Service charges are the recurring cost of owning an apartment rather than a villa. They fund the operation of everything outside your front door, and over a holding period they can matter as much as the purchase price.
What they typically cover
- Cleaning, security, and management of common areas.
- Maintenance of lifts, pumps, fire systems and building services.
- Insurance of the building's common property.
- Landscaping, pools, gyms and other shared amenities.
- Contributions to a reserve fund for major future works.
How the rate is set
Service charges in Dubai are calculated as a rate per square foot of the unit and are subject to the regulatory framework administered by RERA within the Dubai Land Department. Budgets are prepared for each building and approved rather than set unilaterally.
Owners are usually able to review the approved figures for their building, and prospective buyers should ask to see them.
Why buildings differ so much
- Amenity level: pools, gyms, concierge and landscaping all cost money to run.
- Building age and condition: older assets need more maintenance.
- Cooling arrangement: district cooling versus building chillers changes the cost structure.
- Mixed-use towers: apportionment between residential, retail and hotel components matters.
The reserve fund question
A building with a properly funded reserve is in a better position to handle major works, façade, lifts, chillers, without a large one-off levy on owners. A low service charge with no reserve is not necessarily good news.
What to ask before buying
- The current approved service charge rate per square foot for this building.
- The rate for the last three years, to see the trend.
- The reserve fund balance and any planned major works.
- Whether cooling is included or billed separately.
- Whether there are outstanding arrears attached to the unit.
Frequently asked questions
- Who regulates service charges in Dubai?
- Service charges fall under the regulatory framework administered by RERA within the Dubai Land Department, which oversees the approval of building budgets and rates.
- Are service charges included in rent?
- Service charges are an owner's obligation. Tenants generally do not pay them directly, though cooling and utility charges are commonly billed to the occupant. Check the tenancy contract.