Dubai's new service charge rules lead to bills spike for some and drop for others

New rules governing the community service charges Dubai homeowners pay have seen some residents hit with bills for more than Dh1,500. The system used to calculate the size of a property changed this week, Dubai Land Department said. The revamp relates to how balconies and terraces are measured and included in a property's size. In a pilot run in several communities some owners paid higher charges more while many saw a drop. Service charges generally cover maintenance, upkeep of communal areas and in some places air conditioning. They are paid by owners or landlords and not renting tenants. Indian businessman Harsh Nahar, 41, found his apartment in The Greens was remeasured from 750 square feet to 1,050 square feet to include his ground floor terrace. He received an email from Dubai Land Department 10 days ago explaining the changes followed by a bill from Emaar for Dh1,576 extra for this year. That was on top of the Dh14,200 he already paid for 2018. "Emaar said the land department had recalculated the size of the property and I had to pay the new charges," he told The National . “The outdoor area is closed off and there is nothing there except a light. “There is nothing connecting it to any community area that may incur additional charges.” Other Greens owners received the same bills. “We have the same problem, Dh600 added to each quarterly bill,” one owner wrote in a Facebook community group. “This is in addition to the annual fee which I have paid. “I’m not sure why this fee is to be paid, and for what service.” Many other owners benefitted from the changes, seemingly paying less when their homes were remeasured. Sean Corroon, a programmer for a government department, has a two bedroom apartment in The Views. His service charges fell from Dh5,385 per quarter to Dh5,160, a reduction of Dh280 and an annual saving of Dh900. “I have had no calls or emails to tell me anything about these changes," said Mr Corroon, 27, who bought his flat for Dh1.75 million in August 2018 and pays about Dh21,540 per year in service charges. “I only found out through The Greens Facebook forum. I have no idea what the service charges are paying for exactly.” “When I checked my Emaar One mobile app, I noticed my fees have actually dropped for this last quarter.” As part of the changes all landlords and homeowners must sign up to a new payment app called Mollak, which was launched by the land department's regulation agency Rera. A four-month trial has seen 1,240 buildings and 89 property management companies enrolled. The system will be rolled out across the city as of January. That means payments will be made to that system instead of their community management company or developer, and they receive a breakdown of what their services charges are spent on. Marwan bin Ghalita, chief executive of Rera, told The National that homeowners included in the pilot should not have seen their bills rise or been charged more by their developer. He said residents would not be penalised simply because they have outdoor space as there are "no services on it like air conditioning or other utilities". “From the financial audit we have done, we know the overall service charges will come down," he said. “The system will create more transparency." Mario Volpi, leasing manager at Engel & Volkers and a property columnist for The National , said more clarity is needed on the changes. “Any new rules designed to improve the lives of resident property owners is welcome, but why a balcony or terrace should make any difference to service charges is not clear,” he said. “Although agents are not the first to be informed of changes from Rera and the land department, none of this has been communicated to us.”

Dubai's new service charge rules lead to bills spike for some and drop for others

How a property is measured is being redrawn by the city's land authority