Service fees of freehold properties in Dubai trending lower: DLD

By Eudore R. Chand

DUBAI 27 November 2018: Dubai Land Department (DLD) said service fees for co-owned properties in Dubai’s freehold areas has seen a downward trend.

This has contributed to encouraging buyers to invest in the short- and long-term, it said.

When comparing the rate of services between 2017 and 2018, a survey conducted by Rera reveals that fees decreased in 11 areas across different regions of Dubai, reaching up to 12% in some areas, said Rera.

However, residents of Skycourt Towers in Dubailand said Rera had approved a hike of more than 25% in service fees for 2017-18 as compared to 2016-17.

Law No. 27 of 2007 on co-ownership, and the circulars issued by DLD and the Real Estate Regulatory Agency (Rera), underpin the importance of service fees. Also, Rera required service management companies to provide full disclosure of the financial statements for service fees and submit them to it for an audit prior to going to the owners and demanding payment.

Cooling Costs

Marwan bin Ghalita, CEO of Rera, stressed the need to obtain approval for the collection of service fees — available through — and the need for cooperation between owners in reducing the use of energy. This will result in a rationalisation of expenditures, significantly contributing to the reduction of service fees, especially as combined energy charges (electricity and central cooling) amount to 45–65% of the total service fees.

Service fees normally include several clauses that are calculated for a full fiscal year. These include service and maintenance charges, Dubai Electricity and Water Authority (Dewa) fees, central cooling fees, main complex fees, management fees, and backup charges. In some projects, air conditioning fees are added within the real estate unit’s service fees.

Data on Website

Rera disclosed the summary of service fee data for all co-owned properties within the ‘Service Charges’ service on DLD’s website. Rera also required all management companies’ employees to pass the required training through specialised courses offered by Dubai Real Estate Institute (DREI), the educational arm of DLD, to deal with owners and financial and maintenance issues.

Rera granted owners the right to apply for all necessary clarifications on service fees by reviewing the project’s management company and its owners’ association. If neither cooperated in this matter or failed to provide adequate responses to owners’ queries, owners may file a complaint at Rera.

If the management company prevents the owners from using facilities in communal areas, the owner has the right to file a complaint with Rera, which in turn fines the non-compliant company.

Dubai Gazette