DLD rolls out electronic system for service fee payments on Dubai properties

'Mollak' system targets co-owned properties in the emirate to ensure transparency and fairness

Villas are 12.1 per cent cheaper than they were in 2017 in Dubai. Pawan Singh / The National

Dubai Land Department unveiled an electronic system to regulate the payment of service fees between property owners and developers to ensure transparency and fairness in the sector.

The DLD, through its regulatory arm Real Estate Regulatory Authority, established "Mollak" (the Arabic word for owners), a system to monitors the payment of service charges in co-owned property projects – where owners are part of a wider development such as an apartment block or villa community – it said yesterday. Owners will now pay community service fees directly to the Mollak system, rather than to the developer. The system operates within the databases of the real estate unit owners and of property units registered and approved by DLD.

“Through the system, Rera seeks to increase the role of governance, regulation and supervision as well as the participation of private sector specialists to increase real estate transparency and maintain the balance between real estate developers, management companies and homeowners,” said Marwan bin Ghalita, chief executive of Rera.

The regulator started a pilot phase with management companies, auditors and financial institutions for the programme before officially rolling it out in the second quarter of the year, according to Mr Ghalita.

Through the Mollak system, 468 bank accounts were opened for project service charges while 88 management companies and 1,212 real estate projects were registered and approved by Rera. This is in addition to 200,000 real estate units listed, comprising residential apartments, villas, offices and commercial shops.

Rera agreed with seven banks to act as account trustees for co-owned properties and registered eight financial auditors to audit the application fees submitted for accreditation.

Rera additionally issues electronic approvals for service charges to real estate unit owners who also receive unified bills for service charges across the system. It compels management companies to explicitly submit bills through the system to provide protection for service-fee claims made by real estate owners.

The system works within the database of DLD, Rera, financial institutions and certified auditors registered with Rera, as well as co-owned property management companies registered with the authority.

It enforces comprehensive regulatory governance on a co-owned property management company licensed and registered with Rera, requiring it to upload financial statements and copies of maintenance, service and other supplier contracts for common real estate services, Rera said.

The financial auditor then verifies these statements and contracts according to the criteria adopted by the authority, which then reviews the completion of the transaction audit. Real estate unit owners are notified electronically of a unit's service fees with the publication of fee approval data in the service and maintenance fees index on DLD's website.

The management company then requests owners to pay the services fees through the Mollak system, and sends the service-fee invoices in accordance with the amounts approved by Rera.