The Real Estate Regulatory Agency in Dubai has lunched a service and maintenance charge index for freehold areas at the popular technology show GITEX 2014. It includes buildings in more than twenty major developments and will determine the service charges and fees for each project.
Dubai’s Real Estate Regulatory Agency (RERA), which is the regulatory body of Dubai Land Department, said it had been planning the introduction of the new index since 2012. This is an addition to the rental price index and will be used to calculate the different service and maintenance charges, which are needed to be paid in the different areas of the city. Also, the index will determine the service fees of each building and every owner, landlord or tenant will be able to access this information easily through the website of Dubai Land Department.
The service charge index will be applied to common spaces and service areas and will be calculated by a formula dirhams per sq.ft. – services, maintenance, DEWA utilities, management, insurance, master community fee, as well as a sinking fund fee. It will be managed by owners associations and property developers, but audited by and approved by RERA. Also, the index is divided into four major categories of property – apartments, villas, offices, and shops.
According to the RERA announcement, made at GITEX Technology Week 2014, the index currently includes details about 300 individual buildings located in 22 developments, including Jumeirah Beach Residence, Jumeirah Lake Towers, The Palm Jumeirah, Dubai Marina, Business Bay, Silicon Oasis, International City, Motor City and others. Soon, the index is expected to feature all the rest of the developments in the urban areas.
But even in its initial phase when it’s not covering the entire Dubai, the index reveals huge differences in the service charges across developments, ranging from AED 8 per sq. ft. to more than AED 20 per sq. ft. in some buildings.
Current tenants can’t do much about changing their service charges, but the index will be useful for those looking to rent or buy a new home. It’s important to note that, at least for now, RERA won’t use the index to regulate service charges.
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