Middle East Facility Management Association

A MEFMA Publication

Initial Owner Association Manager / Facility Management Related Strategy Findings Report

CONTENTS

1. Introduction 3

2. Objectives 3

3. Methodology 3

4. Outcomes 4 -Administrative 4 -Financial 4 -Technical 4 -Physical 4 -Social 4 -DefiningOAMandFMasaworkingpartnership 4 -DefiningtheOAandOAMasaworkingrelationship 5 -Understandingandacceptinginter-dependency 5

5. Recommendations 5 -ToolsandskillsneededtoimplementOAMstrategy 5 -Mission 5 -Vision 5 -Values 5 -Goals 5 -Peopleandlearningstrategies 5 -TypicalOAMstrategies 6 -Individualskills 6 -Handoverdocumentation 6 -InvestigatingOAMroleandprocessinprocurementonbehalfofOA 6

6. Challenges 7 -JOPchallenges 7 -PracticalitiesofOAMskillset 7 -Time 7 -Law/insurance 7 -HealthandSafety 7 -Financials 7

7. The way forward 8

8. RERA Owner Association Management Services 9 License Conditions and Documentation

9. Member Bios 10

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Title:

Middle East Facility Management Association: Initial Owner Association Manager / Facility Management Related Strategy Findings Report

Introduction

Initiated by the Real Estate Regulatory Authority(RERA)asanon-profitassociation,MEFMAlobbiesto provide a standardised working framework forfacility management (FM) professionals, widerconstruction industry stakeholders and buildingowners/occupiersacrosstheMiddleEast.MEFMA works with industry professionals toimplement long term sustainable developmentstrategies.Fromdesign,buildandcommissioningthrough handover, operation, maintenance andlifecycle, the aim is to deliver a sustainable builtenvironment, best-in-class customer service andassetprotectiontomaximiseend-userROI.MEFMA focus groups are driving the formationof region specific industry standards throughresearch studies. Initial focus group findings onservice charge calculation, energy managementstrategies and technologies, handover checklists,inspectionsandreportsarenowbeingdelivered.

Objectives

In order to compile an initial findings reportto develop the required recommendationsto standardise owner association manager(OAM) licensing and association manager (AM)qualificationstodeliveroncontractualobligationsset out by owner associations (OAs), the focusgroup’smainobjectiveswereto:

• DiscusstheOAMroleandprocessesinvolved inFMserviceprocurementonbehalfoftheOA -consideringvaryingbuildingoccupancy levelsandage• Identifyrequiredduediligenceneededby

OAMsbeforetakingovertheresponsibility fromOAs• Developrequiredrecommendationto standardiseOAMlicensepre-requestand qualificationstodeliverexpectedoutcomes• OAMexpectedlimitationsandchallenges• ToolsandskillsneededtoimplementOAM strategy(Refer to Outcomes.)

Methodology

Thebodyofpractices,proceduresandrulesusedby the Owner Association Manager / FacilityManagement Related Strategy Focus Group todetermine outcomes / results; recommendations/boundaries/constraints;andthewayforwardintermsof identifying theOAMroleandprocesses,identifying due diligence and the tools and skillsneededbyOAMstoimplementOAstrategiesareoutlinedbelow.

TodefineanddeterminethepreparednessofOAsintakingresponsibilityfortheirbuildings,thegroupsurveyedanumberofOAmembers.Thenumberofrespondentswasdisappointing,butthosewhodidrespondvalidatedtheimportanceofdefiningandunderstanding theworking relationshipbetweenOAs,OAMsandFMs.

Five broad co-dependent areas were identified,around which a checklist for OAMs and OAsshould be developed. Circumstances will dictatethe situation (i.e.where in the lifecycleanOA is),butchecklistsshouldbebroadrangingenoughtoencompassasmanyscenariosaspossible.(Refer to Outcomes.)

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Outcomes

To develop a checklist for OAM companies andOAs,thegroupidentifiedfivebroadco-dependentareas(refertoMethodologies)asfollows:(RefertoObjectives,MethodologyandChallenges.)

Administrative

UnderstandingofcorrespondencesrelatedtoOAissues,eitherexternalorinternal.Inparticular:• Anyformalmeetings• Anyformalresolutions(meetingminutes)• Officialcommunications• AllRERAandLandDepartmentdocumentation pertainingtothedevelopment• Contractualobligations(ifany)Financial

• Compliance(i.e.escrowaccountandstatusfor generalandcapitalreservefund)• Lastauditbydeveloper(thesewillbecome technicalaudits)• Servicelevystatus/arrears• Fullbudget(s)andbreakdownthereof

Technical

Overview of all technical equipment pertainingto the OA (including plant operational status,manuals,positioninlifecycleetc)andallcontractualarrangementsrelatedthereto.Inparticular,physicalidentificationofavailableinformation(i.e.EDBlogbook in-situ,asset registers,plannedpreventativemaintenanceschedulesandlogs,firepanelstatus,cleanlinessofplantroomsetc)andotherindicatorsof good/poor maintenance. Determine need forpredictivechillertests.Physical

Walk-throughforidentificationpurposes,includingbutnotlimitedto:• Generalappearanceoflandscaping,paving, roads,interlock,lampstandards,railingsand thelike• Cracksinconcretesurfaces

• Glassintegrity• Integrityofexternalfaçade• Visiblesubsidenceinandaroundlandscaped areas.• Evidenceofwaterpenetrationincommon areas,carparkcalcificationetc.• Signsofpreviousfloodedroadsduetorainor highwatertable.Istheregroundwaterinthe vicinity?• Evaluationofonsitepresence(e.g.sitemanager andprovisionforsame)• Confirmationoftechnicalequipment (in-situ/contractualcorrelation)• Identificationandconfirmationofcommon areas

Social

• Evidenceofdisharmonyandordisinterest• Measurableevidenceofexistingsenseof community

Also under review: (Refer to Recommendations.)• ThetoolsandskillsneedbyOAMsto implementcommonareamanagement strategies• OAMexpectedlimitationsandchallenges• Identifyingrequiredduediligenceneed byOAMsbeforetakingoverresponsibilityfrom OA• OAMroleandprocessinserviceprocurement onbehalfofOA

Defining OAM and FM as a working partnership(Refer to The Way Forward.)

There is general concern from the FM sectorthat AMs will negatively impact their FM serviceprovision due to the perception that an AM is aperson,ratherthananentity.However,asperRealEstate Regulatory Authority (RERA) definition, theOAMisalicensedentity,notanindividual.

• Toclarify:AsperJOPLaw,servicesprovision isbyfacilitiesserviceproviderslicensedinthe EmirateofDubai(i.e.AM,security,landscaping, cleaning)

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A legally structured and defined contractualagreement between OAs and facilities serviceproviders will benefit all stakeholders, and is anindicationofasectorseekingtoimplementmaturemarketworkingpractices.

Facilities service providers and other buildingservicecontractorsarenotengagedby theOAMcompany,ratherbytheOA.However,theprocessis facilitatedby theOAMwhich is responsible forprocurementtothepointwherealternativetendersarepresentedtotheOAandputtothevote.Thechecksandbalancesinherentinthisprocessmeanthat,bydefault,theOAMwillpresentonlyqualifiedtenders.

Defining the OA and OAM as a Working Relationship

Owner associations are responsible for carryingout due diligence before they appoint an OAM.Although OAMs will be expected to have a levelofexpertiseandadheretocontractualobligationswiththeprovisionforlegalredress,withsignificantamountsofmoneyandassetsat stake, averifiedcontractawardbyOAsiscritical.

Understanding and Accepting Inter-dependency

It is understood by the focus group that the OA,OAM, FM service provider relationship is a newstructure in the Middle East, although standardpractice internationally. A clear understandingandacceptanceofbothindividualrolesandinter-dependencybyallstakeholdersiscriticalifMEFMA’sstatedobjectiveofproviding‘outstandingserviceprovision’istoberealised.

Recommendations

Tools and Skills needed to Implement OAM Strategy

Direction for association constitution 2010 states‘the association manager shall be responsible forworking with the board to develop strategies tomanage communal areas, including the creation

of a sense of community within the building orcommunity’.Thegrouprecommendsthefollowingstrategicframeworktoachievetheaforementionedstatedaims.(RefertoChallenges.)

Mission:

• Representthebestinterestsofallstakeholders• Tocontrol,maintain,manageandadminister commonproperty

Vision:

• PromotetheOAwherecommonpropertyis managedincompliancewiththelaw,inaway thatpreservespropertyvalueandcreates harmonyamongownersandoccupierswith adequateprovisionsforshortandlongterm funding

Values:

• Consultativeandresponsivetotheneedsof owners.Transparentintheadministrative process.Educateastotherightsand responsibilitiesofOAsandowners

Goals:

• JOPLaw27compliance,withinbudgetand withoutunresolveddisputesfromannual generalassemblies

People and Learning Strategies

• Boardmembersandownerstoreceivemonthly educationalandtrainingnotesregarding effectiveOAmanagement• Inadditiontominutespertainingtoservice chargenotices,communityrules,theprovision ofatransparentguideforownersand occupiersofruleenforcementprocesses andservicechargeresponsibilitiesand penalties,willbemadeavailableforcontinual stakeholdereducation• Internalprocedures:undertakeaninternal complianceauditandactionmattersrequiring attention

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Typical OAM Strategies

• Operatewithaservicechargesurplusto budgetofthegeneralfundservicechargefor thefinancialyear• Budgetthereservefundannualservicecharge in-linewithadetailedthirdpartystudyofall commonproperty,anestimateofthelifeof eachassetandthecostandfrequencyof replacement• Initiateaplannedmaintenanceprogrammeto maximisebuildingandequipmentlifeto reduceemergencyworksandbreakdowns• Proposeanenergysavingplanforcommon areasandassistwithindividualunits• Addvaluetothebuildingbywayofalterations orimprovementsofcommonareasthrough theraisingofspecialservicechargelevies• Investigateadditionalrevenuestreamsbyway ofleasingcommonareas• Organisecommunityeventstoengender friendly,harmoniousliving

Having identified typical OAM strategies, thegroupbelievesthefollowingtoolsandskillsareanecessaryindividualrequirement,recommendingthefollowing:

Individual Skills

• Goodcommunicator• Wellorganised,reliable,relationshipbuilder• Processorientated• Visionandgoalfocused• Confidenttomanage,leadandinstruct

Business Skills

• Threeyears’experienceinOAmanagement• RERAcertified• GoodConductcertificateissuedbyDubai Police• Fiduciaryduty(obligationtoactinthebest interestsofanotherparty)• Understandingbusinesscycle• Strongskillsinadministrative,technical,legal, financialandhealthandsafetypractices

Handover Documentation

DeveloperdocumentationtobehandedoveronestablishmentofOA toOAMshould include,butnotbelimitedto:

• Rollwithfullup-to-dateownerrecordsand contactdetails• Ownerfinancialpaymenthistory• Supplierandservicecontracts• Defectliabilityperiod(DLP)andwarranties• Buildingdrawings,manuals,plantand mechanicalrecordsandassetregister, conditionreports,JOPdeclaration,surveyand registeredplans• Immediatereservefundanalysis.Ifcondition/ dilapidationreportnotavailable,engage quantity(QS)withboardapproval• Preparereservefundplanoveraminimum10 years,preferablylonger• Allcorrespondenceandrecordstobearchived afterfiveyearssubjecttotherequirementsof theDirectionstoRegulations

Investigating OAM role and process in procurement on behalf of OA

Thegroupnotesageneralconcernamongsomefacilities service providers regarding workingrelationships between OAs, OAM companies andFMs.Therecommendationstomeetthischallengeareasfollows:(RefertoOutcomes.)

• Clarifyrespectiveandinter-dependentroles andresponsibilitiesofOAs,OAMsandFM serviceproviders• ClarifyextentofAMresponsibilitywithrespect totheconstitution• Highlightthenecessityoflegallybinding structuredcontracts• Importanceofbroadmanagementskillsetand techniques• Clarifysub-contracts• Developingandimplementingprocurement bestpractices

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Challenges

A major challenge for OAMs is to thoroughlyunderstand a building or community in detailbefore signing any contract. During research, itbecame apparent that several OAM companiesareprovidingmanagementproposalstoOAsanddeveloperswithoutcarryingoutasiteinspection.

Consideringthenumberofresponsibilitiesthatfallunder the OAM remit – administrative, financial,customercareandthetechnicalaspectsinherentinanOA– itwouldappearproposalshavebeenproduced under industry guidelines relating tootherjurisdictionsbasedonthegenericlegislativelyregulated components of running an OA. This isassumedtoincludethenumberandfrequencyofgeneral assemblies, board meetings and servicefeecollection,whilebuilding inacomponent forsupervision.(Refer to Recommendations and The Way Forward.)

JOP challenges

• ApprovalofbudgetsbyRERA:thegroup recommendsownersshouldmakethe decisionsattheMeetingoftheGeneral AssemblywithnoRERAinvolvement• Recommendyear-endfinancialreportsbased onanniversaryofinception• OwnersnotrequiredtoregisterDubaiaddress hinderingnotaryprocedure.Recommend mandatoryadministrationofdeveloperand ownerrecords

Practicalities of OAM Skill Set

With the responsibility now falling on OAMs fortechnical supervision (HVACR, MEP, civils, softservicesetal),supervisionisthekey.

Time

• TimeisabillableresourceforOAMs.OAsare increasinglyinitiatingmeetingsafterhoursand atweekends.OAMsmayneedtoincludea contractualagreementwherebyoutofhours

meetingsarebilledasperovertimeprincipal. WillOAsbewillingtosubsumecost?

Law / Insurance• Civilliabilityandcorporateliabilityguidelines needtobeclearlydefinedtoprotectall satkeholders

Health and Safety

• HowwillAMsensurebestpracticeisadhered tothroughoutabuilding/complex/ development?Willsafetyofficersberequired on-site?Whatisthecostimplication?

Financials

• TheneedforRERAapprovedauditors.Endof financialyearcompressesallmeetings,audits andbudgetpreparationintoatwomonth window.Thisshouldbespreadacrosstheyear. Clarificationneededonowners’contact details/jurisdictiontoenforceservicecharge payment

Licensing and Registration

• WhatcriteriawillDEDusetolicenseOAMs?

(Refer to Appendix 1: 702008 Professional License requirements.)

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The Way Forward

ThegroupinitiallystruggledwithissuesconcerningOAs,OAMsandFMserviceproviders,mostofwhichhavebeenclarified.

However,tostabilisethepropertysectorandengendermarketconfidence,thegrouprecommendsregularclear and consistent lines of communication be established between relevant issuing bodies, industryprofessionalsandend-users.

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http://www.rpdubai.com

األنشطة العقارية

كخدمات االشراف االداري لجمعيات المال

702008 :رمز النشاط مهنيه:نوع الرخصة

:وصف النشاط تخصصة في االشراف االداري على العقارات ذات الملكية يشمل المنشّات الم

المشترآة لجمعيات المالك من ناحية التعاقد مع شرآات الصيانة أو النظافة

أو الحراسة وغيرها من مزودي الخدمات لمرافق العقارات وتجهيز األمور

االشراف االداري على سجالت : االدارية المتعلقة بجمعيات المالك مثل

بالمبنى والجمعية وآذالك تقديم تقارير دورية لجمعية المالك وال الخاصة

يحق لهذه المنشّات مزاولة نشاط الوساطة في بيع العقارات وشراءها

.والوساطة في تأجير العقارات

:الشروط والمستندات

:األطـراف :جميع الجنسيات-

شهادة دورة التأهيل في ادارة جمعيات المالك الصحاب الرخصة .1

.لمديروا

.شهادة جامعية ألصحاب الرخصة والمدير.2

. سنوات للمواطن2شهادة خبرة في مجال العقارات .3

. سنوات للوافد3شهادة خبرة في مجال العقارات .4

.شهادة حسن سيرة وسلوك لجميع االطراف.5

.يجب أن تكون اقامة الوافد على نفس الرخصة.6

.اليسمح بدمج النشاط مع أنشطة أخرى.7

:مالحظات

تسجيل الرخصة والموظفين المعنيين بمزاولة النشاط في يجب •

) مؤسسة التنظيم العقاري(ادارة تنظيم العالقات العقارية

.وحصولهم على بطاقات التسجيل وذلك قبل مزاولة النشاط

Activity No: 702008 License type: Professional Nature of activity: Includes firms specialized in managing and supervising the properties that are jointly owned and run by owners associations with the responsibilities of contracting, managing and supervising the firms in charge of maintenance, cleaning, security services and other specialized service providers; as well as handling the administrative issues and the record of the building and association submitting periodical reports to the association. These firms are not allowed to practice selling or purchasing or leasing brokering.

Conditions and required documents:

Parties: - All Nationalities 1. Practitioner course for owner association

management for owner and manager. 2. Bachelor degree certificate for owner and

manager.

3. Minimum of 2 years experience in the Real

Estate industry for locals.

4. Minimum of 3 years experience in the Real

Estate industry for foreign.

5. Certificate of good conduct from CID for all

parties.

6. Foreign partner must be sponsored under this

license.

7. Other activities can't be included together.

Note: • The license & all employees permitted to

specialize in Real Estate Regulation should have RERA registration before practice their activity.

• Activity fee 10000 Dh per year.

Owner Association Management Services

سنويا10000رسوم النشاط •

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Members

Abdulhadi Ali Alalyak Du

Ahmad Hamdani Owners Association RERA

Jennifer Blackwell-Spencer Strata expert Consultant

Jeevan D’Mello Senior Director, Emaar Community Community Management Division Management

Michael Batty Head of Association Management BCS Strata

Navin Valrani CEO Al Shirawi FM

Members Bios

Abdulhadi Ali Alalyak AbdulhadiAliAlalyakiscurrentlytheVicePresidentofAssetManagementandCorporateAdministrationintheUAEEmiratesIntegratedTelecommunicationsCompany“du”.Hehasheldthispositionsince2008beingakeypersonalinthedevelopmentofthisyoungcorporation.

PrevioustothisAbdulhadiworkedforEtisalatastheChiefEngineerforIntegratedCustomerServicesandFacilitiesManagement.Hebrings15yearsofvastexperienceincludingmanagingoperationsinseveralareassuchasmanagingintegratedcustomerservices,assetsandinfrastructureprojectsrangingfromcorporateoffices,Retails,TelecommunicationsTechnicalBuildings,andDataCentres.

AbdulhadiholdsaBachelorofScienceinMechanicalengineeringfromtheGeorgeWashingtonUniversity,USA,alongwithaPostGraduateCertificatesinboththeStrategicLeadershipfromCranfieldUniversity,UK,andManagingCorporateResourcesfromIMD,Lausanne,Switzerland.

SomeotherrecognizedachievementsfromAbdulhadiincludehiscontributiontotheestablishmentoftheMiddleEastFMassociation(MEFMA)whichheiscurrentlyamemberoftheBoardofDirectors.

Ahmed Khalil Mahmoud Hamdani OfficerinchargeofOwnersAssociation,RERA

AstheofficerinchargeoftheOwnersAssociationsectionoftheRealEstateRegulatoryAuthority.AhmedKhalilhasworkedwithRERA for thepast twoyearsand togetherwithhiscolleaguesatRERA,hasbeeninstrumentalinregulatingdevelopers,owners,ownerassociationsandassociationmanagersinconnectionwiththejointlyownedpropertylawsinDubai.

AhmedKhalilhaspreviouslyworkedintheassetandpropertymanagement,financeandcustomerservicesectorsandhasapassionfortechnology.AtRERA,hehascombinedthispastknowledgeandexperienceandtodayassiststherealestatemarketbyprovidingpractical-basedsolutionstotheirrealestateproblems.

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Members Bios

Jennifer Blackwell-SpencerStrataConsultant

HoldinganMAfromtheUniversityofWarwick,UK,JenniferiscurrentlygeneralmanagerofGulfInternationalCommunityManagement,Dubai,andisalicensedrealestateagentwithRERAOwnerAssociationProfessionalManagementCertification.

She has also worked in the Australian, UK and UAE property industries. Operating in sales, leasing andproperty/assetmanagement,shealsohasover10years’experienceasanownerassociationmanagerandprincipalencompassingcommercial, residentialandmixed-usedevelopmentsexceeding3,000,000sq ft.LecturinginOwnerAssociationManagementfortheDubaiRealEstateInstitute(DREI),sheisalsopartofa teamdevelopingan internationallyaccreditedownerassociationtrainingprogrammeforDubai.Asanownerassociationindustryprofessional,JenniferisamemberoftheCommunityAssociationInstitute(CAI)andaMEFMAassociatemember.

Michael BattyHeadofAssociationManagement,BCSStrataManagementServices

With over 28 years’ experience in owners association management, Michael held the role of portfoliomanager,BCSStrataManagementServices,SydneyHeadOffice,Australia,andiscurrentlyheadofassociationmanagement,BCS,Dubai,UAE.

Hiscareerspanslandandbuildingsurveying,residentialarchitecturaldesignandfireprotectiondesigninmarine,mining,chemicalplants,powerstationandsub-stationinstallations.Heisalsoalicensedconstructionmanagerspecialisinginrefurbishment,buildingdiagnosticsandfit-outs.

Navin ValraniCEO,AlShirawiFM

HavinggraduatedwithHonours fromTheWhartonSchoolofBusinessat theUniversityofPennsylvania,Navin completed several executive education courses from institutions such as Harvard, Stanford andMichigan/AnnArbor.HeisalsoaqualifiedISO9001:2000internalauditor.

Navin joinedAlShirawiGroupinJanuary1993asexecutivedirector-partofthesecondgenerationinafamilybusinessco-foundedbyhisfather.

TheAlShirawiGroupconsistsof30companiesdividedinto8clusters,andhecurrentlyservesontheboardofall30companies.

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Members Bios

Jeevan J D’Mello Seniordirector,EmaarProperties,CommunityManagementDivision

JeevanJD’MelloGDArch,CMCA,AMS,iswidelyconsideredapioneerinthefieldofcommunitymanagementinDubai,managingfreeholdpropertysince2002.CurrentlyaseniordirectorwithEmaarProperties,headingits community management division, he was the first professional in the region to receive the CertifiedManagerofCommunityAssociations(CMCA)andAssociationManagementSpecialist(AMS)designationsbytheUS-basedCommunityAssociationsInstitute(CAI).Winnerofseveralawards,JeevanisaRERAauthorisedlecturer at the Dubai Real Estate Institute (DREI) and regularly provides training on owner associationmanagement.

Currentlymanagingfourmasterplannedcommunitiesand56ownerassociations(withaportfolioofover32,000units)inDubai,JeevanisaregularonthespeakingcircuitandwasinstrumentalinorganisingthefirstMiddleEastAssociationManagerconferenceinDubai.Besideshisworkincommunitymanagement,hehasbeen instrumental indeveloping thecompany’scorporatecrisismanagementstrategy.Heholdsmembership of the National Centre for Crisis Management and the American Academy of Experts inTraumaticStress.

For additional information, please contact;Sinead BridgettMembership and Event Director, MEFMAP.O. Box 126026 Dubai, UAEMobile: +971 50 8491447sinead@mefma.orgwww.mefma.org