Service charges in Dubai: what you are actually paying for

Service charges in Dubai are paid annually by every owner of a unit in a strata-titled development. The funds cover:

1. Building maintenance — lifts, facade, structure, lobby, landscaping, pools, gyms. 2. Staff costs — concierge, security, cleaning, engineering. 3. Utilities for common areas — lighting, pool heating, chiller for common areas. 4. Insurance — building structural insurance (mandatory). 5. A reserve (sinking) fund — set aside for major replacements (lift motors, chiller plant, roof membrane) on a 10–15-year horizon. 6. Owners-association management fee — typically paid to a licensed OA manager (Kaizen, Core, Asteco).

Why a higher service charge can represent better value.

A tower with AED 14/sq ft service charge but a neglected reserve fund will impose heavy special-assessment charges on owners when the lift motors go. A tower with AED 22/sq ft that funds a healthy reserve — typically 15–25 % of the annual budget — protects owners from special assessments for 10–15 years.

How to read a service-charge figure:

- Get the annual OA budget from the developer or OA manager. This is a public document. - Check the reserve-fund contribution as a % of the total budget. Over 15 % is healthy; under 8 % is a red flag. - Check the staffing complement — a tower with an under-resourced concierge and security desk will not age well. - Compare insurance coverage in the budget. Under-insured towers sit on legacy rebuild values from ten years ago.

What service charges do NOT typically cover:

- Chiller (district cooling) for each unit — billed separately unless the tower budget absorbs it - DEWA for each unit - Individual tenant/unit internet and cable - Repairs to the unit interior

What you can and should ask for before buying:

1. The last 3 years of OA audited accounts 2. The 10-year planned maintenance forecast 3. The current reserve-fund balance 4. A statement from the OA manager that service charges are up-to-date on the specific unit you are buying

We provide all four of the above to our buyers before they sign the MOU. If a developer or OA manager is unwilling to share them, that is a piece of information we treat seriously.