Service fees 'should be better directed in towers'

DUBAI // Thirty-eight per cent of service fees in residential towers goes towards utilities, a cost that could easily be reduced, experts say of a preliminary report on rates.

Another 39 per cent goes to maintenance, the Middle East Facility Management Association (Mefma) found in a survey of 34 buildings.

Nine per cent of fees go to management services, 6 per cent each to master community fees and a "reserve fund" for long-term upkeep, and 2 per cent to insurance.

"This is one of the fundamentals. We can do a lot of energy-saving," said the Memfa board member Ali Al Suwaidi of the report's findings.

"If you do proper preventive maintenance to your air conditioning … and you've designed the air-conditioning capacity to be what you need, not more, it will always bring the utilities cost down."

District cooling systems, which supply entire communities, should trim costs, Mr Al Suwaidi noted. But some providers had overestimated demand and installed excess equipment, then passed those costs on to owners.

"It's happening in certain developments that the air conditioning is over-designed," he said.

Simple steps such as raising the temperature in lobbies and keeping doors shut would also reduce costs, said Alastair McCracken, the chief executive of Novus Community Management, which helps owners associations manage their properties.

"It's clearly the single most controllable cost," Mr McCracken said.

The savings from utilities should go towards raising reserve funds to 15 per cent of the budget, he said, to allow for infrequent but major costs such as replacing lifts and refinishing pools.

Mefma plans to conduct wider surveys in the coming years for a stronger basis of comparison.


Director: Inas Halabi

Starring: Nijmeh Hamdan, Kamal Kayouf, Sheikh Najib Alou

Rating: 4/5

Company Profile

Name: Direct Debit System
Started: Sept 2017
Based: UAE with a subsidiary in the UK
Industry: FinTech
Funding: Undisclosed
Investors: Elaine Jones
Number of employees: 8

Zakat definitions

Zakat: an Arabic word meaning ‘to cleanse’ or ‘purification’.

Nisab: the minimum amount that a Muslim must have before being obliged to pay zakat. Traditionally, the nisab threshold was 87.48 grams of gold, or 612.36 grams of silver. The monetary value of the nisab therefore varies by current prices and currencies.

Zakat Al Mal: the ‘cleansing’ of wealth, as one of the five pillars of Islam; a spiritual duty for all Muslims meeting the ‘nisab’ wealth criteria in a lunar year, to pay 2.5 per cent of their wealth in alms to the deserving and needy.

Zakat Al Fitr: a donation to charity given during Ramadan, before Eid Al Fitr, in the form of food. Every adult Muslim who possesses food in excess of the needs of themselves and their family must pay two qadahs (an old measure just over 2 kilograms) of flour, wheat, barley or rice from each person in a household, as a minimum.

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On sale: Now
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Our legal consultant

Name: Dr Hassan Mohsen Elhais

Position: legal consultant with Al Rowaad Advocates and Legal Consultants.

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