Service Charges in Dubai Explained
Service charges are the annual fees owners pay for the upkeep of a building or community’s shared areas. They are one of the main running costs of a property and should be part of every purchase decision.
What they cover
- Cleaning, security and reception
- Maintenance of lifts, air-conditioning plant and common areas
- Pools, gyms, gardens and playgrounds
- Building insurance and management fees
- A reserve (sinking) fund for major future repairs
They do not cover your own unit’s utilities or internal maintenance, and district cooling is usually billed separately.
How they are set
The management company prepares a yearly budget, which must be approved by the Real Estate Regulatory Agency (RERA). Approved charges and payments are handled through the regulator’s Mollak system, and RERA publishes an index of approved rates.
How they are calculated
Charges are quoted as a rate per square foot per year and multiplied by the area of your unit. A 1,000 sq ft apartment at AED 15 per sq ft pays AED 15,000 a year, usually in quarterly instalments.
What makes them higher
- Towers with many lifts and extensive amenities
- Hotel-serviced and branded residences
- Older buildings needing more repair
- Waterfront and high-maintenance landscaping
Villa and townhouse communities generally have lower rates per square foot, but owners maintain their own property.
If they are not paid
Unpaid charges accumulate against the unit. The developer will not issue the NOC needed to sell, and the management company can take legal action. A buyer should always check that charges are paid up — arrears must be cleared at transfer.
What to ask before buying
- What is the current approved rate per square foot?
- Is district cooling included or separate?
- Are there any arrears or special levies?
- How has the rate changed over the last few years?
Include service charges when you work out rental yield and the cost of buying.
Fees and rules change. Confirm current figures with the Dubai Land Department (DLD), your bank or your advisor before you commit — this guide is general information, not legal or financial advice.