Property Management Agreement
THIS AGREEMENT made this day
BETWEEN:
(1) The Commonhold Property Owners Association of [ ] (hereinafter referred to as the "Association")
and
(2) [ ] (hereinafter referred to as the "Manager").
WHEREAS:
A. The Project is being constructed by the Manager for sale of the ownership interests in the individual Units in the Project
B. The Association wishes to have the Commonhold Property and all other property and assets of the Association managed by the Manager
C. The Manager has agreed to manage the Commonhold Property and all other property and assets of the Association.
It is agreed as follows :
Unless otherwise defined in this Agreement the following capitalized words shall have the following meanings:
- Association means the association formed to manage and administer those aspects of the Project and the Commonhold Property that require agreement and cooperation of the Owners as a group
- Commonhold Property means that part of the land and Project (excluding the parking structure) that does not form part of any unit of the Project and is capable of and intended for the use, enjoyment and utility of all units
- Owner(s) means an owner of a freehold interest in a unit from time to time and with respect to each unit the initial Owner shall be the Manager
- Project means the land, buildings and the parking structures and amenities buildings known as [ ]
- Rules means the rules pertaining to the Association made to govern the use and management of the Project.
1. The Association hereby delegates all of its powers and duties pursuant to the Rules to the Manager and the Manager accepts such delegation and also assumes all of the duties of the Association.
2. The Association hereby employs, retains and appoints the Manager as its sole and exclusive agent and representative to manage the Project and property and assets of the Association for a period of fifteen (15) years from the date of this Agreement and for the purpose thereof, in the name of the Association, to act on its behalf and carry out of the duties of the Manager as herein set out, and to enter into such contracts and agreements in the name of the Association as may be necessary in the proper performance of such duties.
3. The Manager agrees to carry out the duties of the Association and in that regard agrees to provide, inter alia, the following services for and on behalf of the Association:
(a) fix an annual fee to be levied against each Unit for the management, operation, repair and maintenance of the Project and the fee levied against each Unit must equal the percentage that the Commonhold Property attached to that Unit, as shown on the plan for the Project registered at the Land Department, is to the total annual fee
(b) fix an annual fee to be levied against each Unit for replacement or repair of Commonhold Property where it is expected that such replacement or repair will be necessary in the future and would under generally accepted accounting practice be considered a capital expenditure provided that the fee levied against each Unit must equal the percentage that the Commonhold Property attached to that Unit, as shown on the plan for the Project registered at the Dubai Land Department, is to the total annual fee
(c) collect all fees and other charges due to the Association from each Owner and deposit all monies received in a bank account for the Project and not commingle funds from any other source
(d) keep accurate accounts of the financial transactions arising in the management of the Project and render to the Association and the Owners yearly audited statements of income and expenditure with respect thereto and keep such accounts open for inspection by the Owners at all reasonable times
(e) prepare and submit to the Association a budget for the next Gregorian calendar year showing anticipated receipts and estimated expenses that will be incurred or required in such calendar year for repairs and maintenance and a separate budget for the capital reserve fund with a breakdown, in each case, of those expenses showing the amount of expenditure pertaining to each Unit calculated in accordance with the Rules
(f) make payments of all accounts properly incurred by the Manager in carrying out its duties
(g) keep up, repair and maintain those parts of the Commonhold Property which require upkeep, repair and maintenance such upkeep, repair and maintenance to be according to the highest standards consistent with the character of the Project and the overall development of neighboring area including, without limiting the generality of the foregoing, cleaning, painting, decorating, landscaping, garbage collection and such other maintenance and repair work as may be necessary
(h) maintain a current list of all Owners and their contact particulars including a mailing address for each Owner
(i) serve notices to all Owners of any Owner’s meeting called by the Manager
(j) attend Association meetings and act as the Chairman of such meetings setting the regulations for such meetings as may be required
(k) use reasonable diligence to assure that agreements between the Association or the Manager on behalf of the Association with suppliers of goods and services are performed in accordance with their terms and to inform the Association in the event performance is considered to be contrary to the agreed terms and intent of same
(l) make recommendations to the Association from time to time as to maintaining of Commonhold Property and property and assets of the Association
(m) advise the Association with respect to any further rules or amendments to existing Rules which in the opinion of the Manager should be established to further the harmonious and satisfactory operation of the Commonhold Property for the common benefit of the Owners
(n) enforce the Rules and for that purpose the Association hereby specifically delegates its authority to enforce the Rules to the Manager for the term of this Agreement
(o) carry on and conduct itself in a manner that complies with all laws, decrees rules and regulations for the time being in force in the United Arab Emirates
(p) cause the accounts maintained by the Manager to be audited annually by the auditor selected by the Association and deliver a copy of the audited accounts to each Owner with the notice of the annual meeting to consider accounts
(q) manage the capital reserve fund and invest surplus funds in investment grade securities offered by banks operating in Dubai or such other investment as the Association may think fit
(r) insure the Project, all units (but not the contents of any unit) and the Commonhold Property against all customary risks to the replacement value of the Project naming the Association as the main beneficiary of the insurance proceeds
4. The Manager may assign or delegate any or all of its responsibilities under this Agreement provided that any such assignment or delegation by the Manager shall not relieve the Manager of the obligation to ensure that the terms and conditions of this Agreement are honoured.
5. The Manager acknowledges that it has an interest as the developer of the Project in maintaining the entire project to a high standard and therefore it is agreeable to serving as Manager and carrying out its duties and responsibilities for a management fee equal to 15% of all expenditures (the “Management Fee”). The Management Fee charged to the Owners in any year will be based on the total of the costs of third parties providing either goods or services plus the actual cost of the Manager’s staff in administering the management services.
6. The Manager shall be entitled to withdraw from the bank account established for the Project funds from time to time required to pay expenses incurred in providing the services under this Agreement. The Manager shall not be empowered to incur any debt on behalf of the Project or the Association.
7. The Association shall:
(a) indemnify and save harmless the Manager from all liability and from all claims and demands arising out of damage or injuries to persons or property in or about or in any way connected with the Commonhold Property, and defend at the expense of the Association all suits which may be rendered against the Manager on account thereof, provided that nothing contained in this clause shall release the Manager from any liability to the Association in respect of a breach of any Manager's covenants herein contained
(b) deliver to the Manager copies of all Rules and amendments thereto made by the Association from time to time
8. All notices required or permitted to be given hereunder shall be sufficiently given:
(a) to the Association if signed by or on behalf of the Manager and delivered or mailed by prepaid post to the Association at P. O. Box 9440 Dubai, or at such other address as the Association may from time to time designate by written notice pursuant hereto
(b) to the Manager if signed by or on behalf of the Association and delivered or mailed by prepaid registered post to the Manager at P.O. Box 9440 Dubai, or at such other address as the Manager may from time to time designate by written notice pursuant hereto.
All such notices shall be deemed to have been received on the fifth business day next following the date of such mailing.
IN WITNESS WHEREOF the parties hereto have signed this Agreement as attested by the hands of their proper officers duly authorized in that behalf.
The Association The Manager
By its duly authorised officer By its duly authorised officer
