RDC Clarifies: Who Pays Service Charges Before Handover?
Dubai has taken a major step to resolve one of the most common disputes in real estate, who pays property service charges before a unit is officially handed over. A new ruling from the Dubai Rental Disputes Center (RDC) confirms that buyers must pay service fees even before handover if the delay is caused by their own actions, such as missed payments or incomplete paperwork.
This legal principle aims to close long-standing gaps and ensure continuous building maintenance, financial fairness, and clear accountability between buyers and developers.
Why This Ruling Matters
Until now, many property owners and developers were uncertain about who was responsible for service fees during delayed handovers. Developers often continued operating and maintaining shared facilities without reimbursement, while buyers argued that they shouldn’t pay before taking possession.
The RDC has now clarified that if a buyer’s name appears in the preliminary property register, they are responsible for paying service charges from the project’s completion date or from the moment they defaulted on payments, whichever comes first.
This means that even if the final ownership transfer has not been completed, the buyer remains liable for maintenance costs, as their property is already part of the completed building’s shared ownership structure.
Legal Foundation and Fairness
The decision is rooted in Law No. (6) of 2019 on Jointly Owned Properties, which regulates the management and operation of shared real estate developments across Dubai. Under this law, either the developer or the registered owner must bear service charges to cover the management, operation, and maintenance of common areas.
By interpreting the law’s intent, the RDC has strengthened Dubai’s legal framework, ensuring that building services remain uninterrupted and that compliant owners are not unfairly burdened by others’ delays.
Judge Abdulqader Mousa Mohammed, President of the RDC, stated:
“Holding defaulting buyers accountable for service charges aligns with the spirit of the legislation. This ruling eliminates confusion, reinforces fairness, and ensures the smooth operation of jointly owned properties.”
Impact on Property Owners and Developers
This ruling brings greater legal clarity and market stability, particularly for jointly owned developments across Dubai and the wider UAE. For developers, it guarantees steady funding to maintain high-quality facilities. For owners, it ensures that all residents contribute fairly, preventing disruptions in essential building services.
The RDC continues to play a crucial role in streamlining dispute resolution. In 2024, the center closed 49,817 execution files related to joint ownership. It also finalized 443 reconciliation agreements worth AED 190.7 million, with an average settlement period of just six days; showcasing Dubai’s efficiency in resolving property-related issues.
Reinforcing Investor Confidence
This new legal precedent strengthens Dubai’s reputation as one of the world’s most transparent and investor-friendly real estate markets. By closing this legislative gap, the ruling enhances investor confidence, supports service providers, and ensures long-term value for both developers and property owners.
In short, this update ensures that every stakeholder contributes fairly, that buildings operate smoothly, and that Dubai’s property market remains stable, transparent, and globally competitive.
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