Service charges are the annual fees owners in Dubai buildings pay for running and maintaining shared areas. RERA must approve them, and each owner's share is based on the area of their unit. You can check approved rates on the DLD Service Charge Index or in the Dubai REST app before you buy. This guide explains what they cover, who sets them and when they start.
Service charges are the annual fees that owners in a Dubai building or community pay to run and maintain the shared parts: lobbies, lifts, pools, security, cleaning and the building’s insurance. They are regulated. RERA, the regulator within the Dubai Land Department (DLD), must approve them before anyone can collect them, and each owner’s share is worked out from the area of their unit.
Service charges are a recurring cost for as long as you own the unit, and DLD notes that they differ from one project to another. This guide explains what they pay for, who sets them, and how to check the approved rate for a building before you buy. It does not quote rates, because they are set each year. Use the official index instead.
Dubai’s Law No. (6) of 2019 on jointly owned property defines service charges as the annual charges collected from owners to cover the management, operation, maintenance and repair of the jointly owned property. The law limits what the money can be spent on. The main items are:
The reserve fund is held in a separate account and cannot be used, other than in critical emergencies, without RERA approval. DLD’s FAQ describes it as an annual sum for emergencies and major repairs over the long term. DLD’s FAQ also lists utility consumption for common areas and administrative fees among the items covered.
Service charges cover the shared parts only. Repairs inside your own unit, and your own utility bills, are separate.
Several parties are involved, each with a defined role under the law.
You can check the approved rate for any registered building before you buy.
Look at several years if you can, to see how the rate has moved. For an off-plan project, there may be no approved rate yet, because the building is not complete. Ask the developer for its estimate in writing, and treat it as an estimate until RERA approves the first budget.
The law sets the method. Your share of the annual service charges is based on the ratio of your unit’s area to the total area of the jointly owned property, using the area recorded in the Real Property Register. In practice, as DLD’s FAQ explains, you take the rate approved by RERA from the Service Charge Index and multiply it by the area of your unit.
Example, using your own values:
Check which area the charge is based on. The law uses the area recorded in the register, so use the area shown on your registration rather than a marketing brochure.
Ask for the number in writing
Before you sign for an off-plan unit, ask the developer for its estimated service charge rate and the area it will be charged on. After handover, compare it with the approved rate on the Service Charge Index.
In a large master-planned community you may pay two kinds of charge.
Usage charges also need RERA approval, and they are held in a separate bank account that the master developer must open for each major project. If you buy in a master community, ask how much of your yearly cost is building service charges and how much is community usage charges.
For an off-plan buyer, the start date depends on the law and your contract.
The jointly owned property law says the developer pays the annual service charges for units it has not sold, and for sold units where the sale contract or reservation agreement says the developer will pay on the buyer’s behalf. Otherwise, once a unit is sold, the owner pays their share. Read the service charge clause in your sales and purchase agreement and ask the developer to confirm, in writing, the date your charges begin.
Master community usage charges can apply while a building is still under construction, so check whether your SPA passes any of those to you before handover. When you take handover, ask for your first Mollak invoice and check it against the approved rate. The handover and snagging checklist covers what else to check at that stage.
Paying. Mollak sends owners an invoice by email or text message. According to DLD’s FAQ, you can pay by transfer to the regulated bank account shown on the invoice (then send the payment slip to the management company), or online through Noqodi. Dubai REST also lets owners pay.
If you do not pay. The law is strict. An owner may not refuse to pay approved charges. Unpaid charges are a lien on the unit, and the unit cannot be sold until they are paid. After a written notice, the management entity can enforce the claim through the execution judge at the Rental Disputes Settlement Centre, which can order the unit to be sold at auction.
What the developer or manager cannot do. The law forbids a developer or management entity from stopping you using your unit or the common facilities to force payment, outside the legal procedure.
Complaints and disputes.
If you plan to let the unit, service charges come straight off your rental income. A unit with a high rent and high service charges can earn less than one with a lower rent and lower charges. Look at the net figure, not the gross.
A simple way to compare: take the yearly rent you expect, subtract the yearly service charge (rate multiplied by area) and other owner costs, and divide by the total you paid for the property, including fees. The rental yield calculator does this with your own figures, and the guide to calculating rental yield explains each input. For current rents, use the official DLD Rental Index.
Service charges are one line in the full cost of buying off-plan. For more on how they fit the wider process, see the complete guide to buying off-plan in Dubai.
Gross and net yield from your own rent and cost figures.
How we helpWhen your property is ready, we can help you lease it out or sell it.
Use the DLD / RERA Service Charge Index on the DLD website. Choose the master project and project, the usage (for example residential) and the year, and it returns the rate approved by RERA. Owners can also search by title deed. The same index is available in the Dubai REST app. Multiply the rate by the unit's area to estimate the yearly charge.
RERA, the regulator within the Dubai Land Department. Under Dubai's jointly owned property law, a management company may not collect any service charge without RERA approval, and RERA approves a budget only after a RERA-recognised audit firm has approved it. The owners committee reviews budgets and passes owners' concerns to the management company or RERA.
It depends on your contract and on the law. The jointly owned property law says the developer pays the service charges for unsold units, and for sold units where the sale contract says the developer pays on the buyer's behalf. Read the service charge clause in your SPA and ask the developer in writing when your charges start.
Yes. Budgets are set each year, so the approved rate can go up or down from one year to the next. Each budget still needs RERA approval after an audit. If the reserve fund cannot cover an emergency, DLD may ask owners to contribute, with RERA's prior approval. Check the index for several years to see how a building's rate has moved.
Official sources used on this page. Each was checked on the date shown.
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Buying off-plan in Dubai costs the price plus a Dubai Land Department registration fee, small DLD charges and, if you borrow, mortgage registration and bank fees. After handover you pay service charges. This guide lists each cost at booking, during construction, at handover and after, with the official fee pages, so you can budget before you sign. Every government figure links to its official source.
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Rental yield is a year's rent divided by what the property cost you. Gross yield uses rent alone; net yield first subtracts running costs such as service charges, maintenance, management, vacancy and insurance. For a Dubai property, take rent evidence from the DLD Rental Index and registered rents, and cost evidence from the Service Charge Index, not from adverts.
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Handover is when a completed off-plan unit becomes yours to use. Before you accept the keys, settle the final statement, inspect the unit room by room for defects (snagging), record every issue in writing and agree when it will be fixed. This guide covers what happens between completion and handover, a printable snagging checklist, common areas, defects after handover, and the accounts to set up once you have the keys.
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