Service and usage charges are a central feature of living and investing in Dubai’s jointly owned properties, yet they are often misunderstood and a frequent source of disputes between landlords, tenants and management companies. These charges are not optional extras: they are regulated, RERA‑approved obligations that directly affect how your building and community are managed and maintained.
This article explains who pays service charges in Dubai under Law No. 6 of 2019, what different types of charges mean, how the Real Estate Regulatory Agency (RERA), through the Mollak system, approves and oversees budgets, how to pay safely, and what happens if charges are not paid. It also covers VAT treatment, the Tayseer initiative for overdue fees, Palm Jumeirah’s three-year fixed service fees, and a practical checklist for both owners and tenants. EGSH, as a licensed one-stop government services centre in Dubai, helps clients navigate these procedures correctly and coordinate with the relevant authorities where needed.
Key Concepts: Service, Usage and Joint‑Service Charges
Before examining liability, it is essential to understand the different types of charges that apply to jointly owned properties and master communities in Dubai. RERA distinguishes between service charges, usage charges, and the wider basket often referred to as joint‑service charges, each linked to specific parts of the property and its facilities.
What Are Service Charges in Dubai?
In Dubai, “service charges” are annual financial charges approved by the RERA and collected from unit owners to cover the management, operation, maintenance and repair of the jointly owned property’s common areas. These areas typically include lobbies, corridors, lifts, stairwells, car parks, gyms, pools, and other shared facilities used by all owners and occupants. [[Simple diagram labelling a building’s common areas (lobby, lifts, corridors, pool) with “service charges” arrow from unit owners to RERA‑approved budget]]
Service charges are not uniform across the city; they differ from one building or complex to another depending on the level of services, the size and specification of common areas, and the mix and size of units sold. A high‑service tower with extensive amenities and large landscaped podiums will generally have higher service charges than a simpler building. Crucially, management companies may not legally charge owners service charges until RERA has reviewed and approved the service‑charge budget for that specific property.
Usage Charges and Joint‑Service Charges
Alongside building‑level service charges, Dubai recognises “usage charges” in larger master developments. Usage charges are annual charges approved by RERA and collected from unit owners to cover the management, operation, maintenance and repair of common facilities in the wider master community, such as main roads within the community, shared landscaping, district‑level security, and master amenities like community parks.
In practice, owners typically see a combined set of “joint‑service charges” for their unit, bundling several components into a single bill. According to the DLD guidance, joint‑service charges in jointly owned projects may include building service charges, maintenance expenses, utility consumption for common areas (electricity, water and air conditioning, including chiller or district cooling for shared spaces), administrative and management fees, insurance premiums for the building, master community (usage) charges, and annual reserve or sinking fund contributions for future major repairs.
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Who Pays What Under Dubai Law No. (6) of 2019?
The core question for most people is simple: Who is responsible for service charges, the owner or the tenant? Dubai Law No. (6) of 2019 on jointly owned properties, and RERA’s official guidance, provide a clear default rule for legal liability while allowing some flexibility in lease arrangements.
Default Legal Rule: The Owner’s Liability
Under Article 16(b) of Dubai Law No. 6 of 2019, the default position is that the unit owner must pay service and usage charges for jointly owned property. The Dubai Land Department has confirmed that owners are directly responsible to RERA for approved joint-service charges needed to operate and manage common areas and facilities.
If these approved charges are not paid, they accrue as a debt against the unit, not against the tenant. Over time, this can lead to substantial arrears, which may hinder community operations and the management entity's ability to meet supplier obligations. In serious or persistent cases, the law allows a judicial sale of the unit, with proceeds used to settle outstanding service and usage charge debts.
When the Tenant Pays: Contractual Allocation
Although the law makes the owner legally liable for the project, the economic burden of service and usage charges can be shifted by agreement between the owner and tenant. Lease agreements in Dubai frequently stipulate that the tenant will bear some or all of the service charges, usage charges, and additional pass‑through operating costs, such as VAT on services and utilities. This is particularly common in commercial leases but is also seen in some residential contracts.
Even when the lease states the tenant must pay certain fees, the owner stays legally accountable to the project, the owners’ committee, and RERA for the payment of service and usage charges. Landlords and tenants should review the lease to understand who pays each component—base rent, service charges, master community charges, utilities, and VAT. Clear agreement reduces misunderstandings and supports both parties if disputes arise.
Shared Compliance With Building Rules
Law No. (6) of 2019 not only assigns payment responsibilities but also requires both owners and tenants to follow building and community rules. Regardless of who pays service charges, the owner and the tenant must adhere to the master community declaration, management rules, and any instructions from the owners’ committee or management entity. Compliance covers proper facility use, noise, alterations affecting common areas, and maintenance access.
The law also links financial compliance to governance rights. To sit on an owners’ committee in Dubai, an owner must be committed to paying service and usage charges and be up to date with these obligations. Owners in arrears generally cannot participate in the committee, ensuring that those overseeing the use of communal funds are themselves fulfilling their payment responsibilities. [[Responsibility matrix graphic showing: “Legal liability to project – Owner”; “May pay by agreement – Tenant”; “Must follow rules – Both”]]
A simple overview of responsibilities is set out below:
| Aspect | Owner | Tenant |
|---|---|---|
| Legal liability to project (RERA) | Always liable for approved service and usage charges | Not directly liable to project |
| Who may actually pay (by contract) | May pay directly or recharge tenant | May be required by lease to pay some/all charges |
| Compliance with community rules | Must comply | Must comply |
| Eligibility for owners’ committee | Must be an owner and up to date on charges | Not eligible (not an owner) |
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What Do Service Charges Cover and How Are They Set?
Service and usage charges are not arbitrary; they are based on budgets, reserve studies and regulatory approvals designed to match communal costs with the funds collected from owners. Understanding what is covered helps owners and tenants assess whether charges seem reasonable and properly authorised.
Common Areas, Utilities and Reserve (Sinking) Fund
Approved joint‑service charges typically cover all costs linked to the operation and upkeep of common parts of the property and its master community. This includes cleaning, security, landscaping, operation of lifts and mechanical systems, firefighting and safety systems, routine repairs in shared spaces, and utility consumption for common areas, such as lighting, landscaping and pool water, and district cooling or chiller charges for lobbies and corridors. Building insurance premiums and the management entity's and owners’ committee's administrative expenses are also included.
In addition to routine operating costs, owners pay annual reserve or sinking fund charges under Law No. (6) of 2019. These contributions are based on periodic reserve studies that forecast the cost and timing of major future repairs and replacements, such as façade refurbishment, replacement of chillers, lifts, or large pumps, and resurfacing of common‑area floors. The reserve fund is intended to avoid very large one‑off levies by spreading the cost of long‑term capital works over many years.
A typical breakdown of joint‑service charges might look like this:
| Component | Examples |
|---|---|
| Building service & maintenance | Cleaning, security, routine repairs in common areas |
| Common‑area utilities | Electricity, water, chiller/district cooling for shared spaces |
| Insurance | Building and common‑area insurance policies |
| Administration & management | Management company fees, administrative staff |
| Master community (usage) charges | Roads, landscaping, parks and shared master amenities |
| Reserve / sinking fund | Future major repairs and replacements |
RERA Approval, Audits and the Mollak System
Jointly owned property management companies must obtain RERA approval for their service‑charge budgets before any amounts are claimed from owners. The submitted budget sets out estimated costs for all relevant components, including usage charges and reserve contributions. If a management entity requests that owners pay service charges that have not been approved by RERA, the authority may take legal action against violators, and owners can challenge such demands.
RERA administers this framework through the Mollak system, an official e‑platform that regulates and monitors accounts related to Dubai building service charges. Management entities submit budgets for electronic approval, open RERA‑approved trust or escrow accounts for each community, and use Mollak to issue periodic service charge invoices to registered unit owners.
Statutory auditing offices approved by RERA audit service‑charge accounts, and management entities and owners’ committees must submit financial statements and audit reports through Mollak, enabling regulatory oversight of how funds are collected and spent.
Checking Approved Charges and Understanding VAT
Owners and other interested parties can verify approved service charges for their building or community through the DLD’s Service Charge Index e‑service or via the Dubai REST application. These tools allow users to search by project and year, helping them confirm whether the rates demanded on invoices align with RERA‑approved levels and providing a basis for informed discussions with management entities.
Regarding tax treatment, UAE VAT guidance on properties states that services such as building maintenance, owners’ association or jointly owned property management services, and utilities (electricity, water, gas and cooling) are generally subject to VAT at the standard rate of 5%.
As a result, relevant components of service and usage charges, as well as utility bills for common areas, may be subject to VAT. While the primary liability for common‑area service and usage charges lies with the owner under Law No. (6) of 2019, VAT and other pass‑through operating costs can be contractually passed to tenants depending on the terms of the lease.
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Paying, Arrears and Dispute Resolution
Once charges are approved and invoiced, owners must ensure they pay through the correct channels and on time. RERA’s systems are designed to make payments traceable and to manage arrears and disputes through defined procedures.
How Owners Receive and Pay Service Charge Invoices
Owners receive RERA‑approved service and usage charge invoices via the Mollak system, usually by email and sometimes via SMS links, depending on the contact details recorded for the unit. Each invoice sets out the amount due, a breakdown of components where applicable, the details of the regulated bank trust or escrow account into which payment must be made, and the management company’s email address for sending proof of payment or queries.
Service charges must be paid into these dedicated, RERA‑approved escrow or trust accounts opened for each jointly owned property community, rather than into general operating accounts. Owners can pay by depositing funds directly into the account stated on the invoice or by using Noqodi, the payment gateway linked to DLD systems, which supports wallet, credit card and net banking options via approved electronic channels. The escrow account details and management entity contact information printed on the Mollak service charge invoices provide the reference needed to ensure payments are properly allocated.
Consequences of Non‑Payment and the Role of Tayseer
Failure by an owner to pay approved service and usage charges results in the accumulation of debt against the unit. Persistent non‑payment can impair maintenance, disrupt service to common areas and strain relations between compliant owners and those in arrears. In serious cases of non‑payment, the matter may escalate to enforcement measures, including court proceedings that can ultimately result in the judicial sale of the unit to settle outstanding approved charges and related costs.
To reduce the financial burden on owners facing accumulated service‑fee debts and to limit the number of service‑fee disputes reaching the Rental Disputes Settlement Centre, RERA launched the Tayseer initiative on 24 March 2025.
Under Tayseer, eligible property owners with overdue service fees may agree on flexible payment plans, with a minimum duration of six months, coordinated between RERA and the jointly owned property management companies. The initiative aims to ease repayment, support the continued operation of real estate projects and improve the efficient use of service‑fee revenues.
Where to Take Disputes: Rental Disputes Settlement Centre
Disputes relating to service charges in Dubai buildings—including disagreements over the amount of approved charges, allocation between owners and tenants, or the use of funds for common areas—fall under the jurisdiction of the Rental Disputes Settlement Centre (RDC), rather than the general Dubai Courts. Law No. (6) of 2019 and subsequent arrangements give the RDC competence over jointly owned property disputes, including issues linked to service and usage charges and master community rules.
In service charge disputes, RERA‑approved invoices issued through Mollak are the primary reference point for determining what is lawfully due. Parties considering a case at the RDC should obtain copies of these invoices, any relevant Service Charge Index entries and correspondence with the management entity or owners’ committee. Attempting to resolve disagreements directly with the management entity or through the owners’ committee, using this documentation, is often the most efficient first step before resorting to formal proceedings.
Practical Checklist for Owners and Tenants
Ensuring that everyone understands their obligations before signing a lease or completing a sale reduces the chance of disputes later. The following checklists summarise what owners and tenants should verify regarding service and usage charges for jointly owned properties in Dubai.
For owners (current and prospective):
- Confirm that your building or community’s service and usage charges are RERA‑approved by checking the latest Mollak service charge invoices and, where necessary, cross‑checking rates through the Dubai service charge index or Dubai REST app.
- Check that the bank account on your invoice is a RERA‑approved Dubai service charge escrow account specific to your community, and always pay using the details printed on the invoice or the authorised Noqodi payment options.
- Review the breakdown of charges to understand how much is allocated to day‑to‑day operations versus the reserve or sinking fund, and monitor annual financial statements and audit reports submitted through Mollak to see how funds are used.
- If you are struggling to clear accumulated arrears, approach the management entity promptly to discuss whether you qualify for an overdue service fees payment plan under the Tayseer initiative, rather than allowing debts to accumulate unchecked.
- Keep your payments up to date to maintain your voting rights and eligibility to sit on the owners’ committee, which gives you a direct voice in how joint service charges for Dubai-owned property are budgeted and spent.
- When selling, ensure that all outstanding approved charges are settled or transparently disclosed, as unpaid service and usage charges may complicate transfer processes and negotiations with buyers.
For tenants:
- Before signing or renewing a lease, review the contract carefully to see whether you are required to pay any portion of the service and usage charges, master community charges, or other pass‑throughs such as VAT on common‑area services or utilities.
- Ask the landlord or their agent to confirm that the building’s RERA service charges in Dubai are approved, and, if necessary, request evidence via recent Mollak service charge invoices or public data from the Service Charge Index or Dubai REST.
- Clarify how and to whom you should pay any service‑related amounts: directly to the management entity (with invoices in your name) or to the landlord as a reimbursement, and keep written records and receipts of all such payments.
- Understand that even if you are paying service charges under the lease, the legal relationship with the project remains between the owner and the management entity, so any service disruptions or disputes should be jointly discussed with the landlord.
For both owners and tenants:
- Keep copies of all relevant documents: leases or sale contracts, RERA‑approved invoices, payment confirmations, correspondence about charges, and any agreed payment plans.
- Use official channels—Mollak, the Dubai REST service, and DLD enquiry lines—rather than informal sources when verifying amounts.
- If direct negotiation with the management entity or between landlord and tenant fails, consider obtaining independent advice or support from a licensed centre such as EGSH, which can help prepare and submit applications or documentation before escalating to the Rental Disputes Settlement Centre.
Carefully following these steps helps ensure that both parties understand their financial exposure and rights under the Dubai service charges law framework.
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FAQ
Who is responsible for service charges, the owner or tenant, in Dubai?
Under Dubai Law No. 6 of 2019, the unit owner is responsible for paying service and usage charges to the project. RERA treats owners as debtors for joint service charges. While a lease may require tenants to reimburse or pay these amounts, if tenants default, the management entity will still pursue the owner and, if necessary, take action against the property. Therefore, owners must monitor payment status, even where tenants are contractually obliged to pay.
What do service charges cover in Dubai buildings?
Service charges in Dubai buildings generally cover the management, operation, maintenance, and repair of common areas such as lobbies, corridors, lifts, parking, gyms, and pools, along with utilities consumed in those spaces, including chiller or district cooling. They also usually include building insurance, management entity administrative costs, master community usage charges, and annual reserve fund contributions for future major repairs. The exact scope is set out in the RERA‑approved budget and reflected in Mollak service charge invoices.
How are RERA service charges calculated in Dubai?
A jointly owned property management company prepares an annual service‑charge budget based on expected costs of operating and maintaining common areas and funding the reserve or sinking fund, often using reserve studies for long‑term planning. This budget is submitted through the Mollak system to RERA, which reviews and approves or adjusts it before any amounts can be levied on owners. Once approved, charges are apportioned among units, typically based on their share of the common area, and invoiced through Mollak, with accounts audited by RERA‑approved auditors.
How can I check approved service charges for my building in Dubai?
You can check approved common‑area charges for a specific project and year using the Dubai Land Department’s Service Charge Index e‑service or via the Dubai REST service charges section. These tools show the RERA‑approved rates for your building or community, which you can compare against the amounts on your Mollak service charge invoices. If there is a discrepancy, you should raise the issue with the management entity and, if necessary, seek clarification from RERA or support from a centre such as EGSH.
How do I pay Mollak service charges in Dubai safely?
Paying Mollak service charges in Dubai should always be done using details on the official RERA‑approved invoice, which specifies the community’s trust or escrow account and the management entity’s contact information. You may pay by direct bank transfer or deposit to that escrow account, or via Noqodi using wallet, credit card or net banking options linked through DLD’s authorised electronic channels. Always keep payment confirmations and share them with the management entity to ensure your account is correctly credited.
What happens if I do not pay service charges in Dubai?
If you do not pay approved service and usage charges, the unpaid amounts accumulate as a debt secured against your unit, potentially attracting late fees and legal costs. Persistent non‑payment can lead the management entity, with RERA’s support, to take enforcement actions that may culminate in proceedings at the Rental Disputes Settlement Centre and, in serious cases, judicial sale of the property to settle outstanding debts. Programmes such as the Tayseer initiative service fees Dubai scheme allow some owners in arrears to agree structured payment plans, which is usually preferable to facing enforcement.
Are service charges subject to VAT in Dubai?
Under UAE VAT guidance on the treatment of properties, building maintenance, owners’ association or jointly owned property services, and utilities such as electricity, water, gas, and cooling, these are generally subject to VAT at 5%. This means that relevant components of Dubai property maintenance charges for common areas and associated utility bills may be subject to VAT, increasing the total payable. Depending on the lease, landlords may contractually pass this VAT and other operating costs through to tenants, so both parties should check how tax is addressed in their agreements.
What are the three-year fixed service fees in Palm Jumeirah, and how do they help owners?
In December 2025, the Dubai Land Department collaborated with the Palm Jumeirah master community to approve three‑year fixed service fees, allowing the community’s management companies to obtain multi‑year budget approvals through Mollak instead of annual renewals. Fixing service fees for multiple years provides owners and investors with greater clarity and stability over future obligations, assisting with long‑term financial planning and reducing uncertainty about potential year‑to‑year fluctuations in Dubai jointly owned property service charges.
Reviewed by
Muneer Juma Al Balushi
Real Estate Registration Trustee Consultant
Muneer Juma Al Balushi has six years of experience in the real estate registration system of the Dubai Land Department. He specialises in accurate, secure, and legally compliant property registration.
This article is intended to provide general information based on official UAE sources, and does not constitute personalised legal advice. Before acting, applicants should verify the current rules and fees directly with the relevant authority or an authorised service centre.
