The Dubai Rental Disputes Center (RDC) has announced a new rule that makes it mandatory for property developers to confirm that all service charges are fully paid before handing over a property to a buyer.
The aim is to make property transfers smoother and ensure that shared buildings continue to operate without financial problems or disputes.
What the Rule Says
Many developers in Dubai have faced issues when buyers delay paying service charges, the fees used to maintain and manage shared areas such as elevators, parking, and security. Sometimes, even when a property is paid in full, these fees remain pending, causing delays in handover and confusion over who is responsible.
The new ruling provides clarity.
According to Law No. (6) of 2019, developers must now:
- Check payments before handover: Developers need to confirm that all service charge payments are cleared before transferring the property to the buyer.
- Avoid financial loss: Developers are no longer required to cover costs for buyers who have not paid their dues. The funds must go directly to the management company that handles building maintenance.
- Complete handovers promptly: Once all payments are confirmed, developers should not delay property transfers unnecessarily.
In simple terms, no property can be handed over until all service charges are paid.
Why It Matters
Judge Abdulqader Mousa Mohammed, President of the RDC, explained that the decision helps create a fair and transparent property market. It gives developers the legal backing they need to hold buyers accountable for service charge payments and ensures that community maintenance continues smoothly.
Before this change, developers often had to bear costs when buyers didn’t pay, which created financial strain and legal confusion. Now, with clear rules in place, both sides know their responsibilities.
How It Affects the Market
In 2024 alone, the RDC resolved 49,817 property dispute cases involving jointly owned properties, many linked to unpaid service fees.
In the same year’s second quarter, 443 settlement agreements worth Dh190.7 million were completed, most in less than a week. This shows how clear procedures can speed up dispute resolution and increase trust in the market.
The new directive is expected to reduce property disputes, accelerate handovers, and boost investor confidence.
Developers who fail to follow these rules could face penalties or increased scrutiny from the Dubai Land Department (DLD).
Building a More Transparent Real Estate Sector
This move strengthens Dubai’s reputation as a global real estate hub built on transparency and strong governance.
It ensures that all parties, developers, buyers, and management companies fulfill their financial duties, keeping communities well-managed and sustainable.
Developers are advised to update their handover procedures and Real Estate lawyer to ensure they fully comply with the new requirements.
