Reviewed by Roksolana Pyrtko
Who carries the service charge on a shop, office or warehouse unit in a Dubai building split into individually owned units, the owner or the tenant? Law No. (6) of 2019 answers in two parts. Unless the lease says otherwise, the Owner pays the Management Entity, and in all events the Owner stays liable if the tenant does not pay, with a lien on the unit behind that liability. The amount comes from a budget that the Real Estate Regulatory Agency (RERA) approves, not from the law.
Law No. 6 of 2019 covers shops, offices and warehouses as well as apartments
Article 2 of Law No. (6) of 2019 defines a Unit as “a flat, shop, office, warehouse, floor, whole or part of a land plot, town house, or independent house” intended for residential, commercial, industrial or any other use. Article 3 applies the law to all Master Projects and Jointly Owned Real Property in the Emirate of Dubai, including those in Special Development Zones and free zones.
The same article separates two roles that a lease keeps apart. An Owner is the person registered in the Real Property Register as owner of a Unit, including a holder of a usufruct or long-term lease right, or a Developer for unsold Units. An Occupant is anyone using a Unit for its intended purposes, whether an Owner, a tenant or another person the Owner authorises.
Two inputs sit outside the text of the law. The criteria that make a project a Major Project and the method for calculating each Owner’s share are both “approved by the Director General” of the Dubai Land Department (DLD), and the portal’s English text states that the Arabic text prevails in case of conflict. No figure derived from those resolutions is used below.
The project category decides who manages the common parts and collects the charge
Article 18 of Law No. (6) of 2019 sorts every Jointly Owned Real Property project into three categories for the management of Common Parts: Major Projects, run by the Developer; Hotel Projects, outsourced by the Developer to a Hotel Project Management Company; and every other project, run by a specialised management company that RERA selects and contracts. The category therefore names the Management Entity that bills a unit owner.
| Category (Article 18) | Who manages Common Parts | Owners Committee |
|---|---|---|
| Category 1, Major Projects | The Developer manages, operates, maintains and repairs Common Parts and Utility Services | Members selected by RERA from Owners residing in the property; up to 9 (Article 22(a)) |
| Category 2, Hotel Projects | A Hotel Project Management Company, outsourced by the Developer | Constituted only if that company wishes; it may not take part in managing the project or its Common Parts |
| Category 3, all other projects | A specialised management company selected and contracted by RERA | Up to 9 members appointed by RERA (Article 22(a)) |
The text assigns no category by building use. A shop, office or warehouse building falls in Category 3 unless it is designated a Major Project or licensed as a hotel, so the category is a fact about the individual project. Where a Category 1 or 2 project has no Developer, RERA appoints a Management Company (Article 18(d)). The DLD service Jointly Owned Property Management Companies lets an owner view the companies registered for the management supervision services activity.
A service charge can be billed only after RERA approves an audited budget
Article 27 of Law No. (6) of 2019 bars a Management Entity from charging or collecting any amount for managing, operating, maintaining or repairing Common Parts without RERA’s prior approval, and RERA may not approve the Service Charges budget unless a certified audit firm recognised by RERA has approved it. RERA may approve a temporary budget until the audited one is in place.
Each Owner’s share is the ratio of the Unit’s area to the total area of the Jointly Owned Real Property, taken from the area recorded in the Real Property Register (Article 25). A Developer pays the share of unsold Units. For an owner, the registered area and the approved budget therefore fix the invoice, and the law itself quotes no rate.
The money then moves through a controlled account. Article 30 requires a Service Charges account at a licensed bank for each property, deposit within seven working days of collection, and use only for listed purposes such as cleaning, security, maintenance, insurance premiums, audit fees and Management Company fees, with an emergency cash reserve held in a separate account. Under Article 34(b) the Management Entity reports to RERA every six months.
No typical rate per square foot is given here, because the law fixes none and the DLD Service Charge Index returns the charge approved by RERA for one selected project, use and year. An invented range would make the owner’s calculation look more finished than it is.
A lease can pass the charge to the tenant, but the owner stays liable to the Management Entity
Article 16(b) of Law No. (6) of 2019 makes the Owner liable for Service Charges and Usage Charges unless the lease for the Unit says otherwise, and adds that the Owner is not discharged from that liability if the tenant fails to pay. The lease therefore decides who bears the cost between landlord and tenant, while the statute decides whom the Management Entity can pursue.
Article 32 gives the Management Entity a lien on every Unit for unpaid Service Charges, and a Unit cannot be disposed of until they are paid. After a written notice approved by RERA, the Owner has 30 days to pay; the claim is then enforceable by the execution judge at the Rental Disputes Settlement Centre, who may order a public auction of the Unit and charge court fees, costs and advocates’ fees to the defaulting Owner.
Three provisions limit that chain. Article 27 means no charge stands without an approved budget behind it. Article 29 forbids a Developer or Management Entity from preventing an Owner from using the Unit or Common Parts in order to force payment outside the procedures of the law. Article 28 bars an Owner from refusing approved charges or waiving the interest in Common Parts to avoid them. A tenant remains bound by the Building Management Regulation and the Statute to the extent they apply to it (Articles 6(b) and 16(a)).
Owners Committee: a ten percent threshold, nine seats and review-and-recommend powers
Article 22(b) of Law No. (6) of 2019 constitutes an Owners Committee once at least ten percent of the total Units of a Jointly Owned Real Property are registered in the names of their Owners. In Category 1 and Category 3 projects the committee has at most nine members appointed by RERA, one vote each however many Units a member owns, and it meets every three months (Articles 22(a) and 23).
Article 24 limits the committee exclusively to listed tasks: verifying that the Management Entity performs under the law, reviewing and recommending on the annual budget and requesting financial reports, passing owner complaints to RERA when the Management Entity has not answered within fourteen days, and, in Category 3 projects, asking RERA to replace the Management Entity. Approval of the budget stays with RERA under Article 27, so the committee’s lever on a service charge is a recommendation and a complaint.
Membership requires an Owner who resides in the property and pays the Service Charges and Usage Charges, among other conditions (Article 22(c)). The DLD Registration of Owners Association Application states the same residence condition and provides a document set for company owners, including a trade licence copy where the unit is in favour of a commercial company. Neither the law nor that page says how a company that owns a warehouse unit meets the residence condition.
The DLD release of 27 February 2025 records 127 newly registered owners’ committees, open to individuals and companies, with company applications routed through the property management companies to RERA. The invitation of 14 January 2025 had set 31 January 2025 as the closing date, with priority for the first nine registrants. Neither release gives the number of projects above the ten percent line, so 127 describes one cycle, not a share of a total.
What the law fixes and what the lease and the budget decide for a commercial unit
For a commercial unit in a Dubai jointly owned building, Law No. (6) of 2019 fixes the base ratio (Unit area over total area, with the method approved by the Director General), the approval gate (RERA and a certified audit), the Owner’s liability and the enforcement clock (30 days after a RERA-approved notice). It leaves the amount to the approved budget and the split between landlord and tenant to the lease.
Two documents therefore decide what holding such a unit costs: the approved budget for the project, use and year, which the DLD Service Charge Index returns, and the service charge clause of the lease, which the statute does not write. A committee seat gives its members the right under Article 24(2) and (3) to review the budget and to recommend to the Management Entity or RERA, but no vote on it; for a company owner, only the application runs through the management company.
This material was reviewed by Roksolana Pyrtko, who is the CEO of the Lviv shopping and entertainment centers “Roksolana” and “Spartak”, an attorney, and a specialist in commercial real estate analytics and development.
This material is informational in nature and does not constitute legal, tax or financial advice.