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Strata law reveals homeowners groups short of cash

Apartment owners could face staggering bills for upkeep of property.

July 12, 2010 8:29 by

In scores of apartment buildings across Dubai, property owners have failed to pay required service fees, a fact now coming to light with Dubai’s recently enacted strata law, the National reported.

The strata law transferred responsibility for property maintenance to homeowners groups, which are now being shown to be drastically short of maintenance fee cash. The default rate on maintenance fees is reportedly as high as 75 percent in some developments, according to the paper.

Service fee arrears mean that the new homeowner groups could face big debt bills, just as they begin to assume management responsibilities from developers.

Proponents of the strata law hoped it would contribute to declines in what many considered to be excessive management fees being charged by developers at the height of the real estate boom. But the enactment of the new law has revealed that many homeowners were refusing to pay the fees they felt were either excessive or lacking in commensurate service, the National said.

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