What service charges actually are
Every freehold building or community in Dubai is run by an owners' association (OA, sometimes called the Jointly Owned Property Committee). The OA budgets every year for the cost of running the building's common areas — and divides that cost across owners on a per-square-foot basis, weighted by each unit's registered area.
That per-sqft figure is your service charge. Pay it annually (some buildings split into half-yearly or quarterly invoices). Non-payment compounds with late fees and ultimately blocks any sale or transfer until cleared via the developer NOC.
Typical 2026 rates by area
Indicative ranges, drawn from current Mollak filings and our own management book (~2,000 units across 40+ buildings):
| Area | Typical AED/sqft/year | What pushes it higher |
|---|---|---|
| Dubai Marina | 18-22 | Sea-view towers with concierge + pool decks |
| Downtown Dubai | 22-28 | Branded towers, central A/C, 5-star service |
| JVC | 12-16 | Mid-market specs, smaller pools |
| Palm Jumeirah | 18-25 | Beach access, private gardens, security |
| Dubai Hills Estate | 14-18 | Master-community amenities (parks, retail) |
| Business Bay | 16-20 | Canal frontage, mixed-use towers |
| JLT | 14-18 | Older stock, some retro-fitted lakes |
| International City | 8-12 | Basic specs, high efficiency |
| Emaar Beachfront | 22-30 | Branded waterfront, premium fit-out |
| Bluewaters | 25-35 | Lifestyle island, retail-led common areas |
| Branded residences (Bvlgari, Bugatti, Armani) | 35-60 | 5-star hotel-grade service teams |
A 1,200 sqft 2-bedroom in JVC at AED 14/sqft costs AED 16,800/year. The same 1,200 sqft in Downtown at AED 25/sqft costs AED 30,000/year. The difference materially compresses net yield in prime areas.
What's included — line by line
A typical Dubai service-charge budget breaks into seven buckets. Mollak filings publish this breakdown for every audited building.
| Cost line | Typical share of budget | Notes |
|---|---|---|
| Master-community service charge | 8-15% | Paid up to the master developer (Emaar, Nakheel, Damac) for roads, landscaping, security gates |
| Building security & concierge | 12-20% | 24/7 reception, guards, CCTV monitoring |
| Chiller / district cooling | 15-25% | Often invoiced separately by Empower / Tabreed but counted here |
| Cleaning & waste management | 8-12% | Common-area cleaning + bulk waste collection |
| Lift maintenance & insurance | 5-8% | Annual maintenance contracts + statutory inspections |
| Gym & pool maintenance | 6-10% | Pool chemicals, gym equipment service contracts |
| Common-area DEWA + sinking fund | 10-18% | Lobby/corridor electricity + reserve fund for major repairs |
| Management fee | 5-10% | The OA management firm (e.g. Asteco, Tafawuq) |
The sinking fund (sometimes called the reserve fund) is the line most owners overlook. It's a forward-looking allocation for big-ticket replacements — facade re-cladding, lift overhauls, chiller plant rebuilds — every 7 to 15 years. Buildings without a sinking fund are a red flag; the cost lands as a special assessment on owners later.
How RERA Mollak governs them
Mollak (Arabic for "owner") is RERA's mandatory escrow and audit platform for owners' associations, launched in 2019 and now compulsory across all freehold Dubai buildings.
How it works: 1. The OA submits its annual budget to Mollak before the financial year starts. 2. RERA reviews and approves the per-sqft rate. 3. Owners pay their service charges into a ring-fenced Mollak escrow account — not into the developer's or the manager's general account. 4. Funds are released only against approved expenditures, with vendor invoices uploaded to the platform. 5. Annual audited accounts are filed with RERA and visible to owners.
This matters because pre-Mollak (2010-2018), service-charge funds were sometimes commingled with developer cash, and audits were patchy. Today, every dirham you pay is traceable, and you can request the Mollak audit pack for any building you own in.
The dispute process
If you believe your service charge is excessive, you have three escalation paths:
Step 1 — General Assembly: Every OA holds an Annual General Assembly where owners vote on the next year's budget. Attend (or appoint a proxy) and raise concerns. A simple-majority vote can block an unjustified hike.
Step 2 — RERA complaint: File a formal complaint via the Dubai REST app (Real Estate Self Transaction). RERA can audit the OA's books, demand justification for any line item, and order a budget revision if abuses are confirmed. No filing fee for owner-initiated complaints.
Step 3 — Rental Disputes Centre or Court: If the OA fails to comply with a RERA order, owners can take it to the Rental Disputes Centre (for rental-related disputes) or the Dubai Courts (for ownership disputes). Costs and timelines run higher; reserve for genuine misconduct.
In our experience managing buildings, the General Assembly route resolves 80% of grievances. Most "excessive" charges trace back to a sinking-fund allocation owners didn't understand — once explained, the budget is usually accepted.
Impact on net rental yield — worked example
Service charges are the single biggest deduction between gross and net yield. Here's a realistic scenario:
Property: 2-bedroom, 1,200 sqft, Dubai Marina Purchase price: AED 2,400,000 Annual rent: AED 165,000 Gross yield: 6.88%
| Deduction | Amount |
|---|---|
| Service charge (1,200 sqft × AED 20) | AED 24,000 |
| Property management fee (7% of rent) | AED 11,550 |
| Maintenance allowance (1.5% of rent) | AED 2,475 |
| Vacancy allowance (5% of rent) | AED 8,250 |
| Total deductions | AED 46,275 |
| Net rent | AED 118,725 |
| Net yield | 4.95% |
Now run the same exercise for a JVC unit at AED 14/sqft service charge — net yield lifts by roughly 0.5 percentage points purely from the lower service charge. Across a 10-year hold, that's AED 144,000 of additional cash flow on a 1,200 sqft unit.
Practical buyer checklist
Before bidding on any building, ask your broker for:
- The most recent Mollak audit pack (12 months).
- The current per-sqft rate and the 3-year rate history (sharp annual hikes are a flag).
- The sinking-fund balance vs the building's age (a 12-year-old tower with zero reserve is a future special-assessment risk).
- Any pending capital works (chiller replacement, facade) that will hit owners over the next 24 months.
- The delinquency rate — buildings with >20% of owners in arrears struggle to fund operations and create a vicious cycle.
We pull all five numbers as part of any transaction we manage. It's the single most under-rated piece of buy-side due diligence in Dubai.
Frequently asked
Dubai charges include central chiller cooling (a major cost in a hot climate), 24/7 concierge and security in most towers, and master-community fees for road and landscaping upkeep — line items that Western strata fees often externalise. Once you adjust for those, Dubai is broadly comparable to Singapore or Hong Kong on a per-sqft basis. Branded residences are the outlier — they're priced like five-star hotel operating costs because that's what they are.
Yes, but only with RERA approval. The OA submits a proposed budget and per-sqft rate to Mollak before each financial year. RERA reviews the inflation case, vendor cost increases, and reserve fund needs. Typical annual increases range from 0% to 6%. Anything above 10% in a single year requires explicit justification and is often pushed back by RERA on first submission.
Late fees accrue (typically 12% per annum on outstanding balances). After 90 days, the OA can refer you to the Rental Disputes Centre. Most importantly, the developer will not issue a transfer NOC for a sale until charges are cleared in full — which means you cannot sell or transfer the property. In severe cases, the OA can place a lien on the property and ultimately force sale via court order.
The per-sqft rate is uniform across all owners, but your invoice scales with your unit's registered area. A 600 sqft studio at AED 20/sqft pays AED 12,000; a 2,400 sqft 4-bedroom in the same building pays AED 48,000. Some buildings apply slight rate adjustments for retail or commercial floors versus residential, but residential is uniform.
Common-area DEWA (lobby lights, lift power, corridor A/C) is included. Your unit's own DEWA (electricity, water inside your apartment) is billed separately and directly to you by the Dubai Electricity & Water Authority. District cooling (Empower or Tabreed) is sometimes bundled into the service charge, sometimes invoiced separately — always confirm before purchase, as it materially affects the all-in cost of ownership.
Yes. Any prospective buyer can request the audit pack via the seller, the listing broker, or directly through the Dubai REST app once you have intent to transact. We provide it as standard during our buy-side due diligence — it's the single most informative document on a building's financial health and operating quality.
Muhammad Adnan founded Al Amman Properties in 2012 after a decade in Dubai's brokerage and property-management space. Under his leadership, Al Amman has closed 500+ sales transactions and built a 2,000-unit management bo…
