Abu Dhabi, UAETuesday 11 August 2020

Homefront: 'Should Dubai owners still pay service charges directly to developers?'

The studio apartment owner says he understands there is a new system in the emirate

Dubai moved to position 23 from 21 last year, retaining its position as the most expensive city in the Middle East. Pawan Singh / The National
Dubai moved to position 23 from 21 last year, retaining its position as the most expensive city in the Middle East. Pawan Singh / The National

I have a studio apartment in Dubai Sports City. Every year I used to pay the annual charges to the developer. This year I am trying to contact the developer to make the payment but I am not getting any response. I recently found out there is a new system in Dubai where the payment does not go directly to the developer but instead goes to a government account. So, if the developer does not respond what should I do? And how do I make the payment for annual maintenance charges? AD, Dubai

Under a new government system called ‘Mollak’ [Arabic for ‘owners’], which came into effect late last year, developers can no longer collect any service charges on behalf of property owners. Property owners or approved property management companies acting on their behalf will assume the collection responsibility. This is the main change of the Common Properties Law No 6 of 2019, which came into effect in November 2019. The collected funds will go into service accounts of approved banks; this will allow property owners to see exactly how their money is being spent and on what.

The Real Estate Regulatory Agency, or its approved financial auditor, also has to approve any increases in service charges so developers can no longer unilaterally charge arbitrary sums without these approvals.

The law requires all fractional ownership properties in Dubai to have owners associations with approved property management companies acting on their behalf. Again, this means developers can no longer take control in setting these associations up or running them.

My advice is to find which property management company is now assuming the responsibility of collecting your building's service charge monies and then deal directly with them. Try to speak to the previous building management company or current security team. Alternatively you can find a list of management companies on the Dubai Land Department's website www.dubailand.gov.ae.

Mario Volpi is the sales and leasing manager at Engel & Volkers. He has worked in the property sector for 35 years in London and Dubai

The opinions expressed do not constitute legal advice and are provided for information only. Please send any questions to mario.volpi@engelvoelkers.com

Updated: February 26, 2020 04:55 PM

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