For an international buyer, the advertised purchase price is only one part of the cost of owning property in Dubai. Service charges can affect annual affordability, resale appeal and the net return from a rental property. They should therefore be reviewed before signing a sale agreement, not treated as an administrative detail to be resolved after completion.

In Dubai, service charges are generally associated with jointly owned property: a building, community or development containing individually owned units and shared areas. The framework is administered through the Dubai Land Department (DLD) and its Real Estate Regulatory Agency (RERA).

This guide explains what the charges cover, how they are approved and which checks a buyer should complete before committing.

What are service charges in Dubai?

Under Dubai Law No. 6 of 2019, service charges are annual charges collected from owners to cover the management, operation, maintenance and repair of jointly owned property.

They may contribute to the upkeep of:

• Lobbies, corridors, stairwells and lifts
• Swimming pools, gyms and other shared facilities
• Landscaping and external common areas
• Security, cleaning and waste services
• Building systems serving common areas
• Common-area electricity, water, cooling or other utilities
• Insurance for the jointly owned property
• Auditing and approved management costs
• A reserve for emergency expenses or replacement of common-area equipment

The law also distinguishes between service charges and usage charges. Usage charges may relate to the operation, maintenance or repair of common facilities in a wider master community, such as landscaped areas, roads, parks or other shared infrastructure.

The precise allocation depends on the project structure, title documents, building management regulations and the budget approved for that property.

What service charges do not automatically cover

Service charges should not be assumed to include every cost associated with occupying or renting a unit. Depending on the property, a buyer may also need to budget separately for:

• Electricity and water consumed inside the unit, often billed through DEWA
• Chilled water or district cooling for the unit
• Internet, telecommunications and television services
• Municipality housing fees, where applicable to the tenancy
• Repairs or alterations inside the unit
• Property management and leasing fees
• Mortgage interest and bank charges
• Insurance arranged separately by the owner
• Vacancy, furnishing, cleaning and maintenance costs for a rental property

The treatment of cooling is particularly important. Common-area cooling costs may form part of the approved charges, while consumption for the individual apartment may be billed separately. Obtain written confirmation for the specific building rather than relying on a general statement from a listing or sales brochure.

This is a general guide only. The approved budget and the project’s governing documents take priority.

How are service charges set and approved?

The service charge is not a single Dubai-wide tariff. It varies by project, use, unit type and approved budget year.

Under Article 25 of Law No. 6 of 2019, an owner’s share is generally calculated using the unit area recorded in the Real Property Register in relation to the jointly owned property. The applicable calculation method may also reflect the rules approved for the project.

A developer or recognised management entity prepares the proposed budget. The process is administered through Mollak, DLD’s digital system for jointly owned property management. DLD’s approval requirements include:

• A detailed annual service-fee budget
• Proposals and evaluated tenders from at least three service providers, subject to RERA requirements
• Service, maintenance, management and insurance contracts
• Relevant water, electricity, central-air-conditioning and other consumption bills
• An external financial audit report from a RERA-accredited auditor

RERA approval is required before service or usage charges are collected. Law No. 6 of 2019 also allows RERA to approve a temporary budget where necessary while the full budget is being processed.

The Service Charge Index is the practical starting point for a buyer. DLD states that users can select the project, use or property type and year to view the approved information. Buyers should check the official DLD Service Charge Index and, where relevant, the Mollak record rather than relying only on an agent’s estimate.

The owner or buyer should also understand the difference between an owners’ association, an owners’ committee and a management entity. International buyers may use “owners’ association” as a general term. Under Dubai’s current framework, an Owners Committee may review annual budgets and raise concerns, while a RERA-recognised management entity administers the property. The developer may remain involved in certain categories of project or until the relevant management arrangements are in place.

Why can similar buildings have very different charges?

Two buildings may look comparable from the outside but have materially different operating costs. Important factors include:

• The number and scale of amenities
• The size of the lobby, podium and landscaped areas
• The number of lifts and other mechanical systems
• Security, concierge and cleaning requirements
• District cooling or central-air-conditioning arrangements
• The number of units sharing the cost
• Building age and the condition of major equipment
• Whether the property forms part of a wider master community
• Whether the budget includes significant reserve-fund contributions
• Whether the project is newly handed over or fully operational

A low-rise building with limited facilities may have a different cost profile from a tower with multiple lifts, extensive plant, valet or concierge services and several shared amenities. Conversely, an older building may require greater maintenance or reserve planning even if it has fewer facilities.

The correct question is not simply, “What is the service charge per square foot?” It is, “What does this charge pay for, how has it changed and what costs sit outside it?”

A modern residential building lobby. Shared areas like this are among the spaces maintained through approved service charges. Photo: Brent Singleton / Pexels.

What changes at handover?

For a completed property, confirm when service-charge liability starts and whether any amount is due before or at handover. The answer may depend on the sale agreement, the approved budget and the project’s management arrangements.

In an early phase of a development, the developer may manage the jointly owned property until a RERA-appointed or recognised management company takes over. Law No. 6 of 2019 provides for the developer to manage the property and maintain collected service charges in the relevant account until a management company is appointed.

New buildings can also experience budget changes during the first few years. Initial estimates may be based on projected operating costs, while actual staffing, utilities, maintenance contracts and reserve requirements become clearer after occupation.

For an off-plan purchase, Oqood, the interim registration system associated with off-plan property, does not remove the need to understand future operating costs. Before committing, request the developer’s current estimate, the intended management structure and confirmation of how and when approved charges will be established. Treat any future figure as an estimate unless it has been formally approved for the relevant period and project.

How service charges affect rental returns

Service charges are an ownership cost, even when the property is intended for rental. A simple assessment of net rental income should begin with:

Gross rent – service charges – property management fees – vacancy – maintenance – leasing costs – other operating expenses = estimated net rental income

This is not a complete investment calculation. Acquisition costs, financing, furnishing, insurance, taxes in the owner’s home jurisdiction and periods without a tenant may also affect the result.

A property with a lower purchase price may not have lower annual ownership costs. Equally, a building with extensive facilities may command a different tenant profile but still require a careful review of whether the additional cost is justified for the investment strategy. Do not use a developer’s advertised yield as a substitute for an independently reviewed net-cost calculation.

Owners remain responsible for service and usage charges unless the lease provides otherwise. Even where a tenant does not pay an amount that the lease assigns to them, the owner may remain liable under the jointly owned property framework. DLD has warned that accumulated unpaid charges can create serious enforcement consequences.

What should a buyer check before committing?

Use the following checklist for the specific unit and building:

• Search the current approved rate on the DLD Service Charge Index.
• Confirm the budget year, property use, unit area and rate per square foot.
• Request the current approved budget and a breakdown of major cost categories.
• For an older building, ask for several years of service-charge history.
• Confirm whether there are separate usage charges for the wider master community.
• Ask which DEWA, cooling, insurance and other utility costs are billed separately.
• Request information on reserve-fund contributions and any approved exceptional charges.
• For off-plan property, ask how interim charges will operate before full management arrangements are established.
• Review the building management regulations, master community declaration and sale agreement.
• Include service charges, management fees and vacancy assumptions in the rental analysis.
• If defects are identified at handover, record them through a formal snagging inspection. Snagging is not a service-charge process, but it can help distinguish developer defects from ordinary common-area maintenance.

What if the charge appears wrong or disputed?

Start by writing to the jointly owned property management company and keep the complaint, invoice and supporting documents. DLD’s published complaints mechanism states that the management company should respond within a maximum of two working days. If the response is absent or unsatisfactory, the complaint can be escalated through the Dubai REST application using the relevant RERA real-estate complaint route.

For judicial disputes involving rights and obligations under the jointly owned property law, the Rental Disputes Settlement Centre (RDSC) is also relevant under Article 42 of Law No. 6 of 2019. This is distinct from ordinary tenancy questions, so owners should verify the current filing route and seek qualified legal advice where a formal claim or recovery action is involved.

The practical starting point remains the approved RERA charge, the Mollak or Service Charge Index record and the project’s governing documents.

A cost check worth doing before signing

Service charges are a recurring commitment and can change the affordability of a property long after the purchase price has been agreed. A careful buyer should check the approved charge, what it includes, what is billed separately, how the budget has behaved over time and whether the cost fits the intended holding strategy.

PJ Advisory Real Estate can help international buyers organise these questions as part of a broader Dubai property review, alongside acquisition costs, financing, residency considerations, handover and post-purchase management. Service-charge analysis should complement, not replace, specialist legal, financial, mortgage or tax advice.

Official sources checked

• DLD Service Charge Index, accessed and checked 9 October 2026.
• DLD approval of service fees and utilisation fees: page updated 7 October 2026.
• Dubai Law No. 6 of 2019 concerning Ownership of Jointly Owned Real Property, issued 4 September 2019.
• DLD complaints mechanism for jointly owned properties, published 15 August 2020.
• DLD guidance on owners’ responsibility for service and usage charges, published 6 January 2020.
• DLD three-year fixed service-fee budget announcement, published 10 December 2025.