potentially liable to lose the 70% already paid on the
Building Dreams is the Dubai Properties
tag-line. Delivering Nightmares is the reality.
Unusually they insist on payment before
they identify any snagging work that needs to be done. So here we are - we
have now owned this apartment for 16 days - we are paying DEWA and cooling
fees. The apartment is not ready to be lived in. The entire Executive Towers
complex is months, maybe years from being complete.
The snagging list was prepared on 6
January. As of yesterday no work had been done. These are a just a few of
Executive Towers - The Reality
The Dubai Properties Development named
Bay was originally due
for completion in Q1 2008.
At the end of that quarter a press release was put out by Dubai Properties
on 27 March 2008. It is, in hindsight, either shameful, embarrassing or
simply hilarious. Yet no one is held accountable. No notice was given to
purchasers concerning the delay.
March, 2008 - Dubai Properties, leading master real estate developer, today
announced the AED 3 billion Executive Towers, which are markedly visible
from Sheikh Zayed Road and Al Khail Road, is nearing completion, and the
anticipated Handover date will be during the fourth quarter of 2008.
Work is proceeding simultaneously on all 11 buildings of the
Towers, which include nine
residential units, the
Tower, and the Business
Bay Hotel. The development's outdoor component, the
Bay Avenue, is also on its
way to deliver 175,000 square feet of retail space as well as water-front
With all the units of the
Towers sold out, the
handover of all towers will commence in the fourth quarter 2008....
Al Zarooni said:
"With 5,400 on-site workers, we are delighted to inform that our ambitions
Towers will soon achieve
fruition. The towers and the lifestyle they represent are geared towards
people who celebrate success and an intelligent way of life, and we are
confident the development will set new benchmarks in the industry."
Termination and refund clauses for
failure to deliver the project within a year of the original completion date
were contained in the property sale and purchase agreements but were
worthless. As a buyer you could have tried to fight Dubai Properties in a
local court but you would have needed great patience, a good lawyer and to
afford significant legal fees.
So the only option has been to sit and wait for completion and handover of
the property. In the meantime I (and I am sure many others) have incurred
the costs of two additional years of property rental.
On 21 June 2009 Samer Zabian, the Director of Customer Service (never has a
department been so badly named) wrote to the owners to announce: " We are
delighted to announce that the completion date for the
Towers project is now
confirmed as 20 July 2009."
More fiction. This was nothing more than an attempt to bring in some cash
from the final payments. It was clear that a summer 2009 handover was
Another email (this time) on 15 November said that Tower B would be handed
over from 30 November. And the threats started – “failure to book your
handover appointment by 26th November 2009 may result in your account being
No matter that the building was already almost 2 years late.
December handover appointment was then replaced by a January appointment;
although I only knew that when I rang the customer service department to
confirm the December appointment and was told there was a further delay.
Now lets look at the handover process. How should this work; the purchaser
examines the property; prepares the snagging list (defects to be addressed
before handover) and ensures the snagging list is resolved before the final
payment is made and the property is handed over by the developer.
Not so with
Dubai Properties. They take your
money first thank you. Then you can go to the property and prepare you
snagging list. You are now paying utilities and management fees for a
property that is not yet fit to inhabit.
Incidentally Dubai Properties did not put management of
Towers out to tender.
They just appointed their subsidiary management firm - Salwan LLC. A company
that has no history of property management and that appears able to charge
whatever management fee it wishes. This appears to be around AED14.50psf -
for what??? Employing a security gurad in the car park to take my name every
time i go to see the apartment that I own.
Salwan did retain some
UK consultants to advise
on the handover process. The consultants said completion of the pool, gym,
public areas is further delayed. The pool may be ready by the end of March.
Lanscaping will not start for six months.
Some of the consultants have been retained by Salwan to manage the handover.
They are openly and honestly embarrassed to be handing over the project in
Towers is not ready to be
handed over. And it should not have been handed over in this condition.
The pool may open in by March.
The gym may open by June.
The mall area may open in six months. I suspect this is closer to the year
But remember these are Dubai Property dates so are subject to lengthy delay.
There is no landscaping. The towers currently sit on a mud and sand patch
with no proper road access.
At present there is no safe access to the building. Access to my tower,
Tower B, is available through the car park only. Only one of the three
elevator banks is working. The car park is dirty, dusty, poorly lit, full of
building materials and is base camp for the many labourers still on site. I
am sure they are delightful people but I do not think my wife should have to
walk through them if she comes home alone to the building. I do not regard
it as either safe or secure.
My car parking spot is B13. That and the surrounding spaces are currently
being used as storage space for building materials.
Then the big moment - you get to your apartment and see it for the first
The view out over the Burj Khalifa. Lovely.
Inside - I have never been more disappointed. The plasterwork, grouting and
paintwork all looks like it was completed by five year olds using playdoh.
The flooring is stone tiles; it looks like the tiles that you might use on a
There is mould/fungus on the wall of one of the bedrooms. The built in
wardrobe there is showing signs of rotting and warping.
There are panels missing. There are chips, marks, damage throughout. Door
fames are damaged. Doors are chipped. Switches and sockets are missing.
Cracks in the plaster work have been painted over. Tiling is uneven. Doors
do not fit properly etc.
The quality of the materials that have been used is very poor. The doors and
door frames are especially bad. This looks like cost cutting of the worst
The saddest part is that there appears to be absolutely no quality control
and no sense of a duty of care. Isn't this what customer service is supposed
to do. There can have been no check of my apartment to ensure that basic
fixes had been done; that obvious damage had been repaired. None of this is
rocket science. The contractor should be signing off on this apartment
before I am expected to review it.
The schedule of finishes in the sale and purchase agreement said that "All
finishes, fixtures, construction and installation will be to relevant
international and local standards." That must have been in the fiction
The Dubai Properties web site eulogises on Executive Towers : "The Executive
Towers comprise 12 towers: ten residential towers, one commercial tower
known as Aspect Tower; and one hotel called the Business Bay Hotel. The
apartments come equipped with modern amenities, high-tech facilities and
internationally designed interior spaces that embody superb architectural
innovation and breathtaking views of the winding Creek."
It makes me weep to see the reality.
Khalid Al Malik, Group CEO of Dubai Properties Group, said: "The handover of
The Executive Towers confirms Dubai Properties’ commitment to the continued
Dubai’s landscape by delivering
projects that surpass our customers’ expectations."
My expectations were pretty low already - and they could not even meet those
!! Pathetic; shameful; incompetent.
It is now three weeks from the handover date. Firstly we were told it would
take two eeks to complete the snagging work. Then we were told the work
would start on 17 January. But now three weeks after the handover and final
payment no work has been done.
have now been promised that the work will be done in the next week. I have
little confidence that this will be achieved or will be satisfactory. I
It is a shame. The people on site from Salwan and Idama do appear to care.
But the contractor is not interested and Dubai Properties management have
simply taken the money without any thought of their customers.
For those of us who have made a long term committment to working here,
investing here and living here, this project is bitterly disappointing. The
abiding and long term feeling is that the purchasers and investors have and
continue to be treated incredibly poorly. As for the so called Director of
Customer Service - he should be ashamed.
If I can find a way to post pictures of the defects to this forum i will do
Anyone who wants to compare notes or to confirm the accuracy of this
commentary is welcome to contact me.
New strata law in Dubai
15 June 2010
The process has been set in motion
to make developers relinquish their carte blanche over managing jointly
owned property in Dubai. The recently announced guidelines to the Jointly
Owned Property Law (Law No. 27 of 2007) have put the onus on developers to
establish interim owner associations (OAs) and elect an interim board for
completed property within the next six to nine months.
While the Real Estate Regulatory Agency (Rera) and the Land Department have
established a regulatory framework to manage communal real estate,
stakeholders are still seeking clarifications on numerous counts. "We think
the biggest hurdle will be to get the developer to react to the new laws,
i.e. to prepare all documentation, including surveys, leading to the
registration of the project, then convening meetings to enable the creation
of the OA and so on. Some developers seem entrenched in their manager role,
which has now become redundant," says Graham Yeates, strata expert, Cluttons
There are also concerns among some developers that entrusting building
maintenance to an OA could be to the detriment of their brands.
"The main concern of brand dilution is for developers of hotels or serviced
apartments under the jointly owned property regime," says Nima Khanpour,
commercial director at Stratum, an OA management company.
"The biggest concern is from an investment perspective. There are not going
to be many companies coming here to invest in the development of hotels if
the law doesn't allow protection of their rights."
Given that developers have a short time frame to hand over management to an
OA, Dubai's strata management companies should see a deluge of enquiries.
"Some of the developers are unaware that they are required by law to have
all this set up within a six-month period," says Gary Adamson, CEO, Stratum.
"If they don't, the owners can give a 30-day notice and in the event that
the developer still doesn't register the interim OA, then the proprietors
can take their own action to have it registered and bill the developer for
Interim OA boards
While interim OAs have a mandate to prepare members for the transition of
power, they are merely consultation committees which will help homeowners
identify their liabilities and obligations under the new regime. The
directors of interim OAs will take over once the OA is registered and the
first annual general assembly is convened. There has to be a minimum of five
and a maximum of seven members on the interim board of directors, with three
reserves. These owners have to be nominated first, then elected and no one
can hold more than one position on the board - a point that restricts the
clout of developers still holding substantial stock in a building.
"Once the OA is registered, a developer with unsold units will be rendered
as just another owner within the complex," says Gary. "The building and all
the services provided within the scope of the OA have to be maintained and
every proprietor will be allocated a unit entitlement, which is the
proportional liability to contribute towards all the expenses of the
"If they don't, they will be subject to the same law as everyone else and a
penalty will be imposed. Developers will also need to pay service charges
for units that have not been handed over."
Rera has also put a mechanism in place to recover service charges from
owners who have fallen into arrears (‘delinquents'). Although a penalty of
12 per cent per annum will be initially levied, a public auction of the
property would be the last resort.
"The feedback we are getting from developers is that the delinquency rate
could be upwards of 50 per cent," says Gary. "There are also some
developments with a delinquency rate as low as 7 per cent, where the owners
are happy with the way the developers have been running them."
Graham says the guidelines remain silent on dispute resolution. "Ideally,
there should be a specialist tribunal that would allow owners to air
grievances without the need for protracted legal wranglings that sometimes
There are provisions in the guidelines to restrict developers' ability to
enter into supply agreements on behalf of the OAs. "Any contract that has
been entered into by the developer can be cancelled at the OA's first annual
general assembly," says Gary. "A disclosure clause must now be attached to
all property sales and purchase agreements, which outlines how OAs cannot
contract with companies unlicensed in Dubai. There will also be different
licenses for facilities management companies and OA management firms
providing services in jointly owned property."
"The new laws create an owners association as a distinct legal entity.
Normally, this would override the pre-existing arrangements and the OA would
be able to call tenders for components of their required facilities rather
than accepting a blanket cover," says Graham.
Rera will, however, have the power to temporarily administer a development
to deal with breach of community rules by owners. "Initially, the developer
framed the community rules. Once the OA starts operating, it can change
those rules, depending on the specific circumstances relating to that
particular development and depending on where they sit in the scheme of
things," says Graham.
For homeowners being handed over new properties, the regulations could give
them recourse in the event that a developer provides "inadequate" facilities
or common areas in a site plan. According to Article 11 of the directives,
"The Department may refuse to register a Jointly Owned Property Declaration
if (in its opinion) the Developer has withheld areas, services or facilities
from the Site Plan or common areas site plan, or has included them within a
Unit on the Site Plan, to the extent that the Common Areas are inadequate to
cater for the reasonable needs of the Owners and Occupiers of the Unit or it
is otherwise unreasonable to have done so."
Applying the Jointly Owned Property Law to mixed-use buildings is more
"There will be provisions within the scope of the legislation to determine
the service charge levies not only on the basis of square foot, but also as
per the usage of the service area," says Nima. "For instance, the seven
different volumetric components within the Burj Khalifa can be partly
charged on the basis of their use of common facilities, such as lifts, car
parks and so on."
With the democratisation of facilities management, many in the industry
believe that service charges are likely to decrease on average across all
areas in Dubai.
Gary raises the possibility of how a building with a majority of
owner-occupiers is likely to have higher service charges than one with
"All the investors are looking to get money out of tenants and if they can
keep the cost of maintaining the building down, they will do that," he says.
"But at some stage, the building will get to a point where it no longer
generates sufficient income and they will have to put money back in to bring
it back to a certain standard."
With owners assuming control of building maintenance, service charges may be
adjusted upwards or downwards for a number of reasons. "Some of the service
contracts were negotiated two years ago. These are fairly high compared to
what is being negotiated today," says Nima, adding that variable costs -
such as a concierge, marina maintenance and so on - lead to the variance in
service fees in most buildings.
As a prerequisite to registration, every jointly owned building will need to
present plans identifying common property and individual unit boundaries to
the Land Department. The surveyor, in turn, will certify the accuracy of the
subdivision and units of entitlement compared with the original design
plans. (Units of entitlement determine which units must pay higher fees than
others. In some cases, the higher the fees, the more clout the unit owner
has in terms of contesting issues.)
For projects under construction, developers must submit drawings to the
surveying section in the Land Department. "Land surveyor registration and
methodology are fully catered to in the new regulations, but valuers are
not. In most cases, the valuer is concerned more about market values and
comparison with other properties in the area than mundane OA issues, unless
there are well-publicised faults or litigation and so on, in a particular
building," says Graham.
Meanwhile, the Land Department's surveying wing will set out rules and guide
surveyors when calculating the dimension of units and common area
In the meantime, common areas and each unit's floor area in existing
buildings will be determined by architectural and engineering plans -
something that has created confusion among those who expected all buildings
to be subjected to the upcoming surveying regulations. Kent O'Brien, CEO and
managing director of Strata Global says, "The current confusion in the
market relates to what facilities are common areas and where the measurement
of the unit title commences. The title boundaries under the new survey
regulations are measured to the centre-line of the wall adjoining common
property (including windows and balustrades) and also the centre-line of the
wall between units."
Until the time when the the Jointly Owned Property Law guidelines are
outlined in an officially published document, they are unlikely to boost in
investor confidence. "More important is the adjustment of price
expectations, which, on average, still do not meet investment criteria. More
specifically, for most investors, the current and projected yields simply do
not justify local property investment," says Jesse Downs, director of
research and advisory services, Landmark Advisory. The disclosure of OAs'
books and records to prospective buyers may help restore investor
confidence. "Prudent investors will be able to access the OA records. If
full disclosure is available, intending purchasers will be able to make
informed decisions. It is all part of the need for transparency, which can
only benefit the property market," adds Graham.
Input from the experts
"Recent clarification about the implementation of strata law shows some
progress; however, we really need to have everything outlined in an
officially published document that clarifies the implementation of the law.
Generally, progress in the clarification of the owners association laws can
help to solidify confidence. However, there are still a number of steps that
will need to be taken to significantly boost confidence and improve
"Many developers have excised many areas, such as pools and gyms... out of
the common areas of the development and added these into title property
under the developers' ownership. This has led to disputes with owners who
subsequently find they have to pay for membership to use these facilities.
Rera has stepped in and will adjudicate on the plan before approving
registration of the plan of subdivision."
Cluttons Middle East
"Australian experience has shown that a building sold as strata yields a
much higher return than a single ownership one. This applies to both
residential and commercial. The sum total of the separate strata lots will
far exceed the value of a one-owner building. There has been comment about
the difficulty of letting a commercial strata building where a tenant
requires more than one lot, such as a floor and a half. There's no reason
for strata title to impede such occupancy. Rental returns improve in such
situations as space in those buildings is taken by this expanding tenant."
Properties yet to be occupied as of April 13 will need to have their common
areas and units determined in accordance with the upcoming survey
regulations. Kent O'Brien of Strata Global believes the regulations will be
released soon. "However, surveyors are currently lodging plans according to
Land Department directives which follow the general directions relating to
surveys," he says. "At present the department has been accepting theoretical
site plans for existing projects that are complete and occupied based on
as-built plans as a transitional arrangement. These will be subject to
resurvey within a stipulated period by the owners' association and unit
plans must be surveyed at the owners expense when resale occurs."