workshop & networking event march 26, 2018 jeddah, ksa...

Sponsored BY

WORKSHOP & NETWORKING EVENTMarch 26, 2018

Jeddah, KSA

OWNERS ASSOCIATION

UAE – EXPERIENCE

KRISTINA RUEHLAND Consultant, Property and Community Management

Abdul Latif Jameel Land

As developments in the GCC sector become more complex,

protecting owners properties become more critical.

April 1st 2008, UAE officially introduced the Law 27 of 2007,

concerning ownership of Jointly Owned Properties within the Emirate

of Dubai.

This law give rights to homeowners to take control of their

communities via the Owner Association.

Benefits:

• Control of community operations and costs

• Visibility of service fees collected, and utilization

• Long term value of the Life of he asset

Site PlanMCD

Board

Common Areas Units

RetailHotel Residential MarinaClub

Board

Common Areas Units

Res OAApartments

Res OAVillas

Board

Common Areas Units

Strata & Community Structure UAE

Board

Res OA

Common Areas

Retail OA

Master Level

Precinct Level

Neighborhood Level

Master OA

Owners

Association

BOARD

Constitution

Jointly Owned

Property

Declaration

Unit

Owners

Unit

Owners

Association

Manager

Single Building Strata structure

Steps to registration an

Owners Association - UAE

JOP Declarations

Survey Drawings

Preparations:

- Community Site

Plan

-Common Area

Plans

- Strata Plans

Identify OA’s name

Planning &

Registration

Complete

Application form

and pay fees

BMS for

Volumetric,

Governing

Documents &

Essential

Documents

1st Annual Meeting

Interim Board

Appoint Contractor

Appoint Committee

Appoint General

Manager

Ratify existing long

term supply and

arrangements

1st Annual General

Meeting

Elect Board

The Board of OA :• Minimum of 5 and maximum of 7 members and 3 reserve members, elected on General Assembly.• Must comply with code of conduct • Not paid• Chairman elected within the Board of OA

The OA will appoint and Association Manager to perform the duties of the OA. The Association manager will oversee the day to dayactivities, issue and collect Service Charges, manage with full transparency all the financial matters, appoint and manage serviceproviders and provide recommendations and advise to the Owners Association Board on all strategic and operational issues.

Functions of Owners Association:• Non for profit• Supervise, manage and control the common areas and the assets for the collective benefits of the homeowners and

tenants• Ensure that the community is maintained and in good condition• Prepare annual budgets, issues and collect service charges • Integrate different management and energy efficiency policies into the Associations strategy regarding the common area

and assets• Maintain, repair, renew and replace the common area and assets• Manage the security in the property• Evenly and fairly inforce the Jointly Owned Property Declaration, Including Community Rules, Architectural Codes and any

Building Management Statement in respect to the Jointly Owned Property• Promote harmony and sense of belonging• Obtain and maintain any licenses required by Law• Maintain comprehensive insurance policy• Maintain records, and produce statements and other documents as required by the constitution and comply with all the

legal requirements• Convene annual general Assemblies and Board Meeting and adhere to the decisions • Manage the capital reserve fund• Implement life cycle study

Soft Facilities Services • Cleaning ( Internal/External)• Pest Control• Waste Management• Landscaping• Lifeguards• Swimming pool cleaning and maintenance

Hard Facilities Service • MEP & Civil• Specialized Services ( fire fighting; BMS; BMU;

Access Control; CCTV and etc.)

Security Services • 24/7 Access points and security guard room management • CCTV room management• Patrolling

Utility Services• Management of utilities for common area

Management of Long and Short Term Community Requirements• Asset Management• Capital Replacements• Life cycle study • Day to Day community management • Managing Service providers • Community Improvments

24/7 Customer Contact Centre

Other Common Area Management Services• Receptionist/ Front office Services• Amenity booking• Parking management• Access Cards Management

Operational Functions of OA

Financial Management for the Community

• Annual budget preparation• Monitoring bank accounts• Monitoring day to day expenses• Cash flow management (receivables and payables)• Annual Financial Audits

• Generate, send Community Service Fee invoices• Collection of Community Service Fee and other revenues• Financial reporting• Capital Reserve fund management

Insurance Management for the Community•Common Area insurance management

•Claims management

Administrative & Secretarial Services

• Homeowners Association day to day

Management

• Annual General Assemblies

• Extra Ordinary General Assemblies

• Board Meetings

• Record Keeping

• Dispute Resolution

• General Communications and Administration to Homeowners

• Legal actions for non binding owners

• Events Management

Administrative Functions of OA

The Community Service Fee (CSF) is the Owner’s annual contribution towards his/her share of the common

expenditure of the community/ common area. The funds received from the collection of the CSF,

Late Payment Fee etc. is deposited in the CSF account as an income to the community.

The community account is an independent account and dedicated to the common area income/ expenditures

only.

The CSF rate is determined based on the estimated annual expenditure of the community, for the operation

and maintenance of the common property. It is important to note that a surplus or deficit at the end of the year

can accordingly be credited or debited to next year’s account.

The Community Service Fee consists of the following components:

• Operating budget

• Administrative budget

• Utilities

• Planned & Unplanned Provisions (Community Improvements)

• Capital Reserve Fund

• Master Community Levy

WHAT IS COMMUNITY SERVICE FEE?

Sample Community Service Charge Budget

Net Saleable Area (sqft) 720,435

No of Units: 495

Budget

2016

EXPENSES- Amount Sqft

Operating:

FM Services 4,940,818 6.86

Security Services 1,342,608 1.86

Utility Charges 2,641,254 3.67

Community Improvements 200,000 0.28

Total Operating Expenses 9,124,680 12.67

Administrative:

Administration & Insurance 272,956 0.38

Management Fees 624,979 0.87

Total Admin. Expenses 897,934 1.25

Master Community Charges 387,698 0.54

Capital Expenditures - -

Total General Fund 10,410,313 14.45

Sinking Fund 720,435 1.00

Service Charge Rate for 2016 11,130,748 15.45

Residential Building – Abu Dhabi SF 2016

Sample Community Service Charge Budget

Residential Building – Abu Dhabi SF 2016

495

720,435

1,395,897

Budget 2016 Rate / Sq. Ft.

Net Internal Area 720,435.00

MECHANICAL, ELECTRICAL & PLUMBINGM&E Maintenance Contract 349,917 0.49 M&E Repairs 500,000 0.69 Fire and Life Safety System Maintenance 209,145 0.29

CLEANINGInternal Cleaning 708,195 0.98 External Cleaning 25,482 0.04 Waste management 226,940 0.32 Pest control 104,644 0.15 External landscaping 532,648 0.74

SITE MANAGEMENTStaff Costs - Salaries 1,194,540 1.66 Site Accommodation (rent, etc.) 656,603 0.91

HEALTH SAFETY & ENVIRONMENTAL

Health and Safety Risk Assessments, Audits and Reviews 191,733 0.27 FABRIC REPAIRS & MAINTENANCEExternal Maintenance 179,212 0.25 Security Systems - Maintenance 61,760 0.09

SECURITY SERVICESSecurity Guarding Contract Cost 1,342,608 1.86

COMMUNITY IMPROVEMENTSCommunity Improvements 200,000 0.28

UTILITIESElectricity - Common Areas 403,021 0.56 Fuel - Standby Generator 21,333 0.03 Water and Sewerage Charges - Common Areas 576,000 0.80 Chilled Water - Common Areas 1,640,900 2.28

ADMINISTRATIVE & THIRD PARTY CONTRACTSMarketing 60,000 0.08 Audit Fees 27,000 0.04 Legal Fees 10,500 0.01 Bank Charges 14,409 0.02 Other Expenses - -Insurance- All Risks Cover and Third party Liab. 161,047 0.22 SMO Charges 387,698 0.54 Management Fees 624,979 0.87

Sub Total - General Fund 10,410,313 14.45

Sinking Fund 720,435 1.00

Sub Total - Capital Expenditure - -

Total Building Expenses 11,130,748 15.45

Costs and pricing sourced byOA Manager for services

Budget prepared

Surplus/deficit adjustments madefrom previous year

Budget presented to Interim Board (IB)

Comments/suggestions on the budget received from IB

Budget sent to RERA for approval

Invoices sent to Homeowners

PROCESS FOR CALCULATING CSF

Horizontal Community Vertical Community

Service Fee Budget Break Down

OA Board Challenges

- Education

- Individual bias

- Attendance for meetings and voting

- Indecisiveness

- Cost cutting mindset resulting in deteriorating assets

- Request overload

- RERA Challenges

FM Service Level Agreements

• Ensure minimum maintenance standards are maintained by the

Owners Associations

• Ensure that service providers have a minimum level of performance

• Introduction of key performance indicators for supervision

• To be used as the part of the Scope of Services for tendering for

OA services

• Ensure compliance with statutory authorities & industry standards

Each SLA category has :1) Task Name

2) Frequency of the maintenance service

3) Detailed description of the tasks required

4) Service level – What is the minimum threshold the tasks need to be

maintained

5) Measurement method – How the service level will be measured

Challenges Working with FM

Service Providers

• Reactive rather then Proactive mindset

• Constant changing of staff (feeding trained staff into new contracts)

• Overpromising, and under delivering

• Lack of route cause analysis

• Home work requests- maintain housekeeping standards

• Assets defects at handover to new incoming service provider

• Lack of senior management support for operational teams

• Operational blindness ( see issues and do not report)

• Poor reporting

• Implementation of innovation

• Implementation of energy savings initiatives

• Implementation of cost savings

My Tips On How to Win an OA FM Contract

• Remember technical scores for tenders are equally important as price

• Explain how you calculated your labor loading

• Demonstrate previous experience

• Show understanding of the RFP

• Highlight your system/processes you use to maintain operational consistency

• Evidence you are Health and Safety focused

• How do you invest in your people and their welfare

• Invest in local and international accreditations (BICS / Six Sigma/ ISO and etc.)

Thank You KRISTINA RUEHLAND

The Role of Facilities Management in the KSA Freehold Property Sector

Hazim Al-Dabbagh

Managing Partner

SureFix Facility Management

SureFix FM• Established in 2009

• Recruits FM talent who worked with FM multinational companies, providing global FM standards at local price

• Services:• B2B : Provides Integrated FM Services with

insourced MEP maintenance services

• B2C : Services to individual residential customers

• Clients

Agenda1. Owners Associations (OA) in KSA

• History of Owners Associations in KSA • OA Current System• OA Challenges

2. The Role of Facilities Management in the KSA Freehold Property Sector

History of Owner’s Associations in KSA Only 10 years ago

• Some owners do not regularly pay service fees• Service fees are not calculated properly• No sound governance process to OA• Limited to no reserve for fund contribution• OA deals with various providers rather than one

FM company• No clear SLA for service provider(s)

OA Current System

• Ministry of Housing had introduced the Mullakportal

Commercial OAs # of Units Residential OA # of Members

OA Current System• Ministry of Housing had introduced the Mullak

portal

• A standard OA’s resolution template is being provided

• FM and Service providers portal integration

• More legal enforcement is being made for owners who do not pay their service fees

OA Challenges

• Coping up with increasing utility costs (Water and Electricity)

• Understanding property risks and choosing the right insurance policy

• Optimizing service costs for common areas

Agenda

1. Owners Associations (OA) in KSA• History of Owners Associations in KSA • OA Current System• OA Challenges


FM Role on Freehold Properties

• Availability and continuity of utilities, water and sewage removal

• Firefighting system and Civil Defense permits

• Relations with tenants and to satisfy their needs

• Parking management and vehicle flow management

Thank You

- Mohammed AlDuraibiBoard of Director - MEFMA

- Hazim Al-DabbaghManaging Partner – SureFix Facility Management

- Kristina RuehlandConsultant (Property & Community Management) – Abdul Latif

Jameel Land

- Colin CaulfieldProject Director - Select FM (managed by EFS Facilities Services)