Who Pays Property Service Charges Before Handover? Dubai RDC Clarifies
The Dubai Rental Disputes Center (RDC) has introduced a new legal principle that directly impacts property buyers and owners across the UAE. The ruling confirms that buyers must pay service charges even before formally taking possession of their property, if delays in handover are caused by the buyer’s own actions. This precedent resolves long-standing disputes between developers and buyers and provides clarity for maintaining essential building services.
Background: Service Fees and Jointly Owned Properties
Under Law No. (6) of 2019 on Jointly Owned Properties, service fees are mandatory contributions used to maintain shared facilities in residential and commercial buildings. These charges ensure the proper upkeep of common areas such as elevators, pools, gyms, and security systems, which are vital for residents and property value preservation.
Disputes often arose when handovers were delayed, especially if buyers defaulted on payments. Many questioned whether the developer or the buyer should be responsible for covering these ongoing charges during the interim period. The new ruling by the RDC addresses this issue directly, closing a legal gap that has created uncertainty for years.
The RDC’s Clarification
The RDC stated that once a buyer’s name is listed in the preliminary property register, they are responsible for service charges from one of two points—whichever comes first:
- The date of project completion.
- The date on which the buyer defaulted on required payments.
Judge Abdulqader Mousa Mohammed, President of the RDC, emphasized: “This decision closes a legal gap and ensures fairness for compliant owners and developers. It guarantees that essential services in buildings continue without interruption and that those who delay payment cannot avoid their obligations.”
Impact on Buyers and Owners
This ruling carries important implications for both current and prospective property owners:
- For buyers: Defaulting on payments no longer delays their responsibility for service fees. Buyers must account for these charges as part of their financial obligations, even if handover is delayed.
- For developers: The ruling ensures they can maintain building operations without absorbing unpaid service costs caused by buyer delays.
- For residents: The decision provides greater stability and consistency in building services, as funds for maintenance will flow regardless of disputes over handover timing.
Broader Market Significance
The clarification strengthens Dubai’s reputation as a transparent and investor-friendly market. By ensuring uninterrupted services and holding all parties accountable, the RDC reinforces market confidence and reduces the risk of disputes affecting property values. This ruling also highlights Dubai’s proactive approach to closing regulatory gaps and safeguarding community living standards.
RDC’s Wider Role in Real Estate Disputes
The RDC continues to demonstrate its role as a cornerstone of dispute resolution in Dubai’s property market. In 2024 alone, the Center closed nearly 50,000 execution files related to jointly owned properties. It also launched a self-execution service for service fee claims, enabling property managers to recover dues faster and improve operational efficiency. These initiatives further streamline the market and ensure that legal disputes do not compromise property upkeep.
Final Thoughts
This new legal principle is a milestone for Dubai’s property sector. By holding buyers accountable for service charges upon project completion or payment default, the RDC ensures that shared facilities remain well-maintained, developers are protected, and compliant owners are not unfairly burdened. For investors, it signals Dubai’s ongoing commitment to enhancing legal clarity, transparency, and long-term stability in one of the world’s most dynamic real estate markets.
Disclaimer: This article is for informational purposes only and does not constitute legal advice. For guidance specific to your circumstances, please consult a qualified legal advisor.
