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The Greens

Al Dhafrah, Al Samar, Al Thayyal, Al Ghozlan, Al Arta


and Al Alka

Community Service Fee 2010

Information Pack
INDEX

INTRODUCTION 3

ABOUT EMAAR COMMUNITY MANAGEMENT 4

WHAT IS THE COMMUNITY SERVICE FEE? 5

HOW IS THE COMMUNITY SERVICE FEE CALCULATED? 7

2010 COMMUNITY SERVICE FEE BUDGET 8

2009 COMMUNITY INCOME 9

STATUS OF THE CAPITAL RESERVE FUND 10

COMMUNITY SERVICE FEE COLLECTION STATUS 11

ACHIEVEMENTS & INITIATIVES IN 2009 12

HOW TO PAY 13

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The Greens
INTRODUCTION
Dear Owner,

2009 was a challenging year due to the global financial crisis. Despite uncertainties in the market,
Emaar Community Management (ECM) has striven to provide their valued Owners and residents
a quality service in order to ensure the Community retains its position as one of the most sought-
after freehold communities in Dubai.

Over the years, ECM has received many queries from Owners on how the Community Service Fee
(CSF) rate is determined and what services are covered under it. Therefore, going forward into
2010, ECM is working towards increasing Owner awareness about the various aspects of the CSF.
With this in mind, ECM has prepared this information pack to give Owners a better idea of how
the budget is drawn up and where the monies are being spent.

After a thorough review of both, the 2009 costs and projected costs for 2010, and subsequent
presentation to the Greens Homeowner Representative Committee (GHRC), please be informed
that the CSF rate for 2010 has been determined at AED 15.62 per sqft of saleable area.

The 2010 CSF invoice has been dispatched to Owners by regular mail. To ensure the continuity of
services to the Community, ECM requests Owners to settle their invoices by the dates mentioned
therein. If an Owner does not receive his/her invoice, he/she may please contact the Emaar
Community Service Fee Team at 800-EMAAR or email servicefees@emaar.ae.

ECM hopes that this information pack proves beneficial and looks forward to receiving valuable
feedback from Owners.

Emaar Community Management


Emaar Properties PJSC
P O Box 9440, Dubai
Phone: 800 EMAAR
Fax: +971 4 367 3750
Email: communities@emaar.ae

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ABOUT EMAAR COMMUNITY MANAGEMENT (ECM)
Emaar Community Management’s primary objective is the wellbeing of the Community and is
responsible for its day-to-day management. ECM provides comprehensive management services
including, but not limited to, technical, environmental, security, financial and administrative
functions. ECM currently manages a portfolio of five Master Communities with over 25,000
handed over units. ECM staff is trained by the US-based Community Associations Institute (CAI)
and several members are certified with the prestigious Certified Manager of Community
Associations (CMCA) certification. With over several years of experience in managing
communities, ECM is the pioneer in the UAE Community Management industry and well-placed to
manage the proposed Owners Associations.

ECM Management Services:

1. Management of Owners Associations (OA)


a. General Management
b. Administrative Services
c. Compliance with Real Estate Regulatory Agency (RERA)
d. Management of Annual General Meetings
e. Management of Board Meetings

2. Management of OA Financials
a. Annual Community Budget
b. Accounting Services
c. Community Insurance
d. Financial Reviews & Audits
e. Service Fee Invoicing & Collection

3. Technical Services
a. Facilities Management
b. Infrastructure Management
c. Contracts Management

4. Management of Community Events


a. Planning and executing Community events
b. Obtaining funding or sponsorships where possible
c. Conducting resident polls/surveys

5. Communications & Customer Service


a. Management of Community communication systems
b. Publishing of Community newsletters
c. Management of service requests & centralized mailbox

6. Management of Access Control


a. Management of Entry Permits for service providers
b. Management of promotional material and Distribution Permits

7. Enforcement of Policies & Regulations


a. Management & enforcement of Community Rules and Regulations
b. Collection of violation penalties

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The Greens
WHAT IS THE COMMUNITY SERVICE FEE?
The Community Service Fee (CSF) is the Owner’s annual contribution towards his/her share of
the common expenditure of the Community. The income received from the collection of the CSF,
Late Payment Fee etc. is deposited in the Community’s CSF account as income to the
Community.

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 will accordingly be credited or debited to next year’s
account. Owners will find more information on how the CSF rate is determined in the following
pages.

Components of the Community Service Fee

The Community Service Fee consists of the following components:


I. General Fund
II. Capital Reserve Fund
III. Special Levy
IV. Master Community Levy

I. General Fund
The General Fund consists of Operating and Administrative Expenses that are used to
maintain the Community.

I (a). Operating Expenses


The Operating Expenses, include, but are not limited to the following:
* Maintenance of common infrastructure
* Maintenance and utility costs of chillers that provide chilled water to the air-
conditioning units in the common areas as well as within apartments.
* Maintenance and utility costs of street lighting
* Maintenance and utility costs of common and shared recreational areas e.g.
pools, parks, tennis courts
* Maintenance and irrigation of common area landscaping
* Maintenance and management of Community lakes
* Maintenance and management of swimming pools and water features
* Maintenance of fire fighting equipment
* Maintenance and management of signage
* Maintenance and management of Access Control Systems
* Maintenance and management of Building Management Systems (BMS)
* Maintenance of generators
* Street and common area cleaning
* Waste collection and recycling
* Common area pest control
* Community security and control rooms
* Periodic upgrades and/or replacements of non-capital equipment and
consumables
* Swimming pool lifeguards and other monitoring and supervision personnel
* Statutory inspections and compliance requirements

I (b). Administrative Expenses


The Administrative Expenses include, but are not limited to the following:

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* Community events and awareness campaigns
* Statutory fees & permits
* Common area insurance
* Auditor fees
* Communication charges (Printing, postage SMS, email blasts etc.)
* General administrative expenses
* Legal and professional fees
* Management fees
* Bank charges

II. Capital Reserve Fund


The Capital Reserve Fund is also known as the Sinking Fund. It is used for the
replacement of capital items no longer under warranty. It is important to have a robust
Capital Reserve Fund to ensure the value of the Community is maintained well into the
future.

III. Special Levy


Special Levy is a one-off charge for items not in the design of the project or covered
under the General Fund. For 2010, a Special Levy of AED 0.19 per sqft is being charged
as the fee proposed by Dubai Land Department/RERA to register Owner Associations into
the Mollak system.

IV. Master Community Levy


A Master Community Levy is charged to each Community and other non-residential
entities like schools, clubs and retail areas within a Master Community. This charge is
then added to the Community Service Fee and will cover items such as sewage treatment
plants and maintenance of the Master Community infrastructure like roads, bridges,
underground services, storm water drains, sewage lines, pavements etc. In other words,
the Master Community Levy goes towards maintenance of areas that are not part of any
particular Community but are common to the Master Community, shared by all
communities.

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HOW IS THE COMMUNITY SERVICE FEE CALCULATED?
The Community Service Fee (CSF) budgets are proposed by the CSF Committee set up from
within Emaar’s ECM, Facilities Management (FM), Finance, Insurance, and Corporate Services
teams. The proposed Fee is then presented to the Greens Homeowner Representative Committee
(GHRC)

The budgeting process followed by the CSF Committee considers various aspects such as the
following:

Historical Expenses
The CSF Committee evaluates previous expense trends based on individual items that may have
been booked under the expense accounts. All expenses are carefully reviewed to determine the
requirement for inclusion in the following year’s budget. This allows better understanding of the
Community’s financial requirements. In addition, ECM hands-on experience on daily site
operations allows for better insight into various aspects of accurate budgeting and cost savings,
wherever applicable.

Current Market Values and Trend


Market conditions and general trade fluctuations at times affects the CSF budget. Emaar’s CSF
committee is abreast with market conditions and plans accordingly to ensure the Community’s
interests are safeguarded. In late 2008, with the change in market conditions, many existing
contracts were re-negotiated in the wake of the declining economic climate. This was possible
due to ECM’s relationship with various suppliers and contractors operating in various communities
and projects.

Resource Allocation on Site


ECM periodically reviews resources on site to find ways to better improve performance by use of
technology or other new methods of operations, based on international best practices. Through
this, better management of resources is achieved which has a substantial affect on the budget.

Service Provider Contracts


In line with the above, ECM and FM Contracts team regularly review service provider contracts.
Key areas such as performance, financials and cost savings are regularly evaluated. Periodic
evaluations are done throughout the financial year on service providers’ performance and ways
to increase efficiencies by keeping cost overheads to a minimum. These valuations are used to
determine future budgets and predict expenses.

Capital Assets Evaluation (Maintenance, Repair and Replacements)


All capital assets that are no longer under the manufacturer’s warranty are reviewed for major
maintenance or replacements. This is essential as the equipment supports the overall
infrastructure of the Community. Failure of major assets such as sewage pumping stations and/or
similar items would result in disruption of services that will lead to grave inconvenience to the
Community. Budgeting for such major assets is required to ensure the Community has sufficient
funds to use during times of emergencies and/or when replacements are required.

Energy-Saving & Environment-Friendly Initiatives


Emaar’s environmental policy has set objectives to reduce usage of water, energy and waste
generation which has been instrumental in various cost-saving methods adopted in day-to-day
Community operations.

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2010 COMMUNITY SERVICE FEE BUDGET
Total Saleable Area (In sqft) 1,904,870
No of Units: 2,378

EXPENSES Rate per sqft (In AED)


Operating:
Facilities Management1 5.61
Site Supervision Staff 0.48
Contingency/Community Improvement Fund 0.12
DEWA (Power & Water) 6.46
Effluent Water (For landscaping) 0.16
Total Operating Expenses 12.83

Administrative:
Statutory Fees & Permits 0.00
Common Area Insurance 0.15
Auditor Fees 0.02
Communication Charges 0.02
Community Events & Programs 0.02
General Administrative Expenses 0.06
Legal Fees 0.02
Management Fees 0.63
Bank Charges 0.17
Total Administrative Expenses 1.09

Total General Fund (Operating + Administrative Expenses) 13.92


Master Community Levy 0.86
Special Levy 0.19
Capital Reserve Fund (Sinking Fund) 0.28
TOTAL EXPENSES 15.25

Add Deficit carried over from 2009 0.37

CSF RATE PER SQUARE FOOT OF SALEABLE AREA FOR 2010 15.62

1
Facilities Management also includes Landscaping, Security, Soft Services, Pest Control, & Pool Management Cost.

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The Greens
2009 COMMUNITY INCOME
ECM has initiated several measures to create additional income to the Community which
enhances its value and reduces expenses. ECM is pleased to update Owners on the income
generated by the Community from January to November 2009.

Late Payment Fee


Late Payment Fee is a deterrent for Owners delaying or defaulting on their CSF payments. This
Fee is also used to offset any interest payments to be made by the Community on borrowing due
to shortage of funds. A Late Payment Fee of 2% per month is charged on the amount overdue
from the CSF invoice due date.

Entry Permit Fee


An Entry Permit Fee is levied on private contractors rendering services to the Community. The
Fee pays for the administrative effort and manpower needed to ensure that private contractors
are licensed and regulated.

Marketing & Distribution Permit Fee


The Community is quite often the target audience for many small and medium-sized businesses.
To ensure that only legitimate businesses gain access to the Community to promote their goods
and services, ECM regulates this activity with the provision of a Permit allowing the distribution of
promotional material. An administration fee of AED 500 per application is collected and booked as
an income to the Community.

Notices of Violation/Vandalism Penalties


While most residents adhere to Community Rules, there are some that do not. To ensure that the
Community is always protected, Notices of Violation are issued to Owners, (sometimes on behalf
of their tenants) to enforce Community Rules. Penalties are applied to Owners who do not
comply. Private contractors are also issued Notices of Violation if they violate any of the
Community Rules or carry out activities that contravene the terms of their Entry Permits.

Vandalism is a serious offence, and persons who vandalise Community property are penalised
and reported to the local law enforcement authorities. All the funds from such penalties form part
of the income to the Community.

Miscellaneous Income
Miscellaneous income is the income generated from other avenues such as interest earned on
Call Accounts, sale of vehicles, charges on bounced cheques and revenue from Community
Market Days.

INCOME AMOUNT (In AED)


Late Payment Fee2 437,867.00
Entry Permit Fee 600.00
Marketing & Distribution Permit Fee 19,928.00
Notices of Violation/Vandalism Penalties 13,200.00
Miscellaneous Income 421,100.00
Total Income Expected (Jan – Nov 2009) 892,695.00

2
This is the sum of all Late Payment Fee invoiced. However, this figure may vary depending on the actual amount
collected.

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STATUS OF THE CAPITAL RESERVE FUND
One of the primary functions of a Community is to maintain and preserve the value of individual
and common property. In order to do this in a proper manner, funding plans must be developed
for future repair or replacement of major common area capital equipment such as elevators,
chillers, swimming pool components and more.

Although a Community has several funding options, the best and most common method is setting
aside monies in what is called a Capital Reserve Fund (CRF) or Sinking Fund. The CRF is invested
in Fixed Deposits (FD) for terms of six months to a year. At the time of investment (and re-
investment), quotations are received from five to seven banks and the FDs are placed with the
bank offering the highest rate of interest.

The total amount of the for Al Samar, Al Dhafrah, Al Ghozlan, Al Thayyal, Al Arta and Al Alka
communities, after maturity of all FD's is AED 11,585,078.45. Details are represented in the pie
chart below.

Interest Earned
AED 1,165,385.14

Principal Am ount
Invested
AED 10,419,693.31

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The Greens
COMMUNITY SERVICE FEE COLLECTION STATUS
Payment of Community Service Fee (CSF), in full and on time, is the obligation of every Owner,
as stated in the Sales and Purchase Agreement. Without the necessary funds, the Community
may be unable to continue providing services such as common area maintenance, air-
conditioning, security, waste collection, street lighting, irrigation etc. Late payment will incur a
Late Payment Fee that is paid into the CSF account as income to the Community.

The current CSF collection status for Al Samar, Al Dhafrah, Al Ghozlan, Al Thayyal, Al Arta and Al
Alka communities is as below:

Community Service Fee Collection as on December 31 2009

100
2007 2008 2009
99.33% 98.45% 96.66%
90
2009
88.15%

80

70

60

50

In order to encourage Owners to pay their Community Service Fee, ECM has initiated several
deterrents as follows:
 Levying of a Late Payment Fee (at 2% per month of the outstanding amount)3
 Denial of services including:
- Issuance of NOC for transfer of property, visa renewal etc.
- Cessation of all non-emergency services.
 Initiation of possible Legal Action.
 The case being forwarded to a debt collection agency.4

3
All Late Payment Fee is treated as income to the Community.
4
The defaulter will be liable for the cost of the debt collection agency as well as the outstanding dues and Late Payment
Fee.

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The Greens
ACHIEVEMENTS & INITIATIVES IN 2009

ECM is committed to continuously improve the Community by delivering a quality lifestyle which
is safe and secure for residents and their families. In keeping with this commitment, besides the
normal day-to-day management of the Community, ECM has recently taken a few initiatives it is
pleased to update Owners on.

Re-negotiation of Existing Contracts


With the current global financial crisis in mind, Emaar has renegotiated all existing service
provider contracts. In the Greens, this has seen reduced costs in the Facilities Management
budget.

The Greens Landscaping


Landscaping is one of the major visual elements that enhances the value of property. ECM has
taken several initiatives to maintain the aesthetic look of the Community and has made several
improvements to the landscaping.

To enjoy economies of scale, ECM invited a joint bid for all the communities of the Greens and
Views as well as for their respective Master Communities. After extensive evaluation, the
landscaping contract for the Greens was awarded to FairGreen International Landscaping LLC.
FairGreen International Landscaping LLC took charge of the landscaping as of July 2009 and
since then, ECM has received a number of compliments from residents with regard to the
improvement in the upkeep of the landscaping in the Greens.

Electricity Consumption
ECM worked with the Community service provider to replace the lighting with energy efficient
bulbs throughout the Community, where possible,. This has brought appreciable cost savings in
the utility bills for the common areas during most months of 2009.

Rainy Weather
In preparation for the rains, Emaar’s various departments joined forces to prepare a ‘Rain Plan’
which proactively identified all areas within The Greens prone to flooding or water-logging.
Emaar’s Command & Control Centre (CCC) ensured 24 hour coverage to monitor these locations.
Tankers, pumps and other necessary resources were kept on standby and mobilized, as
necessary. As a result, The Greens experienced very few incidents of flooding due to ECM’s
proactive approach.

Additionally, ECM prepared and sent out a flyer to advise residents on suggested preventive
maintenance tips to better prepare their homes for the rains.

The Greens “Community Update’


In 2009, ECM put together and published a quarterly ‘Community Update’ to keep residents
informed about happenings in the Community. If residents have not received their copy of the
latest ‘Update’, they may please email communities@emaar.ae. We are also pleased to inform
you that the Greens ‘Community Update’ won “Silver” in the 2009 Dubai Print Awards in the
category “Digital Newsletter”.

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The Greens
HOW TO PAY
Owners may settle their Community Service Fee (CSF) invoice using any one of the following
methods:

Online Payment:
• Emaar e-Service - Use Emaar Quick Pay within Emaar e-Service to pay the CSF and other
charges via https://eservice.emaar.com
• Banks – Owners may make payments online via www.mashreqbank.com or
www.emiratesbank.ae (Account holders only).

Credit Card Payment:


Owners may pay by credit card using any one of the following:
• Online via Emaar e-Service
• Auto Debit Authorization (Form included with the CSF invoice)***
• Cashier at Emaar Properties PJSC, Emaar Business Park, Building 1, Ground
Floor.

Cash Payment:
Cash, not exceeding AED 40,000, may be paid at the Cashier located at Emaar Properties
PJSC, Emaar Business Park, Building 1, Ground Floor.

Cheque Payment:
Owners may drop their cheques into the ‘Community Service Fee Drop-Box’ located at the Emaar
Retail Centres OR mail/courier them to Credit Control, Emaar Properties PJSC, PO Box 9440,
Dubai, UAE OR to the Cashier, Emaar Properties PJSC, Emaar Business Park, Building 1,
Ground Floor .

When making payment by cheque, Owners must remember:


• To enclose the payment slip with the cheque/s.
• To make the cheque/s payable to the Bank Account Name mentioned on the CSF invoice.
• To write the Customer Property ID & Property Details on the reverse of the cheque/s.
• To allow sufficient time for the cheque/s to reach Credit Control, when mailed.

Bank Transfer:
Bank transfers may be made using the bank details mentioned on the CSF invoice. A copy of the
transfer advice must be faxed, along with the Owner’s contact details, to +971 4 3627681 OR
emailed to servicefees@emaar.ae. Payments made in foreign currency, will be converted into AE
Dirhams at the bank’s prevailing exchange rates.

Receipts:
• Receipts may be printed immediately for payments made through Emaar e-Service.
• Receipts are issued immediately for cheque and cash payments.
• Electronic receipts are emailed to the Owner within 3 working days for payments made
online via Mashreq Bank or Emirates Bank, dropped into the drop-boxes, mailed or wire-
transferred.

***Note: In line with bank and credit card company regulations, the original Auto Debit Form must be submitted in
person to the Cashier, Emaar Properties PJSC, Emaar Business Park, Building 1, Ground Floor along with a valid
identification authenticating the payer’s details. The original Form may also be sent via registered mail/courier to Credit
Control, Emaar Properties PJSC, P O Box 9440, Dubai – UAE. For any queries, please contact 800 – EMAAR (36227).

~~~~~~~~~~~~~~~~

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