A senior government official has revealed that, as per the new Condominium Law, the property owners have been assigned the responsibility of levying service charge on freehold premises. Hence master developers will no longer be able to levy exorbitant service charges on freehold premises.
The Article No.22 of the Condominium Law (Law N0.27 of 2007) states "The owner of each unit shall pay to the Owners Association, his share of yearly service fee to cover the cost of management, maintenance, operation and repair of common parts."
This share will be defined on the basis of the area per unit, out of total area of joint property. The developer, irrespective of being main or subsidiary, will have to pay its share of fee for unsold units. No owner of any unit will be allowed to give up his share of common parts to avoid paying the yearly service fee, states the article.
At present, the master developers and property developers of individual towers who are developing major neighbourhoods in the freehold and leasehold areas in Dubai, are fixing and levying service charges at the rate of Dh.8 to Dh.12 per square feet, which is considered very high. This has led to conflict between home owners and master developers are freehold areas.
As there have not been any proper laws, some developers have levied even higher charges which have led to discontent of the buyers. With the new Condominium Law in place, the situation is expected to change for the better, as property buyers can dictate and fix service charges of their own premises, rather than depending on the developer.
The Condominium Law, which compliments the freehold Property Registration Law, is also expected to help facilities management sector and the maintenance firms, as it will open up freehold neighbourhoods for competition, which have been otherwise, so far, monopolized only by master developers.