Service charges are recurring annual fees that apply to all properties in jointly owned buildings and communities. They cover a wide range of services and expenses, including:
Building Maintenance: Upkeep of common areas, elevators, and building facades.
Utilities for Common Areas: Electricity, water, and AC for lobbies, hallways, and amenities.
Security and Cleaning: Costs for 24/7 security personnel and cleaning staff.
Master Community Fees: A portion of the charges goes to the master developer for the maintenance of the wider community's infrastructure, such as parks, roads, and landscaping.
Reserve Fund: A compulsory contribution to a sinking fund for major future repairs and replacements.
The entire process of calculating, approving, and collecting these fees is strictly regulated by the Real Estate Regulatory Agency (RERA), an arm of the Dubai Land Department (DLD).
1. Verifying and Understanding Your Service Charges
Before you pay, it is essential to know exactly what you are paying for and that the charges are fair and RERA-approved.
Use the DLD's Service Charge Index: RERA provides a public, online database called the Service Charge Index. You can use the DLD website or the Dubai REST app to search for your project and view the approved per-square-foot service charges for the current year. This tool ensures full transparency and prevents overcharging.
Review the Invoice Breakdown: Your Owners Association (OA) or property management company is legally required to provide you with a detailed breakdown of the service charges. Review the invoice carefully to understand how your money is being allocated across different categories, such as maintenance, insurance, and the reserve fund.
Understand the Calculation: Service charges are calculated on a per-square-foot basis. If your property is 1,000 sq. ft. and the approved charge is AED 15 per sq. ft., your annual bill will be AED 15,000.
2. The Payment Process
Paying your service charges has become increasingly convenient with a variety of digital and in-person options.
Online Payment Portals: Most master developers and management companies have dedicated online portals where you can log in with your property reference number and pay your charges with a credit card.
Dubai REST App: The official Dubai REST app also allows property owners to pay service charges directly. The app provides a central platform to manage your property, check service charges, and settle payments securely.
Bank Transfers and Cheques: You can also pay via direct bank transfer or by submitting a cheque to the designated bank account of the Owners Association.
Service Centers: Many management companies and developers have physical customer service centers where you can pay your fees in person.
3. The Consequences of Non-Payment
Failing to pay service charges is a serious legal offense with significant consequences for property owners.
Financial Penalties: The Owners Association has the right to charge late payment penalties on any outstanding amounts.
Restriction of Services: In some cases, the management may restrict your access to certain shared amenities, such as gyms or swimming pools, until your dues are settled.
Legal Action: The most severe consequence is legal action. After a series of warning notices (typically three), the management can escalate the matter to the Rent Disputes Centre (RDC). The RDC has the authority to issue a judgment that could ultimately lead to the public auction of your property to recover the unpaid service charges.
Impact on Transactions: You will be unable to sell or rent your property if you have outstanding service charges. The DLD will not issue the No Objection Certificate (NOC) required for property transfers, and you will be unable to register a new Ejari contract.
By staying informed about the charges through RERA's index, making timely payments, and understanding the legal obligations, you can ensure that your property remains in good standing and continues to be a valuable and profitable asset.
