New ruling: Owners liable for fees even without property handover in Dubai
Nearly 50,000 execution files closed on service fee disputes
DUBAI – Dubai’s Rental Disputes Center (RDC) has introduced a new legal principle addressing disputes between property owners and developers over responsibility for service charges in jointly owned buildings.
The ruling requires owners to pay service fees even if they have not formally taken possession of their property, provided the delay in handover is due to the buyer. This interpretation, rooted in Law No. (6) of 2019 on Jointly Owned Properties, is designed to ensure uninterrupted services and continuous maintenance of shared facilities.
The decision follows recurring disputes in situations where units were sold through instalments, construction was complete, but buyers had not finalised payments or registration. Developers often withheld delivery until dues were settled, sparking confusion over who should bear the cost of keeping essential building services operational.
What does the law say?
Law No. (6) of 2019 stipulates that either the developer or the owner must cover service charges for unsold or undelivered units. These charges fund the management, operation, and upkeep of shared spaces within jointly owned properties. While the law was generally clear, an unusual scenario emerged when buyers had completed instalment payments but had not yet been officially registered as owners.
To close this gap, the matter was referred to the General Authority for Unifying Principles within the RDC. After a comprehensive review, the Authority concluded that buyers whose names appear in the preliminary register of the residential unit are responsible for service charges from the date of project completion or from the moment they default on payments, even before formal ownership transfer.
How will this ruling help?
According to Judge Abdulqader Mousa Mohammed, President of the RDC, the new interpretation removes legislative ambiguity and ensures stability in jointly owned properties. By obligating buyers to cover service charges, the decision guarantees that essential facilities remain operational, developers are not unfairly burdened, and compliant owners are protected.
Judge Abdulqader stated: “The General Authority has addressed this legislative gap by interpreting the law’s underlying intent to secure the stability of jointly owned properties and guarantee the uninterrupted provision of essential services. Holding defaulting buyers accountable for service charges aligns with the spirit of the legislation. By doing so, we have established a clear judicial precedent that eliminates confusion, strengthens practical approach, and reaffirms our commitment to justice and fair dispute resolution.”
The ruling comes as the RDC reports significant achievements in 2024, including the closure of 49,817 execution files related to jointly owned properties. The Centre also launched its self-execution service for service fee claims, enabling property management companies to submit cases directly. This digital mechanism speeds up processing, ensures smoother collection of charges, and contributes to the uninterrupted management of building services.