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27 February 2024

Rera blames chiller cost for service fee hike

By Parag Deulgaonkar

Although “maintenance” charges have come down significantly in Dubai, it is the utility and chiller charges that have led to an increase in service charges, a senior government official told Emirates 24|7.

“We have tried our level best to reduce maintenance fees, but all our efforts are hampered by the rising cost of utilities and chiller charges. We have taken up the issue with the respective agencies,” said Mohammed Khalifa bin Hammad, Senior Director, Real Estate Regulatory Agency (Rera).

He adds: “We have worked to reduce the maintenance charges in most developments. We don’t approve any budget of any developer without reviewing them. They have to justify each and every increase that they have asked for.”

Citing an example, Bin Hammad said Nakheel was charging owners in Discovery Gardens a maintenance fee of less than Dh2 per square feet, but the utility cost and the chiller cost made up more than 60 per cent of the total service charge.

Anthony D, a Russian expat, who owns two apartments in the master community, says he has gone through the current Rera-approved service charges and found electricity and chiller to constitute 70 per cent of the service charges.
“Almost 70 per cent of the service charge is made up utility and chiller charges. It is too much and somehow needs to be reduced.”

In Discovery Gardens, chiller charges are close to Dh7 per square feet, while utility charges come close to Dh4.5 per square feet.

Rakesh Bohra, an Indian expat, who owns an apartment in Royal Oceanic in Dubai Marina, says: “The chiller cost is killing us. About 50 per cent of the cost of service charge is related to chiller. Besides, a consumption charge, we pay a capacity charge that we have to pay even if we are not using the chiller.”