x Abu Dhabi, UAEThursday 20 July 2017

Dh800,000 or your aircon stays off, flat owners told

District cooling company changes collection date from end of month to start of quarter.

Jumeirah Lakes Towers in Dubai, where a building has had its air conditioning switched off because it missed new fee payment deadlines.
Jumeirah Lakes Towers in Dubai, where a building has had its air conditioning switched off because it missed new fee payment deadlines.

DUBAI //Residents in a Jumeirah Lakes Towers building had their air conditioning turned off this week after apartment owners failed to pay an unusually high bill.

The provider, Palm Utilities, began requiring in October that building owners pay a routine "capacity charge" at the start of each quarter, rather than the end of each month.

This forced building owner associations with no financial buffer to rush to collect money from fellow owners. Adding to the stress, some buildings said they did not receive notice about the new billing cycle until after it had taken effect.

The Concorde Tower owners association, like many in Dubai, had already experienced trouble in collecting the fees owed by owners.

"There's obviously not that kind of money to make that kind of advance payment, hence we've been disconnected," said a member of the association board, who asked not to be identified.

Notices urging owners to pay are being posted in the lobby and sent by email. In future, occupants of flats with overdue fees might lose access to common areas such as the car park and gym, the board member said. "Now there's an aggressive campaign to collect monies but it's going to be an ongoing battle."

All of Concorde Tower was cut off because, like many other buildings in Jumeirah Lakes Towers (JLT), it shares a single meter for district cooling, rather than individual meters for each apartment.

As a result, even owners who had paid their individual charges and tenants who owed nothing lost air conditioning in their flats.

The disconnection, which occurred on Tuesday, will continue until more than Dh800,000 in overdue fees are paid, said a notice issued yesterday by Novus Community Management, an association management company that helps the Concorde owners association and others operate.

"Unfortunately there are insufficient funds in the owners association's account to settle this debt and until a sum of Dh811,000 is available, Palm District Cooling will not reconnect the supply to the building," it said.

Palm Utilities had sent several warnings that were shared with owners.

"They've been told on a continual basis by us that we've received these disconnection notices," said Alan Rowlands, the general manager of Novus.

The company first received word about a possible disconnection in mid-November, Mr Rowlands said.

Another building in JLT received a notice about the new billing cycle dated October 3 - two days after it took effect. A third building found out about it by looking at the October bill.

"We were not given a notice," said Sanjay Thawani of SNS Property Management Solutions, which manages Al Shera Tower in JLT. "We just identified that they have taken three months of capacity charges in advance in the bill."

Owners associations had a grace period until about the middle of this month.

But even that could be a challenge to cash flow, said Edward Sanders, the chief executive of another owners association management company, Place Community Managers.

At least 60 per cent of a building's budget goes to utilities, including cooling, but getting even an 80 per cent collection rate among owners can be difficult, Mr Sanders said.

"It would help if the period of billing took more cognisance of the market conditions," he said.

Capacity charge funds go towards repaying the initial outlay for the Palm Utilities district cooling system, which includes the plants and the pipes that carry the chilled water used for air conditioning in every building in JLT.

Owners have disputed whether they should be obliged to pay the fee at all, but many relented after having air conditioning disconnected or being threatened with it.

Palm Utilities said it could not respond immediately to the issue.