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Home Owners/Strata Association (HOA)

A Home Owners Association (HOA) operates as a nonprofit entity and stands separate, where every unit owner in a jointly owned property holds membership. The HOA oversees the management, monitoring, and maintenance of shared areas within the property. Upon purchasing a unit, individuals in a building or community become automatic members of the HOA.

Each member is responsible for paying an “annual service charge” designed to fund the ongoing maintenance and upkeep of common areas within the building or community.

HOA Abu dhabi

HOA Abu Dhabi oversees, manages, and administers common areas on behalf of all property owners, ensuring compliance with statutory regulations, community rules, and security measures. They actively engage in facility and property management, as well as strategic fiscal planning to fulfill their responsibilities effectively.

Typically governed by a management committee or board comprising unit owners’ representatives, an HOA is led by a licensed specialist company authorized to operate within the country. Approval from statutory bodies like RERA in Dubai ensures compliance with regulations governing jointly owned properties in the UAE

HOA services

Our services include conducting statutory audits for homeowner’s associations (HOAs), ensuring compliance with local laws, regulations, and procedures. These audits, typically performed by registered auditors approved by HOA authorities, are crucial for maintaining transparency and verifying that association budgets are accurately prepared and spent in accordance with legal requirements.

HLB Abu Dhabi is a registered audit firm and approved auditor recognized by regulatory bodies such as RERA. We provide audit and advisory services tailored to Home Owners Associations (HOAs) across Abu Dhabi. Additionally, we serve as auditors for Strata associations (Body Corporates) regulated by DIFC, ensuring adherence to regulatory standards.

HLB Abu dhabi auditing services

  • Financial Statement Audit
  • In Country Value Program (ICV)
  • IFRS Advisory Services
  • Audit Assistance
  • Home Owners Association
  • MIS Reporting

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Frequently Asked Questions

What types of housing communities are managed by homeowners’ associations?

Homeowners’ associations (HOAs) manage various types of housing communities, including HOA communities, Condo Associations, Master Associations, Housing Cooperatives or “Co-Ops,” and Civic Associations.

What are the responsibilities of the Association Manager?

The Association Manager oversees three key areas: managing, monitoring, and maintaining the common areas of the property on behalf of the owners.

How often should an HOA undergo an audit?

HOAs are required to conduct statutory audits of their financial books annually and submit audited financial statements to the authorities. Typically, the financial year aligns with the calendar year for reporting purposes.

HOAs are responsible for appointing an auditor and accepting annual financial statements. They must also maintain supporting evidence of transactions as stipulated by the law.

Is the statutory audit of apartment association accounts mandatory in the UAE?

Yes, statutory audits of the accounts of Jointly Owned Properties (JOPs) registered under RERA and Body Corporates under DIFC are mandatory.

How long should the association maintain documents?

According to Clause 81 of Part 10 of the Direction for Association Constitution issued by the Dubai Land Department, all records, except minutes and copies of registered documents, should be kept for at least seven years. Minutes and copies of registered documents should be retained indefinitely.

What is an HOA?

A homeowners’ association (HOA) is an organization in subdivisions, planned communities, or condominium buildings that establishes and enforces rules for properties and residents. Property buyers within the HOA’s jurisdiction become members and are required to pay HOA fees.

What does an HOA do?

HOAs maintain common areas in jointly owned properties, manage tasks such as collecting annual maintenance fees, preparing budgets, administering financial accounts, facilitating utility bill payments, and ensuring property safety for tenants and guests through proper maintenance.

How much do service charges cost?

Service charges vary based on the property or community and the amenities available to unit holders. The annual service charges are determined based on the budget prepared at the beginning of the year.

What is a strata association?

A strata association is another term for a homeowners’ association.

What is a body corporate under DIFC?

In the DIFC jurisdiction, homeowners’ associations that register with DIFC authorities are referred to as Body Corporates.

What is Mollak?

Mollak is an integrated online system designed to regulate and monitor accounts related to service charges. It provides support services for all parties involved in Jointly Owned Properties registered under RERA, Dubai.

What is the frequency of owners committee meetings?

An Owners Committee meets regularly every three months, totaling four times a year. The first meeting is convened within thirty days of its establishment. A meeting is considered valid if attended by the majority of its members, with either the chairman or vice chairman present.

How is the service charge calculated?

The service charge is calculated based on the forecasted budget derived from tendering procedures. Each owner pays their share of the annual service charge based on the ratio of their unit’s area to the total area of the Jointly Owned Real Property.

What is a reserve fund?

A reserve fund is used for capital expenses such as major replacements of common area assets. It is a financial tool created to estimate and provide for future significant repairs and replacements of “common area” components over the long term.

What is a reserve fund study?

A reserve fund study assesses the physical condition of a property and its fixed assets. It projects costs for maintenance and replacement of capital assets over their remaining lifetimes and recommends funding levels required for smooth operation.

Do Abu Dhabi freehold properties have HOAs?

Yes, Jointly Owned Properties (JOPs) in Abu Dhabi must be registered with the Department of Municipal Affairs.

Does the HOA budget require auditing?

Yes, the HOA budget must be reviewed by an independent auditor approved by RERA.

How are expenses allocated among different components?

Expense allocation is determined through a resource allocation study, which identifies costs directly associated with maintaining shared assets and liabilities among components. It also determines how budget line items are shared among components.

No, Jointly Owned Properties (JOPs) do not have legal registration as they are not legal entities registered under the Department of Economic Development (DED).

Can an HOA open a bank account?

Yes, an HOA can open a designated Escrow account.

What accounting standard applies to HOAs?

Generally, HOAs follow the IFRS for SMEs accounting standard for preparing financial statements, although some associations may adhere to full IFR

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Thomas Koshy

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