RERA stops hike in service charge

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Gulfnews: Rera stops hike in service charge

Dubai: Dubai's property regulator, Real Estate Regulatory Authority (RERA) on Saturday ordered all developers not to increase service charges, which are being brought under a new set of regulation as per Strata Law No 27 of 2008.

In a letter, RERA has asked all the master developers and developers not to increase service charges without getting its permission first.

The move comes after some developers have increased service charges in recent months - at a time when property prices have begun to decline, raising an outcry from investors.

Marwan Bin Ghalita, RERA chief executive, said in a statement, "The Agency (RERA) received a lot of complains regarding this as master developers have been increasing services charges and not being transparent about the amount while selling properties.

"We are in the final step on creating one service charges formula to make sure that all developers follow it when calculating service charges."

RERA also asked all owners to read their contracts and pay the approved service charges as prescribed by RERA to get the best services.

Maintenance service charges have, so far not being brought under any regulation, as a result of which, most developers usually fix price as per their own arithmetics and then assign the maintenance works to their subsidiaries - in a way to make extra money.

Most property developers do not disclose the maintenance fees while selling apartments or villas, as a strategy. Buyers often get a shock after seeing the bills - something that many of them have not considered.

Maintenance and service charges usually range from Dh12 to Dh30 per square feet - although in most premises repairs are done by the contracting company as part of the deal. During the first few years, the developers pocket hefty amount in the name of service charges - an issue that forced some buyers to take up their cases with the developers a few years ago.

Sultan Bin Mijrin, director-general of the Land Department has asked developers to register properties with the Land Department in order for the department to calculate and process the service charges.

Analysts have hailed the move saying, it will help restore investor confidence.

"It is a very good initiative and has been pending for a long time," Sudhir Kumar, managing director of Realtor's International - a property consultancy, told Gulf News yesterday.

"The new regulation should be strictly enforced and it will help restore investor confidence. Service charge has been a major issue for property buyers. Putting this under a system and monitoring any increase would help end-users."

By Gulf News


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For my one bedroom apartment area 800 sq ft in JLT I pay totally 30 dhs psf of developer maintenance charges, DMCC maintenance charges, chilled water charges, and annual PDC chilled water charges to DEWA.
Moreover the developer wants it in one cheque with 100 dhs penalty on late payment!!!! The developers maintain they are only collecting dhs 8 psf and the balance is as per the Contract we signed .
When buying our property, we didn’t realize that all these charges are not included in the developer maintenance charges. This is preposterous and needs serious investigation and evaluation
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