When buying an apartment or a house with a plot of land, it is a good idea to calculate how much the maintenance of your new property will cost. There is no tax on real estate ownership in the UAE, but you’ll need to pay for regular cleaning of the building and its surrounding area, for changing the water in the pool, for gardening services and for any necessary repairs.
There is a so-called "service charge" in properties in the UAE, this is a fee payable by each homeowner in a residential building, as well as any owner of a villa, townhouse or bungalow. Want to know more about property maintenance in Dubai? Check out what determines the size of the fee in Dubai, the expenses it covers and how it is calculated and charged.
What Do Service Charges Cover?
What is property maintenance and what does it cover? Service charge is an annual payment that covers such costs as:
- cleaning of the building and other communal areas;
- rubbish collection;
- landscaping inside and around the building;
- management and maintenance of the lifts and the electrical and water supply systems;
- concierge, security and management services;
- upkeep of the community facilities (lobby, underground parking, fitness centre, spa, sauna);
- scheduled repair and renovation of buildings and equipment.
Whether water and electricity is included in property maintenance in Dubai? Service charges do not cover electricity and water bills. Those are resources and their consumption is billed by the Dubai Electricity & Water Authority (DEWA).
How Much Is the Dubai Property Maintenance Charge?
How much do the property maintenance services cost in Dubai? In Dubai, service charges usually range between 3 and 30 AED ($0.82–$8.20) per square foot per year. All premises in the UAE are measured in square feet (1 square foot = 0.093 square metres).
Service charges depend, firstly, on the type of real estate. Fees for villas are much lower than for apartments in multi-storey buildings, since the owners of individual properties take care of their plots themselves, and in addition, there are no lifts in such communities. Shared swimming pools, gyms or covered parking areas are also rare, since each residence usually has its own.
Amenities are the second factor in determining the fee. The wider the range of services available to the residents of the complex, the higher the service charge.
What else can influence on service charges for apartments in Dubai? The third factor is proximity to the city centre. Fees are high in the Downtown area, and Dubai’s most expensive maintenance fees can be found in the world's highest skyscraper, the Burj Khalifa. Its residents pay 72 AED per square foot per year, on average.
Finally, with multi-storey buildings — especially with skyscrapers, — the rates differ depending on the floor on which your property is located. The higher your apartment is, the more expensive its service charges get in Dubai. The higher the floor, the more electricity used by the lift. The cost of supplying water to these premises is also higher. So, penthouses, which occupy the top floor or even the top two or three floors, will always be the most expensive to maintain.
New buildings in the UAE
Service Charge Calculations
Let's calculate how much it costs to maintain different types of real estate in Dubai. Let's explore the service charge for villa in Dubai. For example, let's take a four-bedroom villa for sale in the sub-community of Al Reem 1 in the Arabian Ranches neighbourhood. The villa is 2998 square feet (279 square metres) in size. Service charges in this community are 2.81 AED per square foot per year. So, 2998 x 2.81 = 8424 AED ($2294). That is how much the buyer will pay each year for villa maintenance in Dubai.
Another example. Another example shows the calculation of maintenance charges for apartments in Dubai. A one-bedroom apartment for sale in a low-rise residential complex on Pantheon Boulevard in Jumeirah Village Circle. The size of the apartment is 972 square feet (90 square metres). The charges in this complex are 12.36 AED per square foot per year. 972 x 12.36 = 12,014 AED ($3271).
Let's also consider one-bedroom apartments for sale in the residential tower of The Address Fountain Views Hotel in the Downtown. The size of this apartment is 839 square feet (78 square metres). The service charges are 23.9 AED per square foot per year. 839 x 23.9 = 20,052 AED ($5460).
Apart from the maintenance fees, Dubai's management companies charge a special fee every five to ten years that goes towards the building’s sinking fund. This fund exists so that in case of unforeseen circumstances, for example, a fire or flooding, it is possible to promptly repair, renovate or replace the external cladding, lifts, fire safety or A/C systems, windows, balconies, and so on.
Naturally, most buildings are insured, but insurance companies do not always pay quickly, and so reserve funds are created. Buildings may also require unforeseen repairs at any time.
The amount of the contribution to the sinking fund starts at 500 AED ($136), and for the biggest residences on the highest floors, it can reach 20,000 AED ($5446).
What Happens if I Don't Pay Service Charges?
Service charges must be paid on time by all homeowners in the residential complex, otherwise the property management company will not be able to work properly. Therefore, if the owner of the apartment or villa doesn’t pay, they will receive a letter from the management company asking to make the payment as soon as possible.
The next step will involve the property maintenance company appealing to RERA, which regulates the relationships of all participants in the real estate market in Dubai. After an investigation, which will take a few days, the defaulter will receive a notification from RERA. It will order them to make payment within 30 days and will state the consequences for non-compliance.
The consequences are as follows:
- The management company files a lawsuit against the defaulter (other property owners in the complex can also participate in the suit).
- The judge seizes the defaulter's bank account and forcibly collects funds to fulfil the payment requirement, as well as to cover court costs.
- If there is no money in the account or it is not sufficient, a resolution is issued to sell the property belonging to the defaulter at an auction.
In a Nutshell
All in all, what do we know about property maintenance in Dubai? Service charges for apartments and villas in Dubai are paid annually. The charge depends on the area and the type of real estate, the floor (in a multi-storey building), as well as the location of the residential complex and the range of amenities. Apartments in high buildings situated close to the centre with large pools, gyms, and community parks have the highest fees. Those who wish to save on service charges can, first of all, confirm the exact amount of the fees with the management company before signing any documents. They may also consider other properties in the area of Dubai that interests them, where the house maintenance may be much lower.
Cover photo: Ellington Villa Collection