Dubai’s Rental Disputes Center Establishes A New Legal Principle On Real Estate Service Fees
The Dubai Rental Disputes Center has introduced a new legal principle concerning real estate service fees, resolving recurring disputes between owners and property developers over responsibility for the cost of operating and maintaining shared building facilities.
Under the new ruling, unit holders are obliged to pay service charges even if they have not formally taken possession of their property, particularly when the delay in handover is due to reasons attributed to the buyer. This interpretation is anchored in Law No. (6) of 2019 on Jointly Owned Properties, which regulates the payment of such fees to cover management, operation, and maintenance costs. According to the law, either the developer or the owner must bear these charges for unsold units, with funds directed to management companies to ensure uninterrupted services and efficient building upkeep.
While the legislation has been generally clear, a unique situation had sparked legal uncertainty: units sold via installments that were completed but not yet registered under the buyers’ names. In several cases, developers withheld delivery due to outstanding dues, raising the question of who should cover the service fees the buyer or the developer.
To settle this ambiguity, the case was referred to the General Authority for Unifying Principles within the Center. Following a comprehensive review of the relevant legal provisions, the Authority determined that the buyer whose name appears in the preliminary register of the residential unit is liable for service charges starting from the date of project completion or from the moment of default on payment obligations, even if final ownership has not yet been transferred. This ensures continuous facility operations and protects developers and compliant owners from financial burdens.
His Excellency Judge Abdulqader Mousa Mohammed, President of the Rental Disputes Center, said: “The General Authority has addressed this legislative gap by interpreting the law’s underlying intent to secure the stability of jointly owned properties and guarantee the uninterrupted provision of essential services. Holding defaulting buyers accountable for service charges aligns with the spirit of the legislation. By doing so, we have established a clear judicial precedent that eliminates confusion, strengthens practical approach, and reaffirms our commitment to justice and fair dispute resolution.”
This legal principle reinforces confidence in Dubai’s regulatory framework for the property sector, ensuring the continuity of vital services within buildings, protecting the interests of compliant owners, and preventing loopholes that could undermine the community as a whole. It also underscores the Rental Disputes Center’s pivotal role in clarifying legislative interpretations through rigorous judicial mechanisms, keeping pace with evolving real estate practices while cementing Dubai’s reputation as a premier global investment destination.
In line with its role in setting clear legal foundations that strengthen the sustainability of jointly owned properties, the center also closed 49,817 execution files related to joint ownership in 2024. This achievement coincided with the launch of the self-execution service for service fee claims, a streamlined mechanism designed to enable property management companies to submit claims efficiently, ensuring service consistency and enhancing the overall efficiency of building management.
