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Some Property Owners Have Informed Unpaid Renters That They Cannot Have Any Repairs Made To Their Units.
Homeowners in Dubai are once more being reminded to pay their service charge debts before the end of the year. In addition, property management companies are threatening harsh action if there are any further delays.
Some property owners who rent out their units have been getting updates stating that if dues not paid by the extension date given. They will no longer allow performing “any repair work” on their units. One homeowner said, “I was perplexed to obtain the memo because I was only late by about seven days.” “I have filed a complaint to the Dubai Land Department, contending that such service denial is unacceptable.” “Consider if I cannot perform any repairs if my tenant needed to deal with a water leak issue.”
The service provider would “deny all your requests/permits” including delivery of the material and permission for any repairs inside your unit, according to a letter sent to the property owner. Which may cause operational problems for the occupant. Therefore, to maintain a smooth operation, please pay your debts right away.
Other measures taken by property management companies include delaying the execution of a sale or rental agreement on the property until all. Or a significant portion of the service charges has been paid. Sources claim that these businesses are raising the stakes because service charge collections have decreased since the summer. (There are also plans to include non-payment of service fees in a person’s credit score. Much like it is for bank loans or, more recently, for late payments on phone and electricity bills.)
Rating Power
Property management companies are raising the stakes. Because of the much-anticipated implementation of the “star rating” system. Which will serve as the standard for determining rental prices for buildings in Dubai. The age and maintenance of a particular building would be the primary determinants of how rents are set. If such a proposal were to be adopted, which the authorities are currently investigating.
According to a source, the Dubai Land Department’s proposal “would put pressure on those who do not pay service charges.” “Since they can’t demand a higher rental if service charges are not enough to ensure the building maintained properly. Quality upkeep will be a key consideration in the modifications to the formula used to determine rent increases.
Will Service Fees Increase?
RERA and its audit committees are currently approving the service fees that freehold structures and communities in Dubai may impose starting in 2023. These service fees have essentially remained stable in the past year in all major residential areas.
Property management firms claim that even though operating costs have significantly increased. They can still manage the situation as long as they can collect 70–75% of service fee payments at any given time. The moment annual collections fall below 50%, issues start to become urgent.
Upkeep is a necessity even in the absence of a star rating system for buildings, according to the owner of an FM company. “Restoring order to that building becomes even more challenging when upkeep standards are compromised. There is no other outcome that can help; property owners must pay their debts.
