Non-payment of municipality fees risks disconnection of utilities, legal charges

The Department of Municipal Affairs and Transport stresses the importance of paying the 3 per cent fee on expat tenancy contracts to avoid disconnection of water and electricity services.

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Abu Dhabi’s Department of Municipal Affairs and Transport has urged expatriate tenants liable for the new 3 per cent municipality fee to avoid any failure in paying the charge or risk their utility supplies being disconnected.

The department issued its first public statement on the new charge on Thursday, which said: “The Department stresses the importance of paying registration fees of tenancy contracts to avoid legal consequences arising from the failure to pay the prescribed fees, and the disconnection of water and electricity services, as this fee is crucial for the running of said services.”

It reiterated that the fee would equate to 3 per cent of the amount a tenant pays on a rental contract.

Unless municipal fees are paid, Adwea will not issue clearance certificates to tenants. Adwea has a responsibility to follow up complaints and enquiries submitted to the Abu Dhabi Government call centre. Complaints about the details of tenancy contracts on which bill amounts are worked out should be addressed to the relevant local municipality.

Customers can pay the entire fee in one lump sum if they prefer, and if rent contracts are then retroactively cancelled or annulled they would be entitled to recover fees they had paid.

“All parties of the tenancy agreement are urged to register their tenancy contracts to ensure an effective and continuous supply of government services,” it said.


Abu Dhabi municipality tax

The new municipality fee payable by every expatriate tenant in Abu Dhabi has begun appearing in water and electricity bills from Abu Dhabi Distribution Company. Delores Johnson / The National

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A survey compiled by the Abu Dhabi-based digital media analyst Locus Elite found that 22 per cent of expats commenting on the introduction of the charge said they were considering leaving the emirate because of increasing costs.

The company, which has vetted comments made on Twitter, Facebook and other online forums over the past couple of days, screening out more frivolous remarks, found that 18 per cent of over 200 commenters argued that they felt backdating charges was unfair, and that 16 per cent felt that landlords, rather than tenants, should pay fees.

Meanwhile, those considering asking employers for a raise to offset their higher costs are unlikely to find themselves in a strong negotiating position.

Chris Greaves, the Arabian Gulf region managing director for the recruiter Hays, said that it does not have concrete statistics on Abu Dhabi’s job market, but said “anecdotally, we have noticed a decrease in hiring volumes” as government organisations have pared back costs in response to lower oil revenue.

“Organisations have the upper hand when setting salary rates,” said Mr Greaves. “The vast supply of available candidates in the region means that employers can be selective with the remuneration they offer.”

However, he also pointed out that in its 2017 Salary and Employment survey, which is due to be published later this month, living costs were not cited as a significant factor.

“Of the 61 per cent of employees who expect a salary change in the next 12 months, only 9 per cent believe the change is not enough as a result of the cost of living. This is in contrast to 27 per cent of those surveyed last year,” he said.

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