Dubai buyers may eventually decide to relax, as they can now afford to buy insured property against any building damage. Buyers have often been left unattended until today whenever damage to a building occurs after a property is delivered. They could not claim any legal proceedings or compensation for lack of proper laws. However, the Real Estate Regulatory Authority (RERA) has finally decided to change the situation, and introduced a new law that makes developers liable for damages that may occur after redevelopment. Consumers will be free to speak to the regulatory board whenever there appears to be a breach of the law. Many Dubai apartments, furnished villas, hotels and hotel flats in Dubai will be subject to the terms of this new law.
Investors used to withdraw from projects before, citing a lack of insurance as a reason. Under the new law, however, the developer will be held accountable in the courts for any substandard construction. For example, any serious wall cracks that occur during the first ten years of the supply chain, could be a compensation offense. Additionally, any interruptions related to electricity, machinery or plumbing may be challenged in the first year. Any irregularities in the construction of Dubai houses, hotels, villas with furniture or Dubai hotel flats have not been challenged in the courts before, as there was no clear framework to do so.
In addition, the law adds more clarity to the issue of property maintenance. Under the new directive, a Home Owners Association (HOA) will be established in each co-operative area and will request that it look after common areas, such as gymnasiums, swimming pools, parking lots, entrances etc. They will have to participate in watch-dogs and see that the consumer's money is spent wisely. Surprisingly, only 5 percent of Dubai households have home insurance, which is a very small number compared to what we might see in countries like the USA, UK, Australia or Japan.
The composition of the HOA is a key ingredient in this whole process. He or she will be required to maintain and be the beneficiary of the insurance in each case, while the members of the organization, each with a single unit ownership, will be required to pay a premium. Dubai may be late for the project, but it is expected to follow it closely now, and consumers and promoters should get used to it now. The city needed to have it anyway, with many of Dubai's luxury apartments, hotels, furnished villagers and Dubai hotel flats packed to the top.
Although, insurance coverage is a basic requirement of any real estate buyer, the people of Dubai have not shown any interest in the past, possibly, as most of them could be temporary buyers. However, the introduction of the new RERA law will fundamentally change this situation, one is optimistic, and awareness of local insurance will grow significantly. Dubai is best known for its successful trade, such as its glossy shopping malls, which include luxury hotels, supermarkets, Dubai flats, villas and Dubai hotel flats. The new property law developed by RERA will add more value to its real estate.
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