x Abu Dhabi, UAESunday 23 July 2017

Rera's service-fee plan would work

Service-fee disputes have been a constant in Dubai's property market. A new plan could solve things, by targeting property owners instead of renters.

Draining swimming pools; cutting services to apartments; blocking access to building facilities. The measures taken by property developers in Dubai to punish tenants for the non-payment of service fees have, by and large, targeted the wrong people. The measures in most cases leave tenants in a bind while landlords - who are responsible for the payments - have escaped censure.

But things could be about to change if the Real Estate Regulatory Agency (Rera) gets its way. As The National reported yesterday, meetings with landlords, tenants, legal firms and owners' associations set for next week will hope to address the problem of unpaid service fees. If passed, new legislation would oblige property owners to reveal to potential tenants whether they had paid their service fees.

The news will be welcomed by most tenants, in particular those who have suffered in recent months because of the draconian measures taken by property developers who - it must be said - are just trying to collect money that is owed to them.

"Anything that can bring better regulation is a good thing," said a British expatriate who lives in Marina Residence on The Palm. "We are looking to move because of the issue, and it would be nice to know if the landlord we will be renting from next has paid before we sign."

A move towards more transparency is a step in the right direction. Here, at last, is a measure that could comprehensively deal with the situation, without introducing more burdensome bureaucracy. But more is needed to balance the rights of renters and the efficient functioning of the property market.

At present, to be sure, property laws heavily favour owners. While most Dubai landlords now accept four cheques for a year's rent, rather than one for the entire year, tenants still hand over a considerable sum to the owner in advance, with only a good-faith guarantee that service fees will be paid. Often owners fall into arrears, and there is little the tenant can do. Developers, too, must work to find better ways to deal with fee collections - rather than resort to collective punishment.

That policy has backfired, not least because leading property developers' reputations have been damaged. The status quo benefits no one. Rera's new proposal is a promise of better things to come.