Clear Rules, Fair Charges: How Dubai’s Strengthened Legal Framework for Service Charges Protects Property Owners

Service charges have become one of the most closely scrutinised components of property ownership in Dubai, particularly as modern communities grow more complex and operationally demanding. For homeowners and investors alike, these charges directly influence the quality of living, the long-term value of real estate assets, and the overall governance standards within their communities.

With the consolidation of the regulatory framework under Dubai Law No. (6) of 2019 on Jointly Owned Properties, supported by digital systems such as Mollak, expectations placed on developers, Owners Associations (OAs), and community management companies have increased substantially. Service charges are no longer viewed as routine line items on an annual invoice --they now serve as a barometer of compliance, financial discipline, and management accountability across Dubai’s real estate sector.

 

The Legal Backbone: Understanding Law No. (6) of 2019

 

Dubai’s Jointly Owned Property Law, Law No. (6) of 2019, sets out the primary legal framework governing the operation, management, and maintenance of jointly owned properties in the Emirate. Replacing Law No. (27) of 2007, the legislation introduces a more regulated and transparent model for Owners Associations, developer obligations, and community management.

A cornerstone of this framework is the requirement that all service charge budgets be reviewed and approved by the Real Estate Regulatory Authority (RERA) before they may be imposed on owners. This ensures that budgets reflect actual operational requirements and prevents arbitrary or inflated charges.

The law also formalises the role of RERA-licensed management companies, which are appointed to manage and maintain common areas on behalf of Owners Associations. Developers are required to hand over all records, plans, and financial statements upon completion of the project, ensuring continuity and transparency in community administration.

Additionally, Law No. (6) of 2019 establishes mechanisms for auditing, dispute resolution, and regulatory oversight -- ensuring accountability across all stakeholders involved in jointly owned property governance. Together, these measures create a more transparent, regulated, and owner-centric management system across Dubai’s communities.
 

Defining Service Charges: What Exactly Are Owners Paying For?
 

Service charges in Dubai represent the collective costs required to operate, maintain, and manage the common areas and shared facilities of a jointly owned property. These charges are calculated based on the annual budget prepared by the management company and reviewed by the Owners Association, covering essential items such as cleaning, security, landscaping, mechanical and electrical maintenance, and general upkeep of common-use assets. In addition to operational expenses, service charges typically include contributions to the reserve fund, which is allocated for long-term capital replacements -- such as major repairs, equipment replacement, and structural maintenance -- to preserve the property’s long-term value.

Under the regulatory framework supervised by RERA, service charges cannot be collected or demanded from owners unless the budget has been formally reviewed and approved. Costs must reflect actual community management needs, and funds collected must be used solely for the purposes stated in the approved budget. This ensures that owners have clarity on where their money is allocated and that community expenses remain aligned with legal and financial standards. With these safeguards in place, service charges function not merely as routine fees but as structured, regulated contributions to sustaining the overall quality and functionality of jointly owned communities.
 

Understanding Your Rights and the Legal Framework Governing Service Charges
 

Dubai’s system for jointly owned real property (JOP) is anchored in a clear legal framework designed to protect both owners and developers. Law No. (6) of 2019 (“JOP Law”) establishes the rules for how service charges are calculated, approved, audited, and collected within residential and commercial communities. Under this law, developers and Owners Associations (OAs) are prohibited from imposing any fee that is not supported by a certified budget or approved by the Real Estate Regulatory Agency (RERA). This means owners have the right to pay only those service charges that are transparently calculated, independently audited, and formally authorised.


The JOP Law also places strong accountability obligations on the Management Entity, which may be the developer, an OA, or an RERA-licensed management company. These entities must maintain accurate financial records, comply with escrow requirements where applicable, and make annual budgets available for owner review. Importantly, service charge funds must be used strictly for community operations -- such as maintenance, security, cleaning, utilities for common areas, and long-term reserve planning -- and cannot be diverted for purposes unrelated to the property.


Owners further benefit from the oversight powers granted to RERA, which include auditing service charge budgets, resolving disputes, approving community management contracts, and intervening when charges appear unreasonable or unsupported. Together, these mechanisms create a transparent, regulated environment where owners’ contributions are safeguarded, and management entities are held to clear legal duties.
 

How RERA Ensures Transparency, Oversight, and Fair Enforcement

 

A core strength of Dubai’s jointly owned property regime is the active supervisory role of the Real Estate Regulatory Agency (RERA). Under Law No. (6) of 2019, RERA exercises direct regulatory authority over service charge budgets, Owners Association operations, and community management practices. Every annual budget must be submitted to RERA for review and approval, and no OA or developer may levy charges on owners without this clearance. RERA also audits financial statements, evaluates reserve fund allocations, and ensures that service charge calculations reflect actual operational requirements rather than estimates designed to generate surplus revenue.


Furthermore, RERA regulates the appointment and licensing of community management companies, ensuring that only qualified entities handle budgeting, procurement, and facility management. In cases of disputes -- such as contested service charge increases, transparency concerns, or access to financial records -- owners may file complaints through RERA’s designated channels. RERA’s decisions are binding and enforceable, reinforcing a system in which managerial accountability is not optional, but a legal obligation.

Conclusion
 

Dubai’s evolving regulatory framework clearly demonstrates the Emirate’s commitment to strengthening transparency, eliminating arbitrary charges, and ensuring that every dirham collected is used for legitimate community needs. Through the combined force of Law No. (6) of 2019, RERA oversight, and the Mollak system, service charge governance is now more transparent, structured, and accountable than ever before.

As Dubai’s real estate market continues to mature, these safeguards ensure that owners’ rights remain central, management practices improve, and jointly owned communities operate with the financial integrity expected in a world-class property market.

 

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