Residents' anger over service charge increases
No owners association has been set up prompting fears over Strata Law
A developer in Jumeirah Lakes Towers has increased service charges by 6AED a square foot to 18AED, going against Strata Law guidelines.
The Gulf News reported the owners in the high-rise block only learned about the changes via an e-mail from the developer last month.
According to the Strata Law, tenants or their representatives through an owners association have to be involved in the decision-making and the service charges are only set after an extended and transparent auditing of the property and its needs.
"How can the developer say that this has RERA's (Real Estate Regulatory Agency) approval when no homeowners association has been set up for the building," owner, Elizabeth George told the newspaper.
“And who gave them the right to set the service charges when the Strata Law clearly requires owners associations to be the responsible entity to do it."
The Strata Law gives owners associations the right to set service charges which means there is a lack of communication between developers.
Dubai and Abu Dhabi will see a stream of properties hitting the marketplace in the coming months therefore property owners and prospective property owners need clarification on their rights in setting service charges.
For many prospective buyers the perception that service charges are too high is one of the reasons why they fail to make an investment. They do not want to be in a situation where they place their properties in the rental market and the proceeds are barely above the annual service charge payments.
Tom Bunker, Better Homes reportedly said that in most cases, buyers are looking to rent the unit out and need to know what their expected net yield will be. When the service fees are high, it does not bode well for the sale of the property.