Real Estate Regulatory Agency (RERA) under the authority of Dubai Land Department has launched a new “Conflict of Interest & Party Transactions” policy to regulate and settle disputes pertaining jointly owned properties in Dubai.
This policy is aimed at organising businesses related to jointly owned properties in a way that no conflict arises among owners and other parties involved. Moreover, it will also improve transparency in transactions related to the property. As per this policy, reasonable steps will be undertaken to avoid conflicting circumstances that pose a threat to compliance.
This policy also defines the responsibilities and roles of every party involved. With its implementation, conflicts can be identified and managed in an efficient way. Furthermore, it can help to avoid the exploitation of private interests among different parties such as owner committees, service providers, and management firms while organising the business.
As per the CEO of RERA, Mr Marwan bin Ghalita, this “Conflict of Interest & Party Transactions” policy will require the parties involved to disclose the existent relationship or association among them. He also maintained that decisions related to the property’s operations and other processes must be taken without any influence of any of the parties involved. The transactions as well need to be carried out as per the routine terms and conditions followed in the market.
In simple words, independent decision-making principle will be followed that is in the best interest of the jointly owned property.
Senior director of RERA at DLD, Mr Mohammed Khalifa bin Hammad is of the view that the new policy has been conceptualised and launched keeping in view the increasing number of freehold areas and projects in Dubai real estate. He also said that this policy must be applied by managers of jointly owned properties as it will ensure equality and fairness among parties involved. Moreover, transparency in records can also be maintained by implementing this policy.
As per this policy, an annual report must be prepared by the property managers depicting transactions related to the jointly-owned property. This report will then be inspected and evaluated by auditors. All the transactions will also be verified by the auditors. If the owners fail to implement this policy and abide by the regulations as instructed by RERA and DLD, they can be fined or issued financial penalties. The authorities may also terminate their contracts.