Service charges play a crucial role in the management and maintenance of properties, ensuring the provision of essential services and amenities to residents and property owners. In this article, we will delve into the latest updates on service charges by DLD, providing a comprehensive understanding of the factors that influence service charges.
What Is A Service Charge?
Ever wondered who ensures the building remains clean at all times, lifts keep working, parking stays designated, and the facade keeps shining? There is an entire team and system that works 24/7 to ensure the smooth operation of the building called the owners’ association’. The service charge that the owners pay to the owner’s association, helps this system run smoothly.
To further explain, service charges are fees collected by owners’ associations to cover the cost of maintaining and managing shared facilities and services in a residential or commercial property. These charges typically include expenses for security, landscaping, cleaning, maintenance, and utilities.
DLD’s Role As A Regulatory Authority
DLD is the top authority when it comes to regulating the financial aspect of the service charges. The DLD has recently issued various updates and guidelines regarding the calculation of service charges to streamline the process, ensure fairness, and create more transparency for property owners and residents.
The new updates, which will be discussed in our forthcoming blogs, have implications for both property owners and residents. With the latest rulings, property owners can expect a clearer breakdown of service charges, making it easier to understand the expenses associated with their property.
Types Of Services Covered Under Service Charges
The scope of the service charge is vast however, we have listed down some key heads that are covered under it.
- Management Services
- Maintenance
- Insurance
- Master Community
- Reserved Fund
- Utility Services
The spectrum of service charges may vary depending on the type and nature of construction, and mutual agreement between the developer and owner’s association company.
Factors Affecting Service Charges Calculation
Influencing factors
Several factors can influence the calculation of service charges, including:
- Property type: For example, if you have an apartment in a building, the charges may differ depending on the proportion of open and covered area. Apartments with big balconies and terraces have relatively lesser service charges. Unlike apartments, service charges for villas and townhouses are generally lesser than apartments because villas often come with individual maintenance responsibilities for the property owner.
- Property size: If you have a big property with a large covered area, you will have to pay more in service charges compared to one with a smaller area.
- Property use: Service charges also vary depending on the usage of the property. Residential, commercial, and industrial properties have different calculations and regulations for service charges.
- Property Location: DLD lays down the regulations for the calculation of service charges in different areas within Dubai. Areas with high cost of living and requiring higher maintenance standards can have higher service charges.
Step-By-Step Guide To Calculating Service Charges
1- Identifying the components of service charges
Start with identifying the different components included in the service charges, such as security, maintenance, landscaping, and utilities. This information can usually be obtained from the property management entity responsible for collecting the service charges.
2- Gathering relevant data and documentation
Collect all relevant data and documentation related to the property, including the size, type, and location. It is also important to gather information on the shared facilities and amenities provided by the developer.
3- Applying the calculation methodology provided by DLD
Follow the calculation methodology provided by the DLD to determine the service charges for the property. Refer to the points mentioned above in the blog. By understanding the latest updates, the factors affecting service charges, and following a step-by-step guide, property owners and residents can gain a clearer understanding of how service charges are calculated and ensure transparency and fairness in the process.
Calculating By Using Rest App
If you are a user of the Dubai REST App, knowing the service charges is even simpler. Just follow these simple steps:
- Open the Dubai REST App and go to ‘Services’ at the bottom of the screen.
- Tap on ‘Service Charge Index’ from the window that pops up.
- Now, you have two options: either type in the property details yourself or find it on the map.
- After you’ve entered the details, click on ‘Search’.
- The app will show you the service charges that apply to that property.
Congratulations! You know your service charges to pay.
Following the step-by-step guide provided by the authorities helps the owners get a clearer understanding of the calculation of service charges, allocation, and utilization on the maintenance and upgradation of the property.
By adhering to the guidelines and tips outlined in this article, individuals can contribute to a fair and sustainable system of service charge calculation, enhancing the overall real estate experience in Dubai.
