Dubai property owners push to scrap service charge fees as new rental system emerges | News Bharat

“Imagine if my tenant had a water leak that needed to be fixed, and I was prevented from doing any repair work.”

The mail to the owner states that the service provider “would deny all your requests/permissions such as delivery of material as well as permission for any repair work inside your unit. Which may create operational problems for the occupant; for continued smooth operation, please pay your dues immediately.”

Other measures taken by property management companies include not allowing a contract to sell or rent the property until the service charges have been settled, either in full or by a significant percentage. According to sources, these companies are upping the ante because there has been a drop in service charge collections after the summer. (There are also proposals to include non-payment of service charges on an individual’s credit score, as with bank loans or, more recently, late electricity and telephone bills).

Property management companies are also upping the ante due to the long-awaited rollout of the ‘starting’ system which is the benchmark for establishing building rentals in Dubai. Such a proposal is being considered by the authorities and, if approved, would mean that the age and maintenance of a particular building will be the main factors in deciding how rents are set.

“The Dubai Land Department’s proposal would put pressure on service charge defaulters,” said a source. “Because if the service charges are not enough to ensure good maintenance of the building, they cannot ask for a higher rent.

“In the planned changes to calculate rent increases, maintaining quality will be a decisive factor in justifying the rating of the building.”

Now is the time for RERA and its audit committees to approve the service charges that Dubai’s freehold buildings and communities can charge in 2023. Over the past year or so, these service charges have remained more or less stable in the main residential locations.

Property management companies say that as long as they can collect 70 to 75 percent of service charge payments at any given time, they can manage the situation even though operating costs have risen significantly. It is when annual collections fall below 50 percent that problems quickly mount.

“Even without a star rating system for buildings, maintenance is an absolute necessity,” said one FM business owner. “When maintenance standards suffer, it’s even harder to get that building back in order.

“The owners have to pay their dues; there is no other outcome that can help.”

Source link