Dubai Ruling: Property Buyers Must Pay Service Charges Even Before Handover
In a significant update to Dubai’s real estate regulations, the Dubai Rental Disputes Center has clarified that property owners are legally responsible for service charges even if they have not yet taken possession of their units—particularly in cases where the delay in handover is due to the buyer’s actions.
⚖️ New Legal Precedent to Resolve Developer-Owner Disputes
This judicial principle, announced recently by the General Authority for Unifying Principles within the Center, aims to address a recurring grey area in property ownership: Who pays the service charges when a unit is completed but not yet officially handed over?
The ruling stems from disputes involving properties sold on installment plans. In some of these cases, buyers had completed payments but failed to register ownership or settle remaining dues. As a result, developers withheld handover—and a legal vacuum emerged over who was responsible for shared facility fees.
Now, a clear answer has been provided: The party listed in the preliminary ownership register is liable for service fees from either the project’s completion date or the moment a payment default occurs.
🏢 Why This Matters
This ruling helps ensure continuous operation and maintenance of shared areas in jointly owned properties—such as lobbies, gyms, parking structures, and pools—by clarifying cost responsibilities. It also protects developers and compliant owners from shouldering the financial burden caused by non-paying buyers.
The clarification is grounded in Law No. (6) of 2019 concerning Jointly Owned Properties in Dubai, which outlines that either the developer or unit owner must pay service fees for any unsold or undelivered units. These funds are vital for the day-to-day management and upkeep of residential communities.
👨⚖️ A Message from the Rental Disputes Center
Judge Abdulqader Mousa Mohammed, President of the Rental Disputes Center, emphasized that the interpretation fills a crucial legislative gap and brings greater legal certainty to Dubai’s property market.
“Holding buyers accountable for service charges—even before formal handover—upholds the spirit of the law. This ensures the financial stability of jointly owned properties and uninterrupted services for all residents,” said Judge Mohammed.
“The new ruling also sets a practical legal precedent that promotes transparency, reduces confusion, and reinforces confidence among investors and developers.”
📊 Real Estate Dispute Statistics (2024 Highlights)
49,817 execution files were resolved by the Dubai Rental Disputes Center related to jointly owned properties.
443 reconciliation agreements were finalized in Q2 alone, representing a total value of AED 190.7 million.
The average dispute settlement time was just six days, demonstrating the system’s efficiency and commitment to swift justice.
✅ Key Takeaways for Property Buyers & Investors
You may be liable for service charges before official handover if your name appears in the preliminary registry.
Service charges begin from the project’s completion date or the date of default on payment obligations.
Stay compliant with your payment schedule to avoid penalties or delays in handover.
Dubai authorities are committed to fair, fast, and transparent resolution of real estate disputes.
📌 Conclusion
This ruling is another step forward in strengthening Dubai’s real estate legal framework and protecting the integrity of its property sector. By assigning clear financial responsibilities, the Rental Disputes Center ensures developers can continue maintaining quality standards—while buyers are encouraged to fulfill their commitments promptly.
For property investors, this clarity boosts confidence and reduces legal ambiguity, further positioning Dubai as one of the most transparent and investor-friendly property markets in the world.
