Homeowner management companies will have to issue bank guarantees linked to service charge budgets for the buildings they are handling.
Property management companies acting on behalf of homeowners associations in Dubai may need to put up bank guarantees for each project they are handling. This could be equal to 20 per cent of the annual service charge budget for that building.
Essentially, what the bank guarantee hopes to achieve is be like the escrow account developers have to maintain on all offplan projects. A guarantee put up by the OA management companies would act as a safety net in protecting the interests of property owners in that building/community.
Source – Gulf News – Read the full article here