MAG 218 Agreement For Sale (Schedule B)

Agreement For Sale (Schedule A)

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CONSTITUTION OF THE MAG 218 TOWER ASSOCIATION
(Dubai Marina)
Whereas, Muafak Ahmed Al Kadah is developing that piece of land within Dubai Marina, Dubai, UAE having Plot No. A23B by constructing thereon a building for residential and commercial purposes;

Whereas, from the date on which any person other than such developer becomes an owner of property in such building, an association will be deemed to be formed pursuant to Article 1197(1) of Federal Law No. 5 of 1985 (as amended) in respect of Civil Transactions for the UAE, of which all the owners in such building, their heirs, successors-in-title and permitted successors or assigns shall be members.

Now, therefore, this document shall henceforth serve as the constitution of such association.

In this document:

Building

means the building and its associated facilities known as the MAG 218 Tower to be constructed on the Plot together with the Plot where the context requires;

Building Association

means the association under these rules to manage and administer those aspects of the Building and the Common-hold Property that require agreement and cooperation of the Owners as a group;

Constitution

means the document with any Schedules hereto, as may be amended from time to time;

Common-hold Property

means that part of the Building and Project that does not form part of any unit in the Building or the Project and is capable of and intended for the use, enjoyment and utility of all units;

Developer

means Muafak Ahmed Al Kadah, the developer of the Building, or any other person or entity that may assume responsibility for the development and/or management of the Building;

Building Manager

means the manager of the Building Association appointed by the Building Association from time to time;

Management Agreement

means a management agreement to be agreed and entered into between the Building Manager and the Building Association, whereby the Building Association will appoint Asteco Property Management as the first Building Manager for a period of one (1) year calculated from the date of the formation of the Building Association;

Owner

means either an owner of a freehold interest or an owner of a leasehold interest in a Unit. The initial Owner of all Units is the Developer;

Plot

means Plot No. A23B located in Dubai Marina, Dubai, UAE;

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Project

means the land and the six (6) multi-unit residential towers, parking structure and amenities building in the Dubai Marina project known as Phase 1 of District 1 located in Dubai Marina, Dubai, UAE;

Rules

means the Rules of the association of all the owners in the Project, as in effect from time to time;

Unit

means an individual numbered unit designated as such on the plan for the Building registered at the Land Department in Dubai and includes the Common-hold Property and the parking space(s) designated to that Unit as shown on the said plan.

1.  Membership in the Building Association and Term

1.1

Each Owner shall become a member of the Building Association upon the registration of his interest in the Unit at the Land Department in Dubai.

1.2

No person other than an Owner may become a member of the Building Association.

1.3

In the case of joint Owners the first named party on the title deed shall be considered for the purposes of this Constitution to be the sole Owner.

1.4

No Owner may resign or otherwise relinquish his membership in the Building Association.

1.5

The Building Association shall come into existence when the first Unit in the Building is sold or leased and shall continue in existence for an unlimited period.

2.  Office of the Building Association

The Building Association shall have its main office in the Building and shall provide the Building Manager office space in the Building without charge from which to administer the affairs of the Building Association.

3.  Powers of the Building Association

3.1

The Building Association has the power to:

(a) enter in binding agreements through its Building Manager;

(b) fix an annual fee to be levied against each Unit for the management, repair and maintenance of the Common-hold Property provided that the fee levied against each Unit must equal the percentage that the Common-hold Property attached to that Unit, as shown on the plan for the Building registered at the Land Department, is to the total fee;

(c) fix an annual fee to be levied against each Unit for the replacement or repair of Common-hold 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 Common-hold Property attached to the Unit, as shown on the plan for the Building registered at the Land Department, is to the total fee;

(d) make rules to govern its members and deal with all matters of membership;

(e) determine the terms of payment of all fees with respect to Common-hold Property and charge interest on payments in arrears;

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(f) appoint a Building Manager of the Building Association to manage the day to day affairs of the Building Association or enter into management agreements with companies for this purpose;

(g) appoint the auditor for the Building Association;

(h) take proceedings in the name of the Building Association in the Courts of Dubai against any Owner that is in default in payments due the Building Association or is otherwise in breach of this Constitution or any regulations made pursuant thereto and seek remedies to enforce payment or remedy the breach including but not limited to the forced sale of the Owner's Unit; and

(i) enter into the Management Agreement on behalf of the Building Association.

3.2

The Building Association may delegate any or all of its powers as it may from time to time see fit.

4.  Duties of the Building Association

4.1

The Building Association has the duty to:

(a) appoint a Building Manager to manage the Building and administer its day to day affairs;

(b) maintain and manage the Common-hold Property for the general benefit of all Owners;

(c) ensure that each Owner will enjoy peaceful possession and quiet enjoyment of his Unit and the Common-hold Property in accordance with this Constitution and the regulations made pursuant thereto.

(d) enforce this Constitution and the regulations made pursuant thereto and the relevant provisions of the Rules and any regulations that apply to the Project as a whole;

(e) insure the Building, all Units (but not the contents of any Unit) and the Common-hold Property against all customary risks to the replacement value of the Building naming the Association as the main beneficiary of the insurance proceeds;

(f) file this Constitution and all amendments thereto and all minutes of Building Association meetings at the Land Department in Dubai, if required by applicable law; and

(g) have regard to and comply with the provisions of the Rules in carrying out its obligations pursuant to this Constitution.

5.  Building Associaton Meetings

5.1

The Building Manager shall once a year, not later than ninety (90) days following the receipt of the auditor's report on the Building Association's accounts, convene a meeting for all Owners for the purpose of:

(a) appointing or re-appointing a Building Manager if there is no Management Agreement then in force;

(b) receiving for approval the accounts of the Building Association;

(c) receiving a report from the Building Manager on the previous year's operations;

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(d) appointing auditors for the Building Association; and

(e) such other business as may properly be brought before the meeting.

5.2

Each Owner shall be givein fifteen (15) days written notice of the meeting by post to the address for mailing given to the Building Association by the Owner.

5.3

The notice shall state the place, date and time of the meeting and the nature of any speical business to be brought before the meeting and be accompanied by the audited accounts for the preceding fiscal year if this is a meeting to consider the accounts.

5.4

A quorum for a meeting shall be two Owners or individuals representing an Owner by proxy, and a representative of the Building Manager must be in attendance. If no quorum is present within 30 minutes of the time for the meeting to begin the meeting shall proceed with the Owners or their proxies and the Building Manager's representative then present.

5.5

The Building Manager shall set the rules for the meeting as are required subject to the requirements that all matters must be decided by a majority vote of the Owners present at the meeting unless otherwise stated in the Constitution.

5.6

On all votes at a meeting each Owner shall have that number of votes that corresponds to the percentage interest that Owner has in the Common-hold Property.

6.  Duties of Owners

6.1

Each Owner shall:

(a) permit the Building Manager, at all resonable times and on reasonable notice (except in cases of emergency) to enter into his Unit for the purpose of inspecting, maintaining and repairing Common-hold Property;

(b) pay the Building Association all fees, rates, taxes and premiums that may become payable in respect of his Unit;

(c) maintain his Unit in a state of good repair;

(d) notify the Building Association immediately if there is a change of Owners with respect of his Unit or if a mortgage has been registered against his Unit;

(e) ensure that all occupants of his Unit comply with this Constitution and the regulations made pursuant thereto;

(f) at all times comply with the laws, decrees rules and regulations of the Emirates of Dubai and the United Arab Emirates from time enforce that relate to the Project or his Unit and procure that all occupants of his Unit also comply;

(g) comply with all reasonable notices and instructions from the Building Manager with respect to his use and occupation of his Unit and Project.

7.  Restrictions on Owners

7.1

No Owner shall:

(a) make structural, mechanical or electrical alterations to his Unit or to the Commonhold Property without consent of the Building Manager;

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(b) enter into any lease, sublease or allow occupancy of his Unit for a period of less than twelve (12) consecutive months by persons that are not immediate family of Owner;

(c) expose laundry to the public view by hanging it on balconies, out windows or by any other means;

(d) allow in his Unit any animal, reptile or bird that is not customarily reared inside a building and considered generally as a house pet and all pets must be carried or on a leash when outside a unit;

(e) permit explosives, hazardous chemicals or firearms to be stored in any Unit, in any part of the Project, in its annexes or beside the Project;

(f) store any of his personal property in any of the Common-hold Property including the entrance to his Unit;

(g) erect any sign or billboard on any part of the Common-hold Property without the consent of the Building Manager;

(h) park vehicles in other than designated parking spaces that are attached to his Unit;

(i) allow his Unit to fall into disrepair, become infected with insects or in any way become a health hazard to the Project;

(j) create a nuisance;

(k) use the Common-hold Property for any personal use such as dusting carpets, cleaning furniture or displaying plants and flowers unless permitted by the Building Manager;

(l) use or permit his children or guests to use the parking structure for any purpose other than parking vehicles; or

(m) make any change (including a color change) to the external appearance of the Project or its doors and windows.

8.  Rights of Owners

8.1

The Owners may convene a meeting of all Owners at any time by lodging with the Building Manager a request for a meeting stating the business for the meeting, which may include a proposal to terminate the Building Manager, subject to the terms of any Management Agreement then in force, which request shall be accompanied by a signed petition of the Owners representing twenty five (25%) percent of all Units.

8.2

Any Owner has the right require that the Building Manager enforce this Constitution and the regulations made pursuant thereto and if the Building Manager does not take enforcement action on its own after being requested by an Owner, an Owner may take proceedings in the Courts of Dubai and seek relief against the Building Association and/or any Owner that is in breach of this Constitution or such regulations.

8.3

The Owners may amend this Constitution by the affirmative vote of seventy five percent (75%) of the Owners voting on the proposal except that an amendment to alter the percentages of Common-hold Property attaching to the Units requires the unanimous vote of all Owners and the aggregate percentage of all Common-hold Property must at all times equal one hundred percent (100%).

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8.4

The Owners may make regulations that are supplementary, but not contradictory, to this Constitution with respect to matters that in the Building Association's opinion require regulation for the betterment of all Owners collectively.

9.  Duties of Building Manager

9.1

The Building Manager shall:

(a) collect all fees and other charges due to the Building Association from each Owner and third parties and deposit all monies received in a bank account for the Building Association and not commingle funds from any other source;

(b) keep accurate accounts of the financial transactions arising in the management of the Common-hold Property and render to the Building Association yearly statements of income and expenditure with respect thereto and keep such accounts open for inspection by any Owner at all reasonable times;

(c) prepare and submit to the Building Association on or before the 1st day of December of each year 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 expenditrue pertaining to each Unit calculated in accordance with this Constitution;

(d) make payments of all accounts properly incurred by the Building Manager in carrying out its duties;

(e) keep up, repair and maintain those parts of the Common-hold Property which require upkeep, repair and maintenance such as upkeep, repair and maintenance to be according to the highest standards consistent with the character of the Project and the overall development of Dubai Marina including, without limiting the generality of the foregoing, cleaning, decorating, landscaping, garbage collection and such other annual maintenance and repair work as may be necessary;

(f) maintain a current list of all Owners and their contact particulars including a mailing address for each Owner;

(g) serve notices to all Owners of any meeting called by the Building Manager or the Owners;

(h) attend Building Association meetings;

(i) use reasonable dilligence to assure that agreements between the Building Association or the Building manager on behalf of the Building Association with suppliers of goods and services are performed in accordance with their terms and to inform the Building Association in the event performance is considered to be contrary to the agreed terms and intent of same;

(j) make recommendations to the Building Association from time to tome as to maintaining Common-hold Property and property and assets of the Building Association;

(k) advise the Building Association with respect to any further rules or amendments to this Constiution which in the opinion of the Building Manager should be establisehd to further the harmonious and staisfactory operation of the Common-hold Property for the common benefit of the Owners;

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(l) enforce this Constitution and for that purpose the Building Association hereby specifically delegates its authority to enforce this Constituion to the Building Manager including the right to represent the Building Association in the Courts of Dubai;

(m) carry on and conduct itself in a manner that complies with all laws, decrees, rules and regulations in the UAE for the time being in force;

(n) cause the accounts maintained by the Building 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 of the Building Association;

(o) manage the capital reserve fund and invest surplus funds to investment grade securities offered by banks operating in Dubai;

(p) insure the Project, all Units (but not the contents of any Unit) and the Common-hold Poperty against all customary risks to the replacement value of the Project naming the Building Association as the main beneficiary of the insurance proceeds;

(q) file the minutes of each meeting of the Building Association at the Land Department in Dubai;

(r) hear and settle complaints of the Owners in a fair and equitable manner consistent with this Constitution and the regulations made pursuant thereto; and

(s) implement resolutions of the Building Association passed at duly convened meetings of the Building Association.

10.  Accounts and Financial Year

10.1

The financial year of the Building Association shall be from January 1 to December 31 and the first financial year shall be for a period commencing on a date as determined appropriate by the Building Manager and ending on December 31 of that year.

10.2

Accounts for the Building Association shall be audited each financial year by the auditors of the Building Association chosen by the Owners at their annual meeting.

10.3

Each Owner, or a qualified accountant of his choice, shall have the right to inspect the accounts of the Building Association on reasonable notice and at reasonable times.

Agreement For Sale (Schedule C)