New directives issued by DTCM to offer more clarity in running these businesses
Dubai: No developer or owners association (OA) in Dubai can bar licensed holiday home operators from their buildings or communities.
This has been made explicitly clear by a new directive issued by Dubai Tourism and Commerce Marketing (DTCM) in its role as the sole licensing authority for holiday homes.
The directive also applies to facility management firms that operate on behalf of developers or owners associations in the upkeep of the buildings.
With this step, DTCM has removed much of the uncertainty that had been prevailing in the local holiday home space over developer rights and the restrictions that could be placed on businesses handling short-stays.
“Dubai citizens, thousands of (holiday home) landlords, tourist-oriented businesses, and also all foreign investors in Dubai have once again been assured that Dubai is a safe harbour with a clearly defined legal framework,” said an industry source.
“And that when needed, the Dubai authorities are efficient in resolving sudden challenges. A special prize in this case belongs to DTCM.”
What set this off
In September, Emaar issued a letter calling on all holiday home businesses to cease their activities in the Downtown — one of Dubai’s prime destinations for short-stays, especially in the period leading up to the New Year festivities.
These businesses were then given a short timeframe to comply.
Holiday home operators then took up the issue with DTCM and higher authorities, who thereupon intervened and said Emaar cannot enforce such a ban.
The latest set of directives from DTCM effectively seals the issue, removing much of the uncertainty for the industry.
“The newly, officially-published regulation concludes the current issue at Dubai Downtown, where Emaar Community Management is stopping holiday home guests unless operators sign the terms and conditions developed by ECM,” the source added.
The OA mention
There have been some instances in the recent past where owners associations have opposed the letting out of units in these buildings to short-stay guests.
The opposition had to do with the fact that these guests were using common facilities such as the pool and gym.
It also had to do with the social factor of having to deal with a high turnover of newcomers as guests, while the rest of the building had apartment owners or long-term tenants.
It’s notable that DTCM has also included OAs in its directive.
We call on developers — and owners associations — to sit with us across the table and work together for the mutual benefit of investors and visitors. The directive is a clear mandate from DTCM that holiday homes can operate in buildings and not at the fancy of developers and OAs.
– Vinayak Mahtani, CEO of bnbme
Which is why Vinayak Mahtani, CEO of bnbme, says more dialogue with all concerned parties should be the focus going forward, and not confrontations.
“We call on developers — and owners associations — to sit with us across the table and work together for the mutual benefit of investors and visitors,” he said.
“The directive is a clear mandate from DTCM that holiday homes can operate in buildings and not at the fancy of developers and OAs.”
Rise and rise of holiday homes
No other category within Dubai’s real estate market has seen the kind of growth holiday homes have experienced in recent years.
What Article 17 of DTCM directive says
In the most relevant part of the new guidelines, DTCM says: “Developers, strata property owners, management and rental services association and suppliers have to enable licensed (holiday home businesses) to practice his/her activities as per the term of the license and permit.”
Estimates suggest that there are between 8,000-12,000 “active” listings of Dubai homes offered for short stays.