Dubai: Homeowners in Dubai can now file formal complaints with Dubai Land Department if they believe there are some significant flaws in the quality of their building’s promises. The Rental Disputes Centre – which points under the Land Department – are taking such cases from landholders, in what is seen as a great deal in Dubai’s freehold property market.
It was recently noted that RDC started providing verdicts in cases brought against landholders for not filing their annual service charges with owners association (OA) management companies. In accordance with the market sources, there are lots of buildings – and even within communities – where service charge collections are not even at the 50 percent mark.
But with the recent action, landholders now have a forum to present their complaints against OA management companies and get a full consideration of what they are doing with the service charges. “This evens up the situation – homeowners get to voice their concerns and ask for the real estate authorities to intervene on their behalf,” said a homeowner with an apartment in Dubai Marina.
The fee to file their case at RDC is Dh200.
The 2021 services charges for numerous buildings are still being concluded.
Many landholders are calling for a major depletion in service charges, and have been constantly citing the downfall in property rentals and sales values to bring home their point.
At fault
Main executives at OA management companies, however, trust that if there are quality issues in a building’s maintenance, then the landholders themselves must take a lot of the blame. “Service fees have been in arrears – in many cases for over a year,” said Saeed Al Fahim, CEO of Stratum, the property management company. “It’s because many homeowners have not paid the expenses relating to their buildings that the asset quality is deteriorating.”
According to Al Fahim, OA companies are not bound to use their own funds when a building’s service charge collections fall short.
OA companies do not possess the capital reserves… nor are they required to fund from their capital,” said Al Fahim. “This is what homeowners are failing to grasp. The Land Department has been supportive of this fact – owners need to pay their service fees.
“If they don’t, then there is little that can be done to upkeep the building.”
Check ’em out
Now, on receiving the complaints about the landholders, the RDC is likely to appoint independent auditors to look into whether there is a worth in these. They will do so in the marketplace where the buildings within the same location have steep differences in their service charge tariffs, in some cases by well over Dh10 a square foot and over.
And then, there is the query of the unpaid services charges. It was last year that this problem saw a rapid hike, with landowners because of the pandemic, the job and business situation for backtracking on service charge dues.
Following this, the OA management companies started complaining about cases against individual landowners with the RDC and calling for urgent interference from the regulator. In a recent verdict, the RDC has directed that the concerned landholders cannot rent or sell their lands until the liabilities are cleared. But even then, payments – and clearing liabilities – are still not moving at speed.
“There have been initiatives taken by some homeowners to pay in installments, but collections still need to improve substantially,” said Al Fahim. “There are issues with job losses and mortgage defaults – that’s understandable.
“But there is not much that the OA companies can do without infusions from property owners.”
The ball is now in the RDC’s court for that final settlement.