Service charges in Dubai, explained for owners and buyers

What the charge pays for

Every apartment building and most villa communities in Dubai are jointly owned property: you own your unit, and all owners share the lobby, lifts, pool, gym, corridors, landscaping, security and the structure itself. Dubai Law No. 6 of 2019 defines service charges as the annual charges collected from owners to meet the cost of managing, operating, maintaining and repairing those shared parts.

The charge is set per square foot of your unit, so a larger home pays more. Buildings with more facilities cost more to run, and so do older buildings that need more repair. A reserve fund for future replacement, such as lifts and chillers, sits inside the budget.

The charge does not cover your own unit. Repairs inside the home, your DEWA account and, where there is district cooling, your unit's chiller consumption are separate costs.

What a budget contains

An approved budget is itemised, and the manager must show it to owners. The usual lines are:

• Cleaning, security and concierge staff
• Lifts, fire systems, pumps and air handling: maintenance contracts and repairs
• Pool, gym and landscaping
• Electricity and water for the shared areas
• Building insurance
• The management company's fee
• The reserve fund contribution for future replacement of major plant

Ask which lines rose in the last budget and why. A jump in insurance or a new maintenance contract explains most increases.

Who sets the amount

Each jointly owned building or community has a management entity: an owners' association, the developer, or a management company. Article 27 of Law No. 6 of 2019 forbids that entity from charging owners until the Real Estate Regulatory Agency (RERA) has approved the amount. RERA will not approve a budget that a certified audit firm has not approved first.

RERA runs this through Mollak, its system for service charge budgets, invoices and the companies that manage buildings. Owners are represented by an owners committee formed under the same law, which reviews the budget and raises concerns with the manager and with RERA.

How to check a building before you buy

1. Look up the approved rate.DLD's Service Charge Index lists the service charges RERA has approved for jointly owned properties. It is on the DLD website, through Mollak, and in the Dubai REST app. Search by the building or community name.
2. Multiply by the unit's area.The index gives a rate per square foot. Multiply by the area on the title deed to get the yearly charge for the home you are looking at.
3. Confirm the seller is paid up.A home cannot be disposed of while its service charges are unpaid. On a resale the developer's no-objection certificate confirms the dues are clear, and Form F records who pays the NOC fee.
4. Ask about the reserve fund and recent increases.A low reserve can mean a large one-off levy later. Ask the manager for the last two approved budgets.

If the seller cannot show a service charge statement, ask the manager directly before you sign Form F. The lien attaches to the unit, not to the seller, so arrears become the buyer's problem at transfer unless the NOC confirms they are clear.

Service charges and your return

The charge is an owner's cost, every year, whether the home is let or empty. Law No. 6 of 2019 defines it as a charge collected from owners, so a landlord pays it, not the tenant, unless a tenancy contract says otherwise. Take it off the rent before you judge a home's yield, and add it to your running costs alongside insurance and any management fee.

If you are comparing two homes at similar prices, the service charge can decide between them. A difference of a few dirhams per square foot on a large apartment adds up over the years you own it.

When an owner does not pay

• The management entity holds a lien over the unit, and the unit cannot be sold until the charges are paid (Article 32)
• After a written notice approved by RERA, the owner has 30 days to pay before the entity can enforce the claim through the execution judge at the Rental Dispute Settlement Centre
• The judge can order the unit sold at public auction, with the court and legal fees falling on the owner

If you believe a charge is wrong, raise it with the owners committee and through Mollak before you withhold payment. Non-payment does not pause the lien.

If you disagree with the budget

The audit and RERA approval exist to keep budgets honest, but they do not make every budget right for every owner. The owners committee is the first route. It can ask the manager for the detail behind any line, and it can take concerns to RERA through Mollak. Disputes over jointly owned property go to the Rental Dispute Settlement Centre, which has handled them since Law No. 6 of 2019.

• Ask the manager for the line-by-line budget and the audit firm's approval
• Raise it through the owners committee, which can take it to RERA through Mollak
• For a claim, file at the Rental Dispute Settlement Centre

Questions buyers ask