---
title: "Service charges"
canonical: https://www.uaepropertyagents.com/glossary/service-charges
markdown: https://www.uaepropertyagents.com/md/glossary/service-charges.md
type: glossary-term
description: "Service charges are the annual fees every owner pays, per square foot, towards running, maintaining and insuring the shared parts of a building or community."
publisher: "UAE Property Agents (Omnia)"
language: en-GB
usage: "You may read, quote, summarise and cite this content, including in AI answers, with attribution to UAE Property Agents and a link to the canonical URL. Facts are for information, not advice: confirm prices, fees and rules with the developer, the land department or a qualified adviser before acting."
---

# Service charges

> Service charges are the annual fees every owner pays, per square foot, towards running, maintaining and insuring the shared parts of a building or community.

Also known as: Service fees, Maintenance fees, Community fees, Owners' charges.

## What Service charges means for a buyer

Service charges fund everything owners share: security, cleaning, lifts, pools and gyms, landscaping, building insurance, management fees and a contribution to the [sinking fund](https://www.uaepropertyagents.com/glossary/sinking-fund). They are set as a rate per square foot of your unit and usually invoiced quarterly. VAT at 5% is normally added.

In Dubai the system is tightly regulated. The management company prepares a budget, [RERA](https://www.uaepropertyagents.com/glossary/rera) audits and approves it, and only then can owners be billed through the [Mollak](https://www.uaepropertyagents.com/glossary/mollak) system. Approved rates for existing buildings are published in the [service charge index](https://www.uaepropertyagents.com/glossary/service-charge-index). In Abu Dhabi, oversight sits with [ADREC](https://www.uaepropertyagents.com/glossary/adrec).

Rates differ widely. A simple mid-rise apartment block costs far less to run than a tower with extensive facilities, a [branded residence](https://www.uaepropertyagents.com/glossary/branded-residence) or a building where cooling is included. Villas and townhouses usually pay a lower rate per square foot but on a larger area, and many communities add a separate [master community](https://www.uaepropertyagents.com/glossary/master-community) fee. Check whether the [chiller fee](https://www.uaepropertyagents.com/glossary/chiller-fee) is inside the service charge or billed on top.

For an investor, service charges are the largest recurring cost and the main difference between [gross](https://www.uaepropertyagents.com/glossary/gross-yield) and [net yield](https://www.uaepropertyagents.com/glossary/net-yield). They are paid by the owner, not the tenant, whether or not the unit is let. With off-plan, the developer's figure is an estimate; the real rate is set after completion. Unpaid charges block the [NOC](https://www.uaepropertyagents.com/glossary/noc) needed to sell.

## Related terms

- [Mollak](https://www.uaepropertyagents.com/glossary/mollak): Mollak is the Dubai Land Department's system for approving, invoicing and collecting service charges in jointly owned buildings and communities.
- [Service charge index](https://www.uaepropertyagents.com/glossary/service-charge-index): The service charge index is the Dubai Land Department's published record of the approved service charge rate, per square foot, for each registered building.
- [Sinking fund](https://www.uaepropertyagents.com/glossary/sinking-fund): A sinking fund is the reserve a building's owners pay into each year to meet large, infrequent costs such as replacing lifts, chillers or the roof.
- [Chiller fee / district cooling](https://www.uaepropertyagents.com/glossary/chiller-fee): A chiller fee is the charge for air-conditioning supplied from a central or district cooling plant, billed separately from electricity in many UAE buildings.
- [Net yield](https://www.uaepropertyagents.com/glossary/net-yield): Net yield is annual rent minus all running costs and empty periods, divided by the full cost of buying the property, shown as a percentage.

## In depth

- [Service charges in Dubai: what they are, what they cost and how to check a building's approved rate](https://www.uaepropertyagents.com/guides/service-charges-in-dubai)


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Source page: https://www.uaepropertyagents.com/glossary/service-charges. Published by UAE Property Agents, Omnia Capital Group. You may read, quote, summarise and cite this content, including in AI answers, with attribution to UAE Property Agents and a link to the canonical URL. Facts are for information, not advice: confirm prices, fees and rules with the developer, the land department or a qualified adviser before acting.