Residents Unsure Of Maintenance Fee Protection

Residents have raised doubts about the new law brought in to prevent developers from imposing huge hikes in maintenance fees. Instead of developers being able to set yearly increases in maintenance fees, any increase will now need to be approved first by the Real Estate Regulatory Authority (Rera), according to a regulation issued on Sunday. However for many, maintenance fees are required to be paid at the beginning of January every year. It is not clear whether increases announced for this year will be forced back to last year’s rate, or whether the ruling is applicable from now on. On the whole, this ruling is tremendous. However, there are several question marks remaining,” said Hamid Hamri, chairman of the Owners Association in Jumeirah Beach Resort (JBR). The area has seen maintenance fee increases of 129 per cent. It is not clear whether this year’s increase will be put down to the previous amount,” he said. According to strata law enacted by Rera, service charge increases should be scrutinised and approved by the respective owners’ associations before being enforced. However, few developers have registered owners associations despite a requirement from Rera that they do so.

The regulation means that service charge increases will be now be calculated by Rera based on a formula that “will seek to strike a balance between the expenditure shouldered by the developers and the quality of services received by the owners”, according to state news agency Wam. The service charges are no longer subject to the developers’ calculations and their desire to turn them into a profit-making tool,” Marwan Bin Ghalita, Director-General of Rera, was quoted as having said. The JBR association has been petitioning property management company Salwan about gaining registration, and Hamri questioned whether it would now be necessary given Rera’s level of oversight. However, Bin Ghalita told Khaleej Times that there would still be a role for associations. Once we approve the budget 
for the developers, the owners association will do the adjustment,” he said via text message. He had not responded to further questions regarding this by the time of going to the press. Despite the change, residents who have been given the bill for service charges this year are fearful of refusing to pay the increases in case they are penalised. One resident of Jebel Ali, who chose not to be named, said that she had seen a further maintenance fee hike this year from Dh21,700 to Dh24,000. It’s still a bit too much for a two-bedroom apartment,” she said. The developer is already threatening to take our house in case 
we do not comply with them, so I cannot make too much of a fuss over the service 
fee in case they decide to play dirty,” she added.

Source: Khaleej Times