Nicholas Wallwork
Editor-in-Chief
Staff member
Premium Member
High property service charges along with falling rental values is impacting yields and putting off r
- Status
G
georgihh
New Member
Nobody should pay service charges if they are not in order simple as that. Paying the inflated service charges brings disaster. Stop paying the charges and they will adjust them.Authorities in Dubai need to address problem of high property service charges, consultants warn such charges that are imposed by developers are a major talking point and need to be addressed*by the Real Estate Regulatory Authority (RERA) to help confidence in the market, according to a*report from international consultants CB Richard Ellis.
Click Here to Read The Full Story and Add your Own Comments to High property service charges along with falling rental values is impacting yields and putting off real estate investors in Dubai, it is claimed.
W
Wannaberich
New Member
The service charges in Dubai are a joke.Discovery Gardens for example I believe is around 21dhs per sq ft.So for a typical 1 bed unit of around 1000 sq ft thats 21.000dhs for a unit which you will only get around 50k rent.Thats a joke.
F
financier888
New Member
solution is simple... maybe
This issue has been s a chronic problem and needs to be addressed in earnest. Of course, officialdom will tell you - FORM AN OWNERS ASSOCIATION - which allows the owners to take control of the management and thus, the costs. However, with many of the owners not living in the country, it's not easy.
In many countries with a more evolved market and rule of law, this issue is addressed as such : (I will use New York City as an example)
RERA SHOULD CONSIDER THIS
In NYC, if you are a developer and plan to sell condo's you must file an offering plan for approval BEFORE you sell. In that plan, you provide a schedule of expenses which justifies the maintenance costs. Those include operational expenses to maintain the property and usually a 5% fee for the management company. (which is reasonable)
When the developer files this schedule as part of his offering plan, the aforementioned budget MUST be certified by an independent third party and the third party that certifies the budget can be held liable if there are misrepresentations. (including losing your RE license and civil damages)
This allows the buyer full disclosure upfront as the common charges which are critical in the overall valuation of the investment. During the boom, investors didn't care as they had no intention of holding long term - this is no longer the case and the paradigm must shift to meet new market conditions.
A prudent developer should be addressing this issue but sadly, most do not care and will gouge your accordingly. To date, your only recourse will be to form the owners association forthwith and take control which you are entitled to and encouraged to do under law. (strata laws)
RERA could undertake the necessary reforms but as we all know, they have fell painfully short in properly enforcing and protecting investors they were mandated to do and their inaction and inefficiency has eroded the Dubai brand for years to come.
FORM your own association and take control - it's your money and there are some good firms that specialize in it and will assist you. Don't hold you breath waiting for the gov't/ to assist you any more than they already have.
This issue has been s a chronic problem and needs to be addressed in earnest. Of course, officialdom will tell you - FORM AN OWNERS ASSOCIATION - which allows the owners to take control of the management and thus, the costs. However, with many of the owners not living in the country, it's not easy.
In many countries with a more evolved market and rule of law, this issue is addressed as such : (I will use New York City as an example)
RERA SHOULD CONSIDER THIS
In NYC, if you are a developer and plan to sell condo's you must file an offering plan for approval BEFORE you sell. In that plan, you provide a schedule of expenses which justifies the maintenance costs. Those include operational expenses to maintain the property and usually a 5% fee for the management company. (which is reasonable)
When the developer files this schedule as part of his offering plan, the aforementioned budget MUST be certified by an independent third party and the third party that certifies the budget can be held liable if there are misrepresentations. (including losing your RE license and civil damages)
This allows the buyer full disclosure upfront as the common charges which are critical in the overall valuation of the investment. During the boom, investors didn't care as they had no intention of holding long term - this is no longer the case and the paradigm must shift to meet new market conditions.
A prudent developer should be addressing this issue but sadly, most do not care and will gouge your accordingly. To date, your only recourse will be to form the owners association forthwith and take control which you are entitled to and encouraged to do under law. (strata laws)
RERA could undertake the necessary reforms but as we all know, they have fell painfully short in properly enforcing and protecting investors they were mandated to do and their inaction and inefficiency has eroded the Dubai brand for years to come.
FORM your own association and take control - it's your money and there are some good firms that specialize in it and will assist you. Don't hold you breath waiting for the gov't/ to assist you any more than they already have.
R
Roshan
New Member
Since a developer cannot sell, he now makes money from maintenance charges. When most of the apartments are leased by owners, where is the question of forming a strong association.
The developer knows that the chances of an association to be formed are remote. So he still abides by the rules by calling for a meeting but knows nothing will come out of it.
So...he gets to have the cake and eat it too.
Roshan
The developer knows that the chances of an association to be formed are remote. So he still abides by the rules by calling for a meeting but knows nothing will come out of it.
So...he gets to have the cake and eat it too.
Roshan
- Status
