Dubai, UAE – The Dubai Rental Disputes Centre has introduced a new legal principle to address recurring disputes between property developers and unit owners over responsibility for service fees in jointly owned buildings. The ruling clarifies that unit holders must pay service charges even if they have not formally taken possession of their property, provided delays are linked to the buyer.
Clarifying Legal Ambiguity
The decision is rooted in Law No. (6) of 2019 on Jointly Owned Properties, which stipulates that service charges are payable to cover the management, operation, and maintenance of shared facilities. Under the law, either the developer or the owner must bear these costs for unsold units to ensure uninterrupted building services.
Also read: Nakheel Awards AED 169m Contract for Bay Villas Dubai Islands Infrastructure
The clarification was needed after cases involving installment-based unit sales created uncertainty. Developers often withheld handover due to outstanding dues, raising questions about liability for service charges in the interim. Following a review, the General Authority for Unifying Principles determined that buyers listed in the preliminary register of a unit are responsible for service charges from the date of project completion or from the moment of payment default, even if final ownership transfer has not occurred.
Judicial Precedent for Stability
Judge Abdulqader Mousa Mohammed, President of the Rental Disputes Centre, said the Authority had addressed a legislative gap by interpreting the law’s intent to ensure the stability of jointly owned properties. “Holding defaulting buyers accountable for service charges aligns with the spirit of the legislation,” he said, adding that the ruling establishes a judicial precedent that strengthens dispute resolution and safeguards community sustainability.
The Centre noted that the principle protects compliant owners and developers from shouldering additional financial burdens, while ensuring that shared facilities remain operational and adequately funded.
Broader Implications for Investors
The Rental Disputes Centre closed 49,817 execution files related to joint ownership in 2024, supported by the introduction of a self-execution service for service fee claims. This streamlined process allows property management companies to recover dues more efficiently, maintaining service consistency.
For Indian investors, who represent one of Dubai’s largest buyer groups, the ruling provides clarity on ongoing obligations when purchasing off-plan properties. By reinforcing accountability and ensuring uninterrupted services, the decision enhances transparency, investor confidence, and long-term stability in Dubai’s real estate market.
Discover more from Invest Dubai Today - Dubai Realty Insights
Subscribe to get the latest posts sent to your email.
