Dubai To Allow Home Insurance
Below is a MRR and PLR article in category Finance -> subcategory Real Estate.
Dubai Introduces Mandatory Home Insurance
Overview
Dubai has enacted a new law ensuring developers are liable for structural damages discovered after property handover.
Key Points
Dubai residents can now benefit from mandatory home insurance, protecting against structural damages post-handover. Previously, buyers had no legal recourse for such issues due to inadequate laws. The Real Estate Regulatory Authority (RERA) has introduced legislation making developers responsible for any post-handover damages. This law covers numerous properties, including apartments, villas, and hotel apartments.
Investors often hesitated to engage with projects due to the absence of insurance. Under the new law, developers must rectify sub-standard construction, including wall cracks within ten years of handover, and electrical or plumbing issues within the first year. Previously, such challenges were difficult to pursue legally.
The law also establishes Home Owner's Associations (HOA) for jointly owned properties. These associations will oversee the maintenance of common areas like gyms, pools, and parking, ensuring proper management of funds. Currently, only about five percent of Dubai households have home insurance, significantly fewer than in countries such as the USA, the UK, Australia, or Japan.
HOAs will handle and benefit from the insurance, with individual unit owners contributing premiums. Although Dubai has been slow to adopt this practice, the city is now committed to its successful implementation. With numerous high-end properties, the introduction of mandatory insurance is timely.
Historically, Dubai residents showed little interest in home insurance, possibly because many were short-term investors. However, RERA's new initiative is expected to increase awareness and transform the landscape of property insurance in Dubai. With its renowned commerce and opulent real estate, this new law adds significant value to the city’s property market.
You can find the original non-AI version of this article here: Dubai To Allow Home Insurance.
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