Tenants bear brunt of service fee rows

Tenants miss out on facilities as developers clamp down in rows with homeowners
Tenants bear brunt of service fee rows
Tenants at developments across Dubai have withheld payment in protest at poor maintenance services
By Shane McGinley
Mon 25 Oct 2010 03:18 PM

Tenants in some Dubai developments have had their access to services limited or stopped as a result of spats between landlords and developers over service charges.

Developers in areas such as Dubai Marina have downscaled or suspended access to facilities such as pools and gyms, after some owners refused to pay service charges.

In Jumeirah Beach Residence (JBR), built by real estate firm Dubai Properties, tenants are now required to use access cards to gain entry to the pools.

The cost of the cards is being passed on to tenants by owners reluctant to pay for service fees, said a JBR resident. The cards are understood to cost upwards of AED700.

A representative from Salwan Property Management, a division of Dubai Properties that manages services fees at JBR, said it was in dispute with a number of owners over service fees.

Restricting access to facilities has become a common tactic used by service firms to pressure homeowners into payment, said Michael Ryall, a director at Place Community Managers.

“It is a common practice among developers or management companies now to either limit or stop access to certain facilities where owners haven’t paid,” he said. “The tenant is often the one who suffers, to be frank.”

It is a method widely used in Dubai Marina “where access to facilities have been either stopped or been limited,” said Ryall.

Rows between owners and developers over maintenance fees have soared in the wake of Dubai’s real estate crash. In locations such as Discovery Gardens and Nakheel’s Shoreline apartments, scores of homeowners have withheld payment in protest at the poor upkeep of facilities and – in some cases – failure to deliver promised amenities.

In Discovery Gardens, a Nakheel development, tenants are still waiting for pools to be delivered by the developer, almost three years after handover.

In Nakheel’s Shoreline apartments, located on The Palm, some 40 percent of owners are thought to have defaulted on service fees.

Ryall said that developers were often reluctant to pursue legal action against owners who were slow to pay.

“Owners may also have counterclaims against developers for facilities they were promised that have not materialised,” he said.

In some cases, developers have taken more imaginative approaches to try to force owners to pay up. In July, Emaar Properties followed through on its threat to name defaulters by publicly posting their names and addresses.

A photo obtained by Arabian Business showed the names and flat numbers of fifteen residents in the Al Jaz cluster of apartments in The Greens who had failed to pay their service fees on time.

Emaar had previously 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.

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