Article 58 Development Plans

Chapter 1 – Real Estate Development Plans

1. The developer shall register the main or subsidiary development plan of the concerned real estate after obtaining the approval of the competent entities, before selling any real estate unit off the plan, and shall deposit the original copy thereof with both the Department and Municipality.

2. A subsidiary development plan of any real estate may not be registered unless such real estate is a part of a registered main development plan, and in case of any contradiction in the data of the main and subsidiary development plans, the data of the main development plan shall be adopted unless it was amended.

3. Only one main development plan or subsidiary development plan may be registered for the same real estate.

4. The development plan may not be registered unless it has fulfilled the terms and conditions and enclosed with the documents determined by the competent entities.

5. No main or subsidiary development plan may be amended unless according to the conditions specified in the Executive Regulation.

Article 59 Division Plans

1. The developer may divide the real estate by virtue of any of the following plans:

a. Typical plan.
b. Floor plan.
c. Compound plan.
d. Volumetric plan.
e. Any other plan specified by the Department.

2. The real estate may be sub-divided and the plans may be amended by any methods or ways allowed by the Executive Regulation.

3. The Department may compel the developer to register the floor plan or the compound plan should it deem it more appropriate than the plan to be registered by the developer, in case it finds the common use of equipment, facilities, or services to be possible.

Article 60 Division pursuant to the Compound and Floor plans

The developer may divide the real estate pursuant to the compound plan or the floor plan, and he shall enclose the compound management regulation or the levels management regulation with the compound plan or the floor plan, as the case may be. The compound management regulation or the levels management regulation shall specify the conditions and obligations related to the management and use of the real estate, subject-matter of the compound plan or the floor plan. This regulation shall be binding upon each of the owner, tenant or occupant of the real estate unit subject to the regulation, and they shall all implement its terms and conditions towards each other and towards the Owners’ Union.

Article 61 Division pursuant to the Volumetric Plan

1 . The developer may volumetrically divide the building and land where the building is located pursuant to a volumetric plan. He shall enclose the building management regulation with the volumetric plan before dividing the volumetric spaces in such plan through the floor plan. Should the volumetric space be subject to the floor plan, the Owners• Union shall be considered as the owner of the volumetric plan for the purpose of applying and implementing the building management regulation.

2. The building management regulation aforesaid in Clause 1 of this Article shall specify the conditions and obligations related to the management of the building and land, subject-matter of the volumetric plan. This regulation shall be binding upon the owner, tenant or occupant of any volumetric space or real estate unit subject to the regulation, and they shall all commit to implement its terms and conditions.

Article 62 Dividing the Rights related to the Ground and Real Estate

1. Except for the original real rights. the division plan aims at dividing the property rights pertaining only to the land subject to division. and shall grant upon its registration rights that are of lower degree than the original real right. In case of termination or expiry of these rights, the division comes to an end and the borders and ownership of the land shall return to what they were before the registration of the division plan, unless otherwise agreed with the owner of the land or the nature of disposition requires that the division remains as is.

2. Upon dividing the property rights pertaining to the real estate by the floor plan or the compound plan, property rights pertaining to the real estate units resulting from such decision may be granted to another person, provided that these rights are of lower degree than the property right that has been divided, unless otherwise agreed with the owner of the original real right.

3. The owner of the original real rights shall become, upon termination of the lower-degree rights resulting from the division of the real estate, the owner of the real estate unit. The holder of the terminated rights of lower degree shall remain responsible for any amounts due on the real estate unit to the Owners’ Union upon termination of the property rights of lower degree.

Article 63 Property Rights Related to the Real Estate Unit

The holder of the property right pertaining to a real estate unit shall commit to assign, upon assignment of his property right to such unit, all his rights and obligations pertaining thereto and the assignee may not introduce any change to the nature of this property right nor may he grant or cause the emergence of new property rights related thereto except for the mortgage.

Chapter 2 – Owners’ Union

Article 64 Formation of the Owners Union

1. The owners’ union shall be established following the registration of the floor plan or the compound plan with the Department, and shall assume its competencies after its registration. The owners’ union shall consist of the developer until the latter assigns the ownership of one real estate unit or one property right or more in a floor plan or compound plan to another person, in which case the owners’ union shall consist of the total owners including the developer with respect to unsold real estate units. The membership of the owner of the real estate unit in the owners’ union shall start from the date of registering the same in his name in the Real Estate Register and forfeit upon termination of such right.

2. The owners’ union is considered a non-profit institution having a legal personality which is independent of that of its members. It shall have the right to litigate and bring cases against the owners and tenants of the real estate units as well as any person occupying the real estate unit should any of them violates any provision of this Law or the Articles of Association of the owners’ union.

3. The Articles of Association as well as the complex or levels management regulation shall apply to the owners’ union consistently with the provisions of this Law and its Executive Regulation. The Department shall lay down a form for the Articles of Association of the owners’ union and may amend it from time to time. The developer or the owners’ union may not amend it or change its clauses.

4. The owners’ union may be a member in another owners’ union of a higher rank in the same real estate development project.

5. The owners’ union shall be in charge of a Board of Directors to be elected by the owners’ union during the general assembly of the union, and the Executive Regulation shall determine the provisions related to the method of electing its members, the procedures of the general assembly, the right to vote and the legal quorum required for the validity of its resolutions. 6. The Board of Directors shall appoint the director of the owners’ union to follow up the work and the Executive Regulation shall determine the provisions related thereto.

Article 65 Common Parts

The floor plan or compound plan shall specify the common parts of the joint property and the Executive Regulation shall determine the provisions related thereto.

Article 66 Rights and Obligations related to Common Parts

1. The owners’ union shall have the right to own real estates and movables related to the floor plan and compound plan as well as stocks and shares in the service companies related to the plans which contributed to its establishment and to grant exclusive rights to common parts.

2. The ownership of the common parts shall be transferred to the owners1 union which shall be in charge of managing and operating the same. including the repair and maintenance thereof. The compound plan. the floor plan, the compound management regulation. the levels management regulation. the building management regulation and the union 1s Articles of Association shall be considered a part of the title deed of the real estate.

3. In exception to the provisions of Articles 64 and 66 of this Law. the Chairman may, following the approval of the Executive Council, issue a resolution whereby the developer or any other party shall replace the owners1 union with respect to all the rights and obligations as well as the responsibility to manage, operate, repair and maintain the common parts, public services and service facilities in the real estate development projects. provided that the owners’ union is entitled to express its opinion and advice. The Executive Regulation shall determine the terms and conditions regulating the work of the developer or the other party.

4. The Department may appoint a director to control the owners 1 union in the event of its failure or refusal to manage the common parts as specified in the Executive Regulation.

5. The owners union may not sell any common parts, real estates, or movables pertaining thereto, nor may it put any mortgage or debt burden it.

Article 67 Contribution Percentage

1. A contribution percentage shall be specified for each real estate unit whereby the owner of such real estate unit in the owners’ union shall have the following rights and obligations:

a. To have a common share in the assets of the owners’ union without acquiring any original real rights to the land which is part of the common parts.

b. The right to vote in the general assembly of the owners’ union while taking into account the exceptions indicated in the Executive Regulation or the unions’ Articles of Association.

c. To pay the specific percentage of the service fees imposed by the owners’ union.

d. To receive his share in the entitlements should the owners’ union be dissolved pursuant to the provisions of this Law.

2. The Executive Regulation shall indicate how to determine and calculate the contribution percentage and other conditions related thereto in addition to the cases where such percentage may be changed.

Article 68 Service Fees

1. The owners 1 union may collect the service fees from the owners in order to finance its activities, as per the contribution percentage of each real estate unit. The owner of each real estate unit shall pay the service fees due on him to the owners’ union on their due date, provided that the developer pays his share in the fees with respect to unsold units. The union’s Articles of Association shall determine the type of service fees, how to collect them, and the records that are related thereto and that should be kept.

2. A preferential right for the owners’ union shall automatically arise on every real estate unit upon the failure of its owner to settle the service fees or other financial obligations imposed thereon by the owners’ union. This right shall remain valid with the ownership of the real estate unit without being affected by the change of owner when the liability for settling the abovementioned fees is transferred to the new owner from the date of the ownership transfer.

3. The owners’ union shall, according to the resolution of its Board of Directors upon proceeding with the exercise of the abovementioned preferential right, notify the owner of the real estate unit by the registered mail with acknowledgment of receipt to settle the overdue service fees within three months from the date of notification. Should the owner of the real estate unit fail to pay them within the period specified in the notification, without expressing an acceptable excuse, the owners1 union may submit an application before the judge of urgent matters to issue an order to sell the real estate unit for the settlement of the due service fees according to the provisions of the Civil procedure Law.

4. The owners’ union shall pay any service fees imposed pursuant to the provisions of this Law by an owners’ union of a higher rank on or before their due date. The Department may Impose the conditions and restrictions it deems appropriate concerning the service fees and issue the regulations and instructions related to this matter.

Article 69 Compound Fees

The Department may impose the conditions and restrictions it deems appropriate with respect to the compound fees and issue the regulations and instructions related to this matter, including:

a. The condition of obtaining the approval of the Department before imposing any compound fees. b. Prohibiting the imposition of new fees or increasing the fees imposed. c. Determining the increase permitted. d. Determining the method of settlement of the payments, including the possibility to settle by installments. e. The procedures which may be taken to collect the compound fees. f. Compelling the contributors in the owners’ union to settle amounts for a credit account, to be opened with any of the banks operating in the Emirate, to cover any deficit in the collected fees.

Article 70 Insurance

1. The owners’ union shall insure the common parts or the joint property – as specified in the Executive Regulation – with an amount that covers its repair or reconstruction in the event of its perish or demolition for any reason whatsoever, and the owners’ union shall be the beneficiary of this insurance. The union shall also commit to an insurance against the damage and bodily injury that may be sustained by the owners and occupants of the real estate units during their presence on the joint property, and shall include it in the cost of the service fees due to the owners union.

2. Should the premium paid by the owners’ union be increased as a result of the manner and nature of use of a particular real estate unit by the owner or the occupant of such unit, the union may recover any increase of the premium from the owner and such increase shall be considered as a debt for which the owner or occupant shall be liable.

3. The owner of the unit may benefit from any insurance contract concluded by the owners’ union for the joint property if such insurance covers any part of its unit, and the owners’ union shall do what is necessary to enable such owner to benefit from his right under such insurance.

Article 71 Right of Support and Public Services

Chapter 3 – Rights and Obligations

1. The floor plan shall grant the right of lateral support in the case of real estate units that are horizontally adjacent and the right of subjacent support in the case of real estate units that are vertically adjacent, in favour of the real estate units and common parts against each other, and that, to the extent of availability of the capacity to ensure such lateral or subjacent support. The floor plan also grants rights in favor of the real estate units and common parts against each other in order to provide public services to the real estates or common parts, as the case may be.

2. The building management regulation applicable to the volumetric plan shall determine the easement rights and the rights of entrance, support, services and protection in favor of any volumetric space in the volumetric plan which shall abide by the conditions of such regulation.

3. Without prejudice to the original real rights, the rights granted pursuant to this Article shall be terminated automatically upon the termination of the rights of lower degree resulting from the division of the real estate.

Article 72 Modifications and Changes by the Owner

1 . Except for what is authorized by the Articles of Association of the owners 1 union and the floor or compound management regulation, the owner, tenant or occupant of the real estate unit may not introduce any modifications or changes to the structure, the external appearance or any part of the real estate unit in such a way that fundamentally affects the real estate unit or the joint property or its external appearance.

2. The owner shall, in the event of violation of the provisions of Clause 1 of this Article, repair the damage caused at his own expense and in the manner requested by the owners’ union. Should the owner of the real estate unit fail to commit to this clause, the owners 1 union may repair the damage and recover the repair costs from the owner.

Article 73 Developers Liability for Defects

1. Without prejudice to the provisions of liability stipulated in any other law, the developer shall remain liable for the repair or correction of any defects that threaten the durability and safety of the building, with respect to the structural parts of any building or the common parts in any real estate development project or any part thereof, for ten years from the date of the final certificate of completion issued by the Municipality.

2. The developer shall remain liable for the repair or replacement of the defective installations in the building for one year from the date of receiving the final certificate of completion of the building from the Municipality.

Article 74 Pre-emption

The provisions related to pre-emption shall not be applicable to common parts or the contribution percentage in the owners’ union.

Article 75 Termination of the Floor plan or Compound Plan Chapter 4 – Termination of the plans and Liquidation of the Owners Union

1. The floor plan or the compound plan may be terminated or cancelled by a resolution of the owners’ union, issued by the majority of owners holding at least 95% of the overall shares of contribution to the owners’ union, or by a decision of the competent court upon an application submitted by the owners’ union following the perish of or serious damage caused to the common parts or any building including common parts.

2. The floor plan or the compound plan shall be automatically terminated upon the termination of the rights of lower degree resulting from the division of the real estate. The Executive Regulation shall determine the procedures related to the termination of the floor plan and compound plan.

Article 76 Liquidation of the Owners’ Union

1. The owners’ union shall, upon termination of the floor plan or the compound plan, continue to hold the remaining rights on the joint property, subject-matter of said plans, until the completion of the liquidation of the owners’ union.

2. The owners’ union shall be liquidated by a decision of the competent court following the termination of the floor plan or the compound plan. The application for liquidation shall be submitted by the union itself or the last owner of a real estate unit in the relevant building. Should the owners’ union neglect or refrain from submitting the application, the Department may submit an application before the court for the liquidation of the owners’ union.

3. The court decision issued according to Clause 2 of this Article shall include the following:

a. An order of payment of all liabilities of the owners’ union.
b. How to sell the assets of the owners’ union, including the rights pertaining to real estates and movables owned by the owners’ union.
c. How to divide the proceeds of the sale of assets between the last owners of the real estate units after paying all liabilities of the owners’ union.

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