Developers in the United Arab Emirates are poor at managing properties with more than 90% of real estate investors unhappy with them, according to a new survey.
The poll from Dubai market research company Real Opinions also reveals that eight out of ten believe that developers do not have the best interests of real estate owners at heart when managing their residential properties. It confirms anecdotal evidence that more and more property owners are challenging developers over issues like maintenance costs and they are forming protest groups and becoming more and more vocal.
One of the most prominent disputes has been between real estate investors in Dubai’s Discovery Gardens who threatened to take legal action against developer Nakheel in a bid to get service fee charges reduced.
In the poll more than 9 in 10 residents who own property in the UAE believed companies should be fully accountable to owners and any rules or regulations within managed residential communities should be voted upon by owners first.
‘Owners are seeking value for money and expect their fees to b e paying for the services and upkeep of their communities and not be diverted elsewhere for the benefit of developers,’ said Dan Healy, CEO of Real Opinions.
‘Property management may be perceived by some developers as a viable business model to raise revenues but owners and residents are requesting that they be at the heart of the decision making process. Media reports in the UAE have documented the challenges some developers are having managing communities they have built,’ he added.
He predicted that the days when developers could decide service and maintenance charges on their developments unilaterally appear to be coming to an end.
The internet allows property owners, some of whom live outside the UAE, to communicate with each other and form owners associations as a collective voice against the developer. ‘Unofficial owners associations are becoming much more sophisticated and organised by embracing the internet. They’re using Facebook and other social networking websites to interact with each other and to be a rallying point for owners,’ explained Healy.
The Real Opinions survey also showed that just under half of respondents said they would prefer to have the owners vote to appoint a company to manage, set fees for owners and look after the shared facilities. Just 9% preferred the developer to carry out these roles.
In terms of the contentious issue of fee levels for managed communities in the UAE, 44% thought a fee based upon square foot/area covered would be the fairest, with 20% opting for the value of the property and 16% favouring that the fees be based on the number of bedrooms.
The survey concludes that developers would be wise to communicate with owners and listen to their point of view in order to ensure they are satisfied with the management of the properties. Healy also pointed out that unsatisfied property investors who voice their grievances on the internet could put off potential future owners and amounted to bad publicity for a developer.