DLD hoping lowered service fees will increase Dubai’s attractiveness
Service fees recorded a decrease of 12% in some areas
Dubai Land Department (DLD) confirmed that the lowered service fees for co-owned properties in Dubai’s freehold areas contributed to the attraction of real estate projects by encouraging buyers to invest in the short- and long-term, and those who want to buy residential units to live in.
This is due to the regulatory laws for this activity, notably Law No. 27 of 2007 on co-ownership, and the circulars issued by DLD and the Real Estate Regulatory Agency (RERA) that underpinned the importance of service fees.
RERA also required service management companies in these projects to provide full disclosure of the financial statements for service fees.
HE Marwan bin Ghalita, CEO of RERA, stressed RERA’s regulatory and supervisory role in ensuring transparency and avoiding the existence of clauses not previously known to buyers. He said: “RERA requires management companies to present all their financial statements to the owners' associations for pre-approval. Companies are also required to submit their budgets for audit by a financial audit company registered with RERA, and then submit it to RERA for an audit review so that it may be applied should the budget check out.”
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.
Bin Ghalita stressed the need to obtain RERA’s approval for the collection of service fees — available through www.mollak.ae — and the need for cooperation between owners in reducing the use of energy.
RERA requires management companies and owners’ associations to provide all financial details to a certified financial auditor registered at RERA to conduct an audit of service fees, followed by the preparation of financial reports at the end of each fiscal year.
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.