Dubai property owners pushed to clear service charge dues
Property management companies restrict some owners from repairs on rented units
Homeowners in Dubai are once again getting prompts to clear their service charge dues before year-end, with property management companies saying strict action will need to be taken for further delays.
Some owners who have properties rented out have been receiving updates saying they will no longer be allowed to conduct ‘any repair work’ on their units if dues are not cleared by the extension date provided. “I was baffled to receive the memo, because I was late only by seven days or so,” said one homeowner. “I have registered a complaint with the Dubai Land Department, saying such denial of service should not be allowed.
“Imagine if my tenant had a water leak issue to be dealt with — and me being prevented from doing any repair work.” (On this particular to and fro, the property owner managed to win an apology from the concerned company.)
The mail to the property owner states the service provider would ‘deny all your request/ permits like delivery of material as well permission for any repair work inside your unit. Which can create operational issues for the occupant — for continuity of smooth operation please pay your dues immediately.”
Sale and rental contracts
Other measures that property management companies have taken include not allowing a sale or rental contract on the property until service charges are cleared, either in full or a sizeable percentage of it. According to sources, these companies are upping the ante because there’s been a dip in service charge collections after summer. (There are also proposals to place nonpayment of service charges to be included in the individual’s credit score, much like it is on bank loans or, more recently, delays happening on electricity and phone bills.) “It’s a big issue as most property service providers are struggling with delayed receivables. In our context, the average on DSO days are above 150 to 180 days. Rera needs to step in to regularise the situation as we have stopped providing services to owner associations”, said Tariq Chauhan of EFS Group.
Star rating for rentals
Property management companies are also raising the stakes because of the much anticipated rollout of the ‘star rating’ system being the benchmark to set rentals for buildings in Dubai. Such a proposal is being looked into by the authorities and, if passed, would mean age and upkeep of a particular building will be the main factors in deciding how rents are set.