Top 10 things every buyer should know about service charges in Dubai

Service charges are the cost buyers most often underestimate and sellers most often stay quiet about. They are annual, they recur for as long as you own, and they vary enormously between buildings. A low purchase price paired with a high service charge can be a worse deal than a higher price in a well-run building. Here are ten things to understand before you commit.

1. They are charged per square foot, per year

Service charges in Dubai are usually expressed as a rate per square foot applied to your unit's size, billed annually. Knowing the rate and your size lets you calculate the real yearly cost, which is the number that actually affects you.

2. They vary hugely between buildings

Two units at the same price in different buildings can carry very different service charges. There is no single standard rate, so never assume, always ask for the specific figure for the specific building.

3. They fund real things

The charge pays for maintenance of shared areas, security, cleaning, cooling infrastructure, lifts, pools, gyms, and the reserve fund for major future works. More amenities generally means a higher charge, which is a trade-off, not automatically a bad thing.

4. A very low charge can be a warning

An unusually low service charge is not always good news. It can mean deferred maintenance or an underfunded reserve, which stores up larger bills later. Sustainably run buildings cost something to run.

5. The reserve fund matters

Part of the charge should go into a reserve fund for big future works like facade repairs or lift replacement. A healthy reserve protects you from sudden special assessments. Ask whether one exists and whether it is adequately funded.

6. Charges are regulated and published

Owners associations set and justify service charges under a regulated framework, and approved budgets are recorded. This means you can ask to see the approved figure rather than relying on a rough estimate.

7. Mollak governs how they are collected

Service charge collection for many communities runs through a regulated system that holds funds and oversees how they are spent. It exists to bring transparency and accountability to where your money goes, and you can ask how your building sits within it.

8. Arrears can follow the unit

If the previous owner left unpaid service charges, that debt can attach to the property and complicate or block your transfer. Ask for a clearance or up to date statement before you buy, so you do not inherit someone else's bill.

9. They directly affect your yield

For a buy-to-let, service charges are one of the biggest gaps between gross and net return. A headline rental yield means little until the annual charge is subtracted. Always run the net number, not just the gross.

10. They can rise over time

Service charges are not fixed forever. They can increase as a building ages or as costs rise. Budget with some room for that, rather than assuming today's figure is permanent.

Service charges reward the buyer who asks early and reads the statement. They are not a reason to avoid a building, they are a number to factor into the true cost of owning it. A well-run building with a fair charge and a healthy reserve is often the safer long-term home for your money.

This is general guidance, not legal or financial advice, and specific figures vary by building. Distressly reviews the documents behind every listing before it publishes, so the service charge picture is part of what has already been checked.