The Dubai Rental Disputes Center (RDC) has issued a landmark ruling clarifying that property buyers must pay service charges on their units even if they have not formally taken possession, provided delays in handover are due to the buyer’s actions.
Announced on Thursday, the ruling addresses a recurring source of disputes between property developers and unit owners over who is responsible for covering the cost of maintaining and operating shared building facilities. The RDC said the new interpretation ensures continuous provision of services in jointly owned properties while protecting developers and compliant owners from unfair financial burdens.
The case stemmed from unique situations in which buyers had completed installment payments but had not yet registered their ownership. In several instances, developers withheld delivery due to outstanding dues, sparking disputes over whether service charges should fall on the buyer or remain the developer’s responsibility.
The matter was escalated to the General Authority for Unifying Principles within the RDC, which ruled that buyers listed in the preliminary property register are liable for service charges from the date of project completion, or from the point of default on financial obligations—even if final ownership has not been transferred.
According to the Center, the decision is rooted in Law No. (6) of 2019 on Jointly Owned Properties, which governs payment of fees to cover management, operation, and maintenance costs. Under the law, developers or owners must bear service charges for unsold units, with the collected funds directed to management companies to ensure uninterrupted building operations.
Judge Abdulqader Mousa Mohammed, President of the RDC, said the ruling closes a legislative gap that had led to uncertainty. “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 a practical approach, and reaffirms our commitment to justice and fair dispute resolution,” he said.
The ruling also highlights the growing efficiency of Dubai’s dispute resolution system. In 2024, the RDC closed 49,817 execution files related to joint ownership and finalized 443 reconciliation agreements worth AED 190.7 million during the second quarter alone. The average settlement period per case was just six days, underscoring the Center’s emphasis on swift and effective dispute resolution.
Legal experts say the ruling provides long-awaited clarity for Dubai’s property sector, offering developers assurance that service charges will be consistently covered, while also reminding buyers of their obligations even before they assume full ownership.
By addressing the issue, the RDC aims to stabilize the property market, ensure uninterrupted services for residents, and strengthen investor confidence in Dubai’s real estate sector.
