20200814 downtown dubai
Property owners in Dubai must clear off their service charge dues - and not just for the year-to-date alone. Image Credit: AFP

Dubai: Property owners who have fallen behind on service charge payments in Dubai will not be given official clearance to rent or sell that unit – until all arrears have been cleared. This follows the end of the 30-day grace period after they were served with legal notices from their owners association (OA) management companies and on the go-ahead from RERA (Real Estate Regulatory Authority).

The Rental Disputes Centre at Dubai Land Department will thus become the focal point for all these cases to be heard and verdicts delivered on. On the RDC portal, a new window has opened for cases involving owners associations and service charges.

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“All unpaid service charges linked to a particular property will need to be cleared – and not just the 2020 year-to-date dues,” said Saeed Al Fahim, CEO of Stratum, the property management company. “Non-payment of service charges has risen to be an industry-wide issue and with consequences for the state of the property and the community it’s a part of.

“The authorities clearly believe that the issue of non-payment needs to be resolved at the earliest opportunity. The denial of ‘Ejari’ certificate for such rented properties or a sale registration is the only way the backlog of unpaid service charges can be cleared.”

Owner Association Cases
A new window has been added to Dubai's Rental Disputes Centre's mandate, in the form of Owners Association related cases. Image Credit: Gulf News Archive

Tough ask

It was last month that OA companies started issuing legal notices to property owners who had fallen behind on service fee payments. But at the time, it was felt that these applied to only bringing payments for this year to be brought up-to-date.

But ‘Gulf News’ has received messages from property owners served with legal notices. One landlord in Jumeirah Village Circle even received a letter from his OA company for dues even before he had bought the apartment in 2016.

Now, all such issues will be heard by the Rental Disputes Centre, newly empowered to take on OA cases as well. The fee for filing such a hearing is under Dh200, sources say.

Split them up

Property management companies confirm they have received feedback from many landlords stating their willingness to pay, but that they needed more time to do so. “We will look favourably at all such requests for staggered payments,” said Al Fahim. “But even then, these will not stretch into years – we are talking months, maybe six months at a maximum.

“Falling back on service charge payments affects everyone in that building or community – and there are payments that need to be made utility companies, facilities service providers and even insurance firms. If OA managers don’t have sufficient funds available as per the agreed upon service charges, then the quality of the property’s upkeep gets affected.”

Saeed Al Fahim
Owner association firms have no option but to go after the unpaid service charges. Quality of the properties and communities are at stake. Image Credit: Gulf News Archive

Boxed in

For property owners with dues to be paid, the tougher stance will place them at a disadvantage. Many would have hoped that rentals will meet all their payment obligations on that property. But with rents sliding, meeting those commitments is getting tougher by the month.

This is why the denial of Ejari clearances when renting a property will hit them particularly hard. “If it were just a few thousands, it wouldn’t be a bother,” said a property owner. “Most investors and end-users will want more time to clear off all their dues – there should be more dialogues between all parties involved to come up with a settlement that everyone can benefit from.”