Expert Eye: Service charges in your control

The issue on service charges never really seems to go away. Virtually every owner or tenant in Dubai has, at some stage, experienced very poor service delivery while the charges associated with even average levels of service have been unacceptable to any right -minded person. The reason why this situation has occurred in many cases is the lack of competition, transparency arid accountability in the appointment and conduct of some service companies.

The establishment of owners associations (OAS) has long been seen as one way to increase the efficiency and effectiveness of service providers. However, in many cases, owners have had a low participation rate in the management of their buildings while many

developers have adopted the role of building management as a profit stream post-completion.

For those properties that have functioning OAs, the new Investor Protection Law, due for implementation in 2015. will strengthen the legal status of OAs by allowing them to operate as separate legal entities when conducting their business. This move can only further
enhance the legal standing of an OA when it goes about selecting, appointing and auditing service suppliers.A well-functioning, legally empowered OA will go a long way in ensuring that owners get what they pay for with regard to service providers.

As with any service, the rate you are charged will depend on the level of service you are receiving along with the configuration of your building. For reference, service charges vary from Dh10.5 per sq.ft. for projects in Dubailand, Dh15 in The Greens, Dh15 in Dubai Marina up to Db22 in Downtown Dubai. There are many factors at play which will determine the rate charged.

Regardless of what is being paid, the objective of any OA must be to control costs and improve the efficiency of service providers. This is one way by which OAs play a very important part in the development of a mature real estate industry and, by having a legal structure to facilitate the representation of owners’ interests in the management and operation of their property assets, help fuel investor confidence by ensuring services are provided in an efficient and effective manner which then helps maximize investor returns, thereby contributing to growth in property value.


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