UAE Property: ‘Can I be charged service fees for an off-plan unit?’

The obligation to pay service charges applies once a person obtains possession of their property, not before. Getty Images

Question: I purchased a townhouse off-plan in Dubai South in 2021. The keys were handed over in October this year, but I was surprised to receive a service charge invoice covering the entire year of 2023, even though I only took possession recently.

The developer says service charges are applied “from the moment the community becomes operational”, not from handover. I don’t think it’s fair to pay for a full year when I was not even allowed to access the property. What is the usual practice in Dubai and do I have any grounds to challenge this? ES, Dubai

Answer: This is a situation many new owners find themselves in, particularly in large master communities where different phases become operational at different times.

In Dubai, service charges are governed by the Real Estate Regulatory Authority and the key principle is this: the obligation to pay service charges applies once you obtain possession of the property, not before.

There is only one meaningful legal trigger and that is the snagging/handover notice, which indicates that the unit is ready and the owner can take possession. Until that date, the developer is responsible for maintaining the building and the community, even if other owners have moved in earlier phases.

Developers will sometimes issue retrospective invoices because they argue the cost of running early infrastructure must be shared proportionally but this is a commercial stance, not a legal one. You are, therefore, within your rights to challenge the charges before your handover date.

In this instance, my advice would be to request a breakdown of the billing period, check the owners’ association budget approved by the Rera and look for evidence showing the date your unit was deemed “ready for possession”.

If the developer insists, you may request the Rera’s intervention but in most cases, I'm sure the developer will see your point of view and you should pay only from the official handover date forward.

Q: I rented an apartment from a company in Abu Dhabi’s Reem Island and paid a security deposit of Dh3,600 ($980). Upon leaving, about nine years later, I presented them with the deposit receipt but the company has not returned my money, saying that their accounts show no relevant records and they may not be able to return my deposit due to internal restructuring.

The apartment was handed over to them in perfect condition. I have been trying for a year now but calls have not been successful. I have even requested a letter from them stating they will be unable to pay me, so that I may take it to the judicial department but they have not responded. Do you have any suggestions? FI, Abu Dhabi

A: Unfortunately, this is a situation I hear about from time to time, not just in Abu Dhabi but particularly with long tenancies where records may have changed hands or companies have restructured.

However, the key point is very simple. Your security deposit is legally your money and the passage of time does not remove the landlord's obligation to return it.

All security deposits must be refunded once a tenant vacates the property and returns it in good condition, which you have done. A company cannot refuse the refund simply because their internal records are incomplete or because departments have been reorganised. Those are internal operational issues, not legal grounds to deny your claim.

Since you have the original receipt, this becomes a straightforward matter of proving payment. The law tends to favour documentary evidence, and a receipt is the strongest proof of all.

At this stage, because you have already attempted to resolve the matter informally for a year, I suggest the following steps.

Here's what Dh1 million gets you in Dubai's property market today

03:49

Send a final written notice (email and registered mail if possible) addressed to the company’s general manager or chief executive. In that communication, state clearly that unless the deposit is refunded within five working days, you will file a case with the Abu Dhabi Rent Dispute Settlement Committee (RDSC). Make sure you keep all correspondence, including your receipt, the move-out report and screenshots or evidence of previous communication attempts. If there is no response, open a case at the RDSC.

These cases are usually straightforward and the committee generally rules in favour of the tenant when proof of payment is provided. The company will be instructed to refund your deposit and in some cases, may be ordered to pay additional administrative costs due to the length of time involved.

You do not need a letter from the company stating that they cannot pay you. That is not a legal requirement and it is common for companies to try to stall proceedings by shifting blame. The RDSC should be able to proceed based on your evidence alone.

I wouldn't wait any longer, act now. A year is far too long to wait and the committee is there precisely to handle matters like this. Once you file, you are very likely to see the matter resolved relatively quickly.

The opinions expressed do not constitute legal advice and are provided for information only. Please send any questions to [e-mail]