Dubai property developers told not to increase services charges

Dubai, 7 Feb. 2009 Dubai’s Real Estate Regulatory Agency (RERA) has directed all property developers in the Emirates not to increase services charges during 2009, without its permission. These service charges are being brought under a new set of regulation as per Strata Law No 27 of 2008.

Sultan Butti bin Mujrin, Director of Dubai Land Department, said the move was in line with the Condominium Law No. 27 for 2008 on ownership of joint properties in Dubai.

He stressed the need that all developers should complete their property projects’ registration so the service charges will be levied as per the law after proper registration. “The project registration is a pre-condition for imposing services charges on the property owners,” he explained.

“The services charges are no longer subject to the developers’ calculations and their desire to turn them into a profit-making tool,” Marwan bin Ghalita, Chief Executive of RERA said.

He revealed that RERA was developing a formula for calculating services charges that will seek to strike a balance between the expenditure shouldered by the developers and the quality of services received by the owners and in a way that will not turn the charges into a burden for owners.

Maintenance service charges from developers have, so far not being minitored under any state regulation, and most developers usually fix maintenance charge as per their own calculation and then assign the maintenance works to their own subsidiaries in order to make extra money.

Many property developers do not disclose the maintenance fees at the time of booking, 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 foot although in most premises repairs are done by the contracting company as part of the deal.

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. reported Gulf News today

“It is a very good initiative and has been pending for a long time,” Sudhir Kumar, managing director of Realtor’s International – a property consult.

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