Service Fee Index to the rescue... 18 months on.

Service Fee Index to the rescue… 18 months on.

The hoo-ha between developers, landlords, home owners and tenants concerning service fees has been going for well over 18 months. Alas, RERA steps in to prove the A in its name really does name stand for ‘Authority’.

September 4, 2012 3:46 by Eva Fernandes

Real estate in the UAE is a little like the girl with a curl in the middle of her forehead—when it is good, it is very good and when it is bad, it is horrid.

The extent to just how horrid it can get was exposed last year, when Nakheel resorted to using security guards to shut people out of their own apartments on account of unpaid service fee. What then ensued was a tiring game of pointed fingers with developer claiming its self proclaimed long-overdue fees, home owners claiming service fees were too high and tenants caught in the middle of either side pleading ignorance of their landlord’s service track record.

The Shoreline Apartments was only the first in a long string of such disputes to arise in the Dubai real estate market. Through the widespread confusion the one thing which became evident was a real need for RERA to step up its game. Sure, there was a lot of ‘all-hands-go-into-the-same-pocket’ talk, but I felt optimistic (though not for long).

Yet, perhaps there may just be a light at the end of this gloomy gloomy tunnel. Earlier this week RERA announced the issuing of a service fee index next month. RERA cheif Marwan Bin Galitah, CEO of Rera, told Gulf News “the service index will define fair service fees and will analyse not only cost but also quality, providing a sliding scale for basic to premium service.”

As of now, there are no suggestions whether this index will have legal implications for those developers who are charging well above the norm. Though a legal framework protecting homeowners and landlords for the obscenely high service fees some developers charge for substandard maintenance is as unlikely as it is needed; merely having an index is likely to increase transparency in the market. If not anything else, it will provide the homeowner or tenant a benchmark to argue their case against.

Now, having witnessed the long-drawn out eight month long implementation of the strata law, I know when it comes to real estate legislation things take some time. But hey, that is a start…even if it is 18 months on.