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29 March 2024

Nakheel says service charges lowest in Dubai

Published
By Parag Deulgaonkar

Homeowners in Nakheel communities still owe millions of dirhams in service charges, according to the master developer.
 
"Service fee collection is an issue faced by all developers, not only Nakheel.  Our service fee collection campaigns are having an impact, and paying residents are pleased that we are chasing non-payers,” the company said in a statement sent to Emirates 24|7.
 
“However, we are still owed hundreds of millions of dirhams in unpaid charges, with many people not paying their dues in over four years. We will continue to take steps to pursue defaulters,” the company added.
 
In the latest move, as reported by this website, the master developer issued the final reminder to unit owners in Discovery Gardens and International City, informing them of legal action to possibly restricting access to their buildings. (Click here to read more)

Homeowners have to a penalty for late payment of service charges, which is at charged monthly at the rate of 2 per cent per month for all amounts unpaid after the due date. Late payment fees are treated as revenue of the respective community or owners associations.

Service charge has been contentious issue for years in Dubai and of late a number of developers have taken stringent measures such as barring tenants/owners from accessing facilities (gym and swimming pools) to even ceasing garbage collection services to get “rogue” owners to pay up.
 
Although Nakheel has claimed it has often reminded defaulters to pay their dues, apartments owners simply have ignored their call.
 
In December 2012, Nakheel CEO Sanjay Manchanda told this website that Nakheel was made “scapegoat” in the Palm Shoreline Apartment service charge issue.
 
“We were made the scapegoat. It was being said that we were not doing enough and we were increasing charges, but on the contrary people have found out that these were unfounded allegations against us,” he said.
 
Cheapest service charge
 
Nakheel claimed in the statement that its service charges were the lowest in Dubai.
 
"We continue to bring down our service charges, which are fully approved and audited by the relevant authorities, and are now the cheapest in Dubai,” the company said.
 
“As we have stressed before, only by collecting service fees can we ensure ongoing maintenance and improvements at our communities.  It is wrong for customers who have honoured their payments to be subsiding those who haven't,” it added.
 
In August 2011, Nakheel Chairman Ali Rashid Lootah said that value engineering, negotiation and renegotiation of service provider contracts had allowed the company to reduce service charges across all its communities.
 
“We want to have the lowest service charges in Dubai,” he had said.