Service Charges in Dubai: Who Sets Them, Where the Money Sits, and What You Can Actually Challenge

A buyer works out that an apartment yields 7%. They have used the rent and the purchase price. They have not used the service charge.

On a 1,000 square foot apartment in a well-serviced tower, the service charge can be AED 20,000 a year. Against a rent of AED 110,000 that is most of two months' income, and the yield was never 7%.

This is the single most commonly omitted number in Dubai property arithmetic, and it is also the one owners understand least well. It is not a fee the building manager invents. It is an approved budget, audited, held in a supervised account, and published — and an owner who knows how the approval works has real recourse when the figure looks wrong.

The Rate Is Not Set by Your Building Manager

Jointly owned property in Dubai runs under Law No. 6 of 2019. Under it, a management company approved by the Real Estate Regulatory Agency runs the common areas, and the annual service charge budget it proposes is not its decision to make.

The budget goes to RERA. A certified audit firm verifies it. RERA can approve it, adjust it, or reject it. Only then can invoices be issued, and the approved figure is the only figure lawfully due.

That single fact changes the nature of a dispute. You are not arguing with a landlord about what they feel the building costs. You are checking an invoice against a number a regulator signed off, and those two things can be compared.

Mollak: Where the Money Sits

Mollak is the Land Department system that runs the whole process. It approves budgets, issues the RERA-approved invoices, and supervises the escrow accounts that hold what owners pay.

The escrow point matters more than it sounds. Service charge money is not the management company's money and it does not sit in the management company's account. It sits in a supervised account for that property, and it can only be spent against the approved budget. A management company that wants to spend differently has to go back through the approval, not simply reallocate.

Owners see their own invoices and the approved rates through the Mollak portal or the Dubai REST app. If an invoice did not come through Mollak, that is the first question to ask about it.

What the Per-Square-Foot Figure Buys

The charge is levied per square foot of your unit per year, and the budget behind it usually breaks into:

• General fund, covering day-to-day running: security, cleaning, common-area electricity and water, lifts, landscaping, pest control, insurance and the management fee.
• Reserve fund, a mandatory contribution towards major capital works later on.
• Master community charge, where the building sits inside a wider master development with its own roads, parks and infrastructure.
• Cooling, where district cooling capacity charges are collected through the building rather than billed to the unit.

Two buildings with identical rates can therefore be buying quite different things, which is why comparing rates without comparing what is in them tells you little.

The Reserve Fund Is the Part Worth Understanding

RERA requires a reserve contribution in every approved budget. It funds lift replacement, facade works, fire system upgrades, roof and waterproofing works — the things that arrive once a decade and cost more than a year's running budget.

An owner looking only at the headline rate will see a well-funded reserve as waste. It is the opposite. A building with a thin reserve is a building where a special levy is coming, and a special levy lands on whoever owns the unit on the day it falls due. When you are comparing two towers, the one with the lower rate and the underfunded reserve is the more expensive building; the bill simply has not arrived yet.

What It Costs, Broadly

Rates vary more by building than by district, but the ranges give useful orientation:

A high rate is not automatically bad value. A tower with a large pool deck, a full gym, concierge cover, extensive landscaping and a chilled-water plant costs more to run than a simple block, and the owners are buying something for it. What is bad value is a high rate in a building that does not obviously spend it, and that is a comparison the index makes possible.

Checking the Approved Rate for Any Project

The Land Department publishes a Service Charge Index. Query it by project name, usage type and year, and it returns the approved rate, free, immediately, through the DLD website or the Dubai REST app.

Two ways to use it. Before buying, look up the building and put the real figure into the yield, rather than the number in the brochure. After buying, compare the invoice against the approved rate for the year — if they disagree, you have a specific, documented discrepancy rather than a feeling.

When the Invoice Looks Wrong

The escalation runs in three steps, and skipping the first weakens the rest.

• Raise it in writing with the management company or the owners' committee, attaching the index output for the year. Many discrepancies are billing errors against the right approved budget.
• Complain to RERA through the Land Department if that does not resolve it. RERA supervises every registered management entity and can investigate compliance with the budget it approved.
• File at the Rental Disputes Centre, which has jurisdiction over service charge disputes, including disagreements about how funds were allocated or applied.

What you cannot do is decline to pay while you argue. Unpaid service charges accrue against the unit, and they surface at the worst possible moment — when you sell and the developer will not issue the no objection certificate until the account is clear.

Owners' Committees, and Their Real Powers

Before 2019, buildings had owners' associations with legal personality. Law No. 6 of 2019 removed that. What exists now is an owners' committee, whose members RERA selects, capped at nine, with no separate legal personality and no power to contract.

Its function is oversight rather than management: reviewing budgets, checking that the management company is doing what it is paid for, and making recommendations. That is a narrower role than many owners expect, and it is worth knowing before you join one. The enforcement power sits with RERA, and the committee's value is in being the body that puts a documented case in front of it.

What Pushes a Building's Rate Up

• Amenity load. Pools, gyms, padel courts, cinemas and concierge desks are staffed and maintained forever.
• Facade type. Full glazing costs more to clean and more to cool than a mixed facade.
• Tower height. More lifts, more pumps, more pressure zones, more maintenance contracts.
• Master community layers. A unit can carry both a building charge and a master community charge.
• Age. Older buildings often have higher maintenance and, if the reserve was thin, a catch-up.
• Occupancy mix. Heavy short-let use puts more wear on lobbies, lifts and pools than long-term residents do.

Frequently Asked Questions

Who approves service charges in Dubai?

The Real Estate Regulatory Agency. The management company proposes an annual budget, a certified audit firm verifies it, and RERA approves, adjusts or rejects it. Only the approved figure can lawfully be invoiced, and invoices are issued through the Mollak system.

How do I check the service charge for a Dubai building?

Use the Land Department's Service Charge Index, available free on the DLD website and in the Dubai REST app. Search by project name, usage type and year to see the approved rate per square foot.

What is Mollak?

Mollak is the Dubai Land Department system that approves jointly owned property budgets, issues RERA-approved invoices and supervises the escrow accounts holding owners' money. Owners view their invoices and approved rates through it.

What is a reasonable service charge in Dubai?

The Dubai-wide median is around AED 17 per square foot per year. Jumeirah Village Circle sits near AED 10 to 13, Dubai Marina near AED 12 to 20, and Downtown Dubai commonly AED 17 to 40 or higher. What matters is the rate relative to what the building actually provides.

Can I refuse to pay a service charge I disagree with?

No. Raise it in writing, escalate to RERA, and file at the Rental Disputes Centre if needed, but keep paying. Arrears attach to the unit and will block the no objection certificate when you come to sell.

What is the reserve fund for?

Major capital works: lift replacement, facade repairs, fire system upgrades, roof and waterproofing. RERA requires a reserve contribution in every approved budget. A building with an underfunded reserve is heading for a special levy.

Do owners' associations still exist in Dubai?

No. Law No. 6 of 2019 replaced them with owners' committees, whose members are selected by RERA, capped at nine, with no separate legal personality. Their role is oversight and recommendation; management sits with a RERA-approved management company.

Does the service charge change every year?

It can. The budget is approved annually, so the rate can rise or fall with the building's costs and its reserve position. Treat the current figure as this year's figure rather than a fixed feature of the property.

The Short Version

Look up the approved rate before you buy, not after, and put the real figure into the yield. Read a healthy reserve as protection rather than as waste. Check each invoice against the published rate, because that comparison is the whole of your leverage. Escalate in writing, in order, and keep paying while you do.

Service charges are the one ongoing cost of Dubai ownership that is genuinely transparent. Owners who treat it as a mystery pay whatever arrives. Owners who spend ten minutes with the index do not.

Service charge rates, approved budgets and the composition of the index change annually and vary building by building. Figures here reflect published ranges at the time of writing in September 2026 and are general information, not legal or financial advice. Check the Dubai Land Department Service Charge Index for the project and year that concern you.