Dubai is a global attraction for visitors and businesses as it offers the perfect blend of a cosmopolitan city. It’s all fun if you are a tourist visiting the Emirate, but living in this opulent city is a different experience.
The process of buying property in Dubai is now much easier, thanks to the services offered by DLD (Dubai Land Department) and its regulatory arm, RERA (Real Estate Regulatory Agency). However, property buyers in Dubai must be aware of the Dubai property service charges that come as additional costs when buying one. Let’s look at what service charges on a property are and how to calculate them.
What is a Property Service Charge?
A property service charge covers the costs of management, maintenance, operation, and repair of a property. The Dubai property service charges will be collected by the property owner or by any licenced property management company approved by the owner to act on their behalf.
As per Law Number 6 of 2019 Concerning Ownership of Jointly-Owned Property in Dubai, the property owners are liable to pay the service charges. An owner’s share of the service charge is calculated based on the area of the owner’s unit to the total area of the shared property. To ease this process, DLD initiated the Mollak System; an online portal to monitor the service charges of jointly-owned properties.
Apart from the service charges on property, the property owner must set aside a ‘sinking fund’. This fund acts as a reserve fund set aside to counteract fluctuations in service charges. The sinking fund is also used for costly maintenance work, renovation, external cladding, maintenance of safety systems, air conditioning systems etc.
To Whom Are the Property Service Charges in Dubai Applied?
Service charges on property apply to every property owner in Dubai. It applies to all the different types of properties in Dubai. The service charges among properties vary because it depends on various factors, including:
- Project Type: The apartment of a building, whether it has a terrace or a balcony etc.
- Property Location: Where is the property located?
- Property Usage: The purpose for which a property is bought. It could be purchased for building a residential villa, a commercial office, a retail store, etc.
- Property Size: The total area a property covers.
How to Calculate Service Charges on Property in Dubai
The property service charges in Dubai are calculated based on per square foot. The common service charges collected from an owner usually cover the following services:
- Services
- Utility Services
- Maintenance
- Insurance
- Master Community
- Reserved Fund
- Management Services
You can calculate the service charges on a property through different channels including the Dubai REST App and the DLD website.
Calculate Service Charges on Property through DLD Website
Follow the steps detailed below to calculate the service charges on a property through DLD Website.
Calculate the Service Charges through ‘Title Deed No.’ Option:
- Open the website and select ‘Title Deed No.’ from the drop-down list.
- Enter certificate no., certificate year, property type and budget year.
- Click on Calculate and the results for service charges will be displayed.
Calculate the Service Charges through the ‘Service Charge Index’ Option:
- Open the website and select ‘Service Charge Index’ from the drop-down list.
- Enter the project name, the purpose of usage, and the year.
- Click on Calculate and the results for service charges will be displayed.
Calculate the Service Charges through the ‘Select on Map’ Option:
- Open the website and choose the ‘Select on Map’ option from the drop-down list.
- Locate the area for which you wish to find the service charges. After clicking on the desired area, the project name, its usage and the year will be displayed.
- Click on Calculate and the results for service charges will be displayed.
Calculate Service Charges on Property through Dubai REST App
Follow the steps detailed below to find out the service charges on a property through Dubai REST App.
- Open the Dubai REST App and choose the ‘Services’ option from the tab at the bottom.
- From the Services window, select ‘Service Charge Index’.
- Here you will be asked to either enter the details of the property manually or locate it on the map.
- Once the details have been entered, hit ‘Search’.
- The results of service charges applicable on the said property will be displayed.
What Happens If the Service Charges on Property Are Not Paid?
As per Article 32 of Dubai Law No. 6, if an owner fails to pay the share of service charges, the Management entity will request them, via a written notice approved by RERA, to pay the charges within 30 days.
Failure to pay the due amount in the stated time will result in a financial claim made against the owner. Where necessary, the execution judge can order a public auction of the unit owned by the defaulting owner to recover the service charges.
That is all about Service Charges on Property in Dubai and how to calculate the service charge on the property. If you are a property owner in Dubai, you must update yourself with all the additional costs of property purchasing. Whether you are selling, renting, or buying property in Dubai, you must familiarise yourself with the rules and regulations of the Dubai real estate market.
Stay tuned to the UAE’s leading property blog for information on laws and regulations pertaining to the property.
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