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Mon 12 Jul 2010 07:08 AM

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Emaar to 'name and shame' service charge dodgers

Dubai developer adopts tough tactic as concern over non-payments grows.

Emaar to 'name and shame' service charge dodgers

Property giant Emaar has threatened to publish the names of residents at its projects that fail to pay up the fees on time as concern about the non-payment of service charges grows.

The Dubai developer has posted notices in some of its buildings, including the Greens area of the city, which say that the names of non-payers will be published on public notice boards.

Emaar described the practice as “routine” and said that it had made “concerted initiatives" to strengthen awareness among owners that service charges are an investment on the long-term value of their property.

“Informing owners about the service charges is a routine community management procedure in line with the regulations by RERA [Dubai’s Real Estate Regulatory Authority] and other concerned authorities,” an Emaar spokesperson told Arabian Business.

“Emaar is a pioneer in driving modern community management practices, and even before the recent regulations…were issued, Emaar had taken initiatives to set up interim owner committees that represent the owners. These Interim Owner Committees have been working together with the Community Management Department, and we have had a very successful track-record of cooperation from the owners in paying the service charges.”

As Dubai’s strata laws - which allow property owners to play a more active role in the maintenance of their buildings - come into play, some experts have expressed concern that owners of property in freehold areas could be hit by major unforeseen maintenance charges.

Under the terms of the regulations, owners have to pay routine maintenance and upkeep charges, as well as premiums to cover building insurance and an emergency reserve or ‘sinking’ fund to take care of bigger problems.

“When considering a real estate investment, prospective owners should always seek advice from professionals who can evaluate all potential operational costs, as well calculating depreciation or the appropriate deposits for a ‘sinking’ fund,” said Mazen Falhout, general manager of MAGme Property Solutions.

“For example to replace a chiller in an average tower building costs around AED2-3 million [$545,000-817,000], that amount must be built-in over ten years when it reaches the end of its working life. If there is no ‘sinking’ fund, owners have to foot the entire bill at that point of time which could be substantial,” he added.

Also enshrined within the strata laws is a fast-track procedure that can have owners evicted from their premises for non-payment of service charges in as little as a month.

According to guidance provided by law firm Al Tamimi & Company, the practical procedure for the enforcement of a lien on each unit gives owners fifteen days to pay their service charges, an action that can be carried out when owners are abroad.

“In the event of a property owner not being present in the country, you would need to take your enforcement court judgement to the police and ask for their assistance in entering the property and taking possession,” Lisa Dale, partner and head of property at Al Tamimi told Arabian Business.

“That’s a risk a defaulting owner will take – leaving their property for a period of time without having paid their service charges.”

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Harry winston 10 years ago

1. Name and shame high interest rate chargers 2. Developers who dont diliver on time. 3. Developers who chare high service fees (Emaar) and high colling fees (Emcool) I think this will backfire on Emaar , when we start applauding those who refuse to pay these ridiclious fees. In general these charges are to maintain a facility, however in the UAE we have companies making to look a profit. Home owners committee should have final decision on which service company to use.

mustafa 10 years ago

i suggest emaar to link the service charges to elictricty connection. if customer fails to pay within lets say 3 months after the due date .then a notice to be sent through emaar to dewa to disconnect the services till payment is received by emaar.

Rudy Bier 10 years ago

One of the main reasons people do not pay their charges is due to lack of transparency. It would be better if the developers explained in detail where the monies were going, and not just send us a a statement that hides all out goings! Why do we pay so much for the security guards that happen to be part of the parent company? A proper audit needs to be done to justify the costs. Only then can you start trying to collect monies due! People do not want to be ripped off. Obviously once this has been done and the OA agree then payments need to be kept up.

Hesham 10 years ago

Had an incident with Emaar that I have been regularly paying my service charges fees due for the past 3 years and by coincidence found that Emaar owes me around a year of service charges which didn’t show on statements sent by them nor the website. I am wondering if the ‘name and shame' will lead community manager to remove late charges on delayed service payments or is it not enough. I agree that expenses should be shared as well for owners to know where the money is directed. As for the past 3 months I have been following up on some fixing of community facilities, which I am not sure why is it taking so much time to deal with it and get it fixed (i.e from one owner’s service charges the equipment can be easily replaced 3 times with a brand new machine), shouldn’t ‘name and shame' explain the same as well. Bottom line, service charges are high for quality given…

Emarati 10 years ago

I believe the Service fees should be paid by all residents BUT the issue is that there is no transparency, which causes mistrust and these issues. Lack of transparency is typical in this region, as no one wants to be efficient. There isn't even a proper public compliant system. Therefore Emaar can get away with the following: 1. When Emaar, EMRILL, handover, work request etc is delayed.. then its OK 2. When residents want to ask details and to take over the management, no response from Emaar. (As its more money for them). 3. Emaar still hasnt explained how per foot AED30 charge is arrived at for OLD TOWN, after repeated requests for 2 years. Shame on you Emaar as well.

digrunteled 10 years ago

I have been part of several efforts to bring Emaars service charegs bills to an acceptable stabndard. As of 2010 they tell me pay xxxxx Dirham, but refuse outright to give any explanation or accountability what the money is for. (except very general and sometimes wrong explanations) My Du bill lists every (!!!!) service in detail and I know what I pay for. As long as Emaar refuses to give the right accountability to the OWNERS of the funds (it is not their money afterall) I can not see how the situation can be improved. The best solution is if the Homeowners associations are established as soon as possible and a new maintenance provider is appointed as soon as contracts permit.

Chef 10 years ago

The key to this is transparency if yu know where you pay for nobody should have an issue. Otherwise just disconect them. We have owners organisation who got teh charges down form 23 to 13 dhs and even this can be done beter as soon as Palm Cooling could give some more explanations( Pay more for the coridor as i do for my whole house) Sinkfunds are essential but its more important who manages them there are milions in there (Nice to put away agains 5%)

expat 10 years ago

Gees...does a big time developer has to resort to this?! I'm sure if the residents of developers did this name and shame business, I'm sure Emaar will make the top five (in one regard or another). What a joke!

trash regulator 10 years ago

As a long time owner in the Greens (back in 2003!), I can see the steady decline of the quality of "some" of the tenants now moving in. It seems as the rents went down with the economy, so has the quality of the tenants. So called "educated" professionals from Media City and surrounding areas have moved in and are becoming a nuisance with late night drunken antics in this family friendly community. from the article above..."“For example to replace a chiller in an average tower building costs around AED2-3 million [$545,000-817,000], that amount must be built-in over ten years when it reaches the end of its working life."... Careless residents smoke in the corridor and leave the common windows and doors open in the middle of summer. This is what destroys ACs as well as breeds mold and fungus in the vents due to humidity. Hoping the Home Owners Association comes to fruition soon, to control not just the payments but uphold the quality of life in one of the best kept and still "green" areas of Dubai. To give credit where due, Emaar has a nice hidden gem of a man-made lake behind Greens Village, a perfect family friendly environment not seen in much of Dubai (except UP's greens community maybe) Hoping for a change.

Chris 10 years ago

I would rather call it "Name and Fame"! Applauded gents who request transparency.