As a property buyer in Dubai, you need to understand the purpose of the service charges, how it’s been calculated, and to whom you pay it.

We know how some owners feel about service charge fees. It is understandable that some landlords don’t like the service charges fees because it decreases that total net profit of their rented properties.

However, these fees keep the value of the property safe, and increase the return on the long run. Because the purpose of collecting the service charge fees is to maintain the quality of the building and the community, provide security, and make sure things are in place.

As you know, the service charge fee is a certain amount of money paid quarterly to the owners’ association through an escrow account. This is association manages, controls, and administers the common areas on behalf of all owners.

Matters like enforcement of statutory regulations, community or building rules, maintenance, cleaning, and security team are all funded from the security charge fees paid by all owners in the building or the community.

How are the service charges calculated?

Simply, it is calculated per the size of the property. Owners’ Association in their annual meeting discuss the budget required to pay for the items such as the one we mentioned earlier.

Then divide the total on the total square feet in the project or the building.

That number becomes the service charge fee base line for all owners.

For example, if you own 1000 sq in a building that’s made of 100k sq and the total budget decided by owner association was 1 million, then the service charge fees in this case will be 10AED per square feet.

So you pay 10k per year on quarterly installments of AED2,500 every three months.

Our team at Key Clue Properties can answer any question you may have when it comes to real estate in Dubai.

Please don’t hesitate to get in touch and we’ll be glad to help.

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