Service fees name and shame campaign 'illegal'

Developers and owners' associations who use 'name and shame' lists to get owners to pay their outstanding service fees are breaking the law, experts say.
Some developers and owners' associations in Dubai have displayed notices in their buildings to recover outstanding maintenance fees, a practice described by experts as against defamation laws.
Some developers and owners' associations in Dubai have displayed notices in their buildings to recover outstanding maintenance fees, a practice described by experts as against defamation laws.

DUBAI // Property owners are posting "name and shame" lists in their buildings to pressurise fellow owners to pay outstanding service fees - a practice they say is a necessary last resort but others claim may be breaking the law.

The notices have been displayed on noticeboards in lobbies in The Greens and other developments managed by Emaar. They also have been posted in Jumeirah Lakes Towers and the Marina.

Annual service charges cover essential maintenance costs, such as fixing lifts, cleaning pools and hiring security. Alternate recourse - phoning owners to get them to pay or turning to the authorities - often proves ineffective, supporters of the campaign said.

However, some say the practice does not work and may go against the anti-defamation law.

"Legally, they don't have a right to put it up," said Ali Al Jarman, the managing partner at Prestige Advocates. "They should not put it beside the lift or on the main gate for the public to see."

Comments about the "name and shame" campaign come shortly after a British resident was recently forced to disable his name-and-shame website and Twitter page.

He was told the concept was illegal under libel law.

He had hoped to set up a database of complaints against companies, to improve the level of customer service in Dubai, but police and lawyers confirmed the concept was illegal.

No 372 of the Penal Code, Federal Law (3) of 1987, states: "Whoever attributes to another person by any means of publicity, an incident which makes him liable to punishment or contempt, shall be punished by detention for a period not exceeding two years or by a fine not exceeding Dh20,000."

Even if the sign is posted in a spot closed to the general public - for example, in a hallway blocked by security guards - it is still public in that all tenants can pass by it, said Mr Al Jarman.

"It means that anybody - more than two - can see it."

Yousef Al Bahar, an advocate with Bahar and Associates, agreed. He also stressed that owners had understandable grievances over service charges.

Some owners refuse to pay them, arguing that the rates charged by developers are too high and not transparent, although in some buildings, owners associations have been set up to oversee the fees.

Other owners live outside the UAE and are unaware, while some are simply unable to pay. Posting a "name and shame" list would not necessarily persuade these owners to do so.

Ideally, said Mr Al Bahar, these disputes, along with issues of non-payment, should be brought to Dubai's Real Estate Regulatory Authority (Rera). But he acknowledged that Rera is already swamped with cases.

And because owners associations lack proper legal status, they are unable to file lawsuits - which can in any case be costly and uncertain.

At one building in the Marina, the owners association posted a list for a few months in 2009 before their legal consultant advised them to take it down.

By the time, almost all of the 20 delinquent owners paid, said association boardmember Iyad Charchar. For the remaining few, they had no legal recourse so cut off their access card to the building.

Developers and owners associations like Mr Charchar's say they use such lists after exhausting other options and for the benefit of the community.

Emaar said it also consults with the owners associations and relevant officials.

"In line with the recommendation of the interim boards of the owners associations, and following appropriate reviews by concerned authorities, lists of the people who default in paying service fees are put up in community noticeboards," a spokesman said.

"This follows only after all possible efforts to contact the homeowner have been made."

The spokesman did not say how effective such lists were in improving collection.

Adnan Khan, a board member of the owners association at a building in Jumeirah Lakes Towers, said that within two months of posting a list, collection jumped from 30 per cent to 90 per cent. The notice prompted tenants to alert their landlords who lived overseas, he said.

It only stated apartment numbers, no names or amounts, he said.

"We didn't name the owners nor say anything slanderous or inflammatory," he said. "I can't comment on other buildings' lists and how they are worded, but we felt fine with ours."

Mr Khan acknowledged that owners in his tower might be more willing to pay because of their transparent budget, which is overseen by the owners association and independently audited.

That is the most effective way to ensure payment, said Alistair McCracken, the head of Novus Community Management, which works with two dozen owners associations.

Novus does not encourage "name and shame" lists, he said. But given the lack of transparency in many cases, owners' distrust of developers, and owners associations' lack of other options, he said he understood why some buildings used them.

"It comes out of a sense of frustration with the difficulties of collecting here," he said. "A 'name and shame' list might be a flawed process. The question is, what other choice is there?"

*Article amended on August 17 to reflect change in paragraph 6. The Twitter account set up to highlight poor customer service was opened after posters were used to name tenants with outstanding fees, not before.

Published: August 17, 2011 04:00 AM


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