Fees cut, but service row simmers on

A reduction in the service and maintenance fee at the Discovery Gardens residential development on the outskirts of Dubai has failed to pacify flat owners. Nakheel, the developer of the project near Ibn Battuta Mall, said in a statement yesterday that unit owners would now pay Dh5 per square foot less for the upkeep of the project. At a reported Dh29, the fee, which is calculated per square foot of a flat's floor space, was among the highest of any housing project in Dubai, resulting in annual bills of up to Dh30,000 for a one-bedroom flat. Owners today described the Dh5 reduction to Dh24 as insufficient, claiming that an annual fee of about Dh15 would be more appropriate for a project aimed at mid-income families that has few amenities compared to projects in Dubai Marina and The Palm Jumeirah. More than 20 residents gathered at Discovery Gardens last month to petition for better management of communal areas and a breakdown of Nakheel's annual service and maintenance budget. Michael Aldendorff, a flat owner in the 50,000-resident community who helped organise the gathering, said yesterday: "We can't understand for the life of us why the service fee is still so high when most of the community's facilities are still not open." Mr Aldendorff, a South African who owns a one-bedroom flat and pays Dh28,900 in annual fees, claimed that promised tennis courts and swimming pools had still not been delivered. He said about 160 residents would meet tomorrow to decide whether they would refuse to pay their service bills and whether to take legal action against Nakheel's facilities management arm over the quality of maintenance. Several owners who bought one-bedroom flats as investments to rent out said they were paying back half of their annual rental revenue, estimated at Dh60,000 at current market prices, in service fees. Nakheel said it had lowered its service budget, and therefore the annual fee for owners, after a "detailed review of scope and suppliers". It said in a statement that the new rate had been formally agreed with Rera, the Dubai property market regulator, and that the lower service charge rates would be backdated to January 1, with any rebates being credited against next year's service charges, effective from -October 1, 2009. Abdulrahman Kalantar, the managing director of Nakheel Asset Management and Design, said: "When we first set the service charges for Discovery Gardens, they were based on our best estimates for this new Nakheel community. "Following a lengthy review, we have been able to take advantage of recent reductions in the cost of goods and services, which has in turn reduced our overall service charge budgets. We're now delighted to pass on these cost savings to every homeowner at Discovery Gardens." Nakheel said service charges at all its developments, which include International City and the Palm islands, "are budgeted according to projected costs and all accounts are independently audited to ensure accuracy and transparency for homeowners". The service charges at Discovery Gardens also included all district cooling charges, which Nakheel said amounted to about Dh10 per square foot, and was used to fund the supply of air conditioning. Nakheel said minus the district cooling element, the revised service charge was about Dh14 per square foot, which the company claimed was in line with similar developments across Dubai. It added that the amount owners pay in service charges differs between buildings within the project. "Nakheel works with Rera, residents and suppliers to ensure that the charges are in line with market averages," the statement added. The fee cut at Discovery Gardens follows a similar move by Dubai Properties in April at its Jumeirah Beach Residence (JBR) development in Dubai Marina. Salwan, the property management company responsible for maintaining the communal areas of JBR, lowered the service fee to Dh15.32 a square foot, retroactive to September last year. The announcement followed a previous increase in fees from Dh9.5 to Dh21.76 a square foot. rditcham@thenational.ae