Until now, developers in Dubai were in the dock for only incommensurately levying sky-high service charges in certain developments. A recent survey initiated by law firm Hadef & Partners has disclosed that owners of freehold properties in Dubai are also made to pay duplicate registration charges, both to the Dubai Land Department (DLD) as well as the developer.
For want of strict enforcement of laws by regulators, developers have carte blanche to levy any charge on homeowners for property registration, transfers and other administrative undertakings on behalf of their properties. "Many are unaware of the duplication of costs, so they pay through habit. Others are aware, but get frustrated through a lack of knowledge of what they can do to force the developers," says Michael Lunjevich, head of real estate and commercial practice, Hadef & Partners.
The current process to register records involves the parties submitting to the DLD a no-objection certificate (NoC) from the developer, identity documents of the seller and buyer, together with the relevant registration fees. "The NoC could be to confirm that service charge payments are up-to-date," suggests Michael.
However, with the DLD yet to publish a uniform rule for costs that can be levied from purchasers, developers are charging fees as per their discretion. As per anecdotal evidence, some developers charge as little as Dh500 for an NoC while others levy Dh5,000 for providing the same document. While most owners are not comfortable with the idea of a private builder maintaining their personal records, they affirm that costs of corporate bookkeeping should be borne by the developer themselves.
The practice of paying developers registration fees may demotivate owners from registering their interests in the DLD's land registry. This, in turn, could lead to an incomplete land registry.
An investor who confronted his developer over duplication of registration fees, says, "I was very surprised to hear of registration fees being charged by the developer in addition to the DLD charges. After many months of wrangling, the DLD became involved and were very helpful. Despite the DLD attention, the developer still claimed its policy overrode; however, the DLD was firm and eventually, the developer had to back down."
The current processs to register property records is to submit to the Land Department an NoC from the developer, identity documents of the buyer and seller and the required registration fees.
From / Gulf News