Two identical shops in two Dubai Municipality markets, on identical rents, can face service charges ten times apart. The reason is in the drafting rather than in the buildings: Administrative Resolution No. 27 of 2023 sets the charge for guarding, cleaning and maintenance as a percentage of the annual rent, and it fixes a different percentage for each market. The range published in the resolution runs from 2.5% to 25%, which is a gap of 22.5 percentage points on the same line of the same bill.
What follows takes that bill apart line by line, using only rates printed in the resolution and tariffs published by the utility. Because no rent for these units is published anywhere, every dirham figure below is computed from a stated base of AED 100,000 of annual rent — a round number chosen so that percentages read as money, and not an estimate of what any shop pays.
What the resolution charges, and for what
Article 6 of Administrative Resolution No. 27 of 2023, issued on 25 January 2023 by the Director General of Dubai Municipality, states that in return for providing guarding, cleaning and maintenance services the municipality collects service charges from tenants, calculated as a percentage of the annual rent of the leased property and taking into account the market in which that property sits.
Two limits sit alongside it. The percentage may be amended upward or downward by the competent committee on the basis of the actual cost of services and the annual rent, but in no event may the service charge exceed 25% of the annual rent, and the amendment must be made at the time of concluding or renewing the tenancy contract. The cost of services therefore enters the calculation only as grounds for changing a percentage at renewal, never as the amount billed.
| Line on the bill | Basis in the resolution | On a base of AED 100,000 rent |
|---|---|---|
| Annual rent | Tenancy contract | 100,000 |
| Service charge, dearest market | 25% of annual rent | 25,000 |
| Service charge, cheapest market | 2.5% of annual rent | 2,500 |
| Assignment to a third party | 10%, one-off | 10,000 |
| Sublease, whole or part | 10%, one-off | 10,000 |
| Exchange of leased property | 5%, one-off | 5,000 |
| Electricity and water | Consumption, tariff below | Not computable without volumes |
One service charge, fifteen different rates
The resolution as issued in 2023 names fifteen markets and prints a percentage against each. The spread is the point: the same three services — guarding, cleaning and maintenance — are priced at ten times the rate in one market that they are in another, with the base being rent in both cases.
| Market | Service charge | On a base of AED 100,000 |
|---|---|---|
| Central Fruit and Vegetable Market | 25% | 25,000 |
| Trucks and Heavy Equipment Market | 15% | 15,000 |
| Al Hamriya Central Market, old shops | 15% | 15,000 |
| Al Rashidiya Central Market | 15% | 15,000 |
| Livestock and Feed Market | 15% | 15,000 |
| Hatta Market | 15% | 15,000 |
| Auto Market | 10% | 10,000 |
| Traditional Souq | 10% | 10,000 |
| Al Tay Livestock Yards | 10% | 10,000 |
| Building Materials Market | 10% | 10,000 |
| Al Ayas Market | 10% | 10,000 |
| Furniture Market | 10% | 10,000 |
| Naif Souk | 7.5% | 7,500 |
| Al Fahidi Souk | 7.5% | 7,500 |
| Birds and Pets Market | 5% | 5,000 |
| Al Hamriya Central Market, new shops | 2.5% | 2,500 |
One market appears twice, and that is the most instructive row in the table. Al Hamriya Central Market carries 15% for its old shops and 2.5% for its new ones, so the same market, the same management and presumably the same guards produce a sixfold difference in the charge depending on which part of the site a shop occupies.
Why the base is rent rather than floor area
A service charge priced on rent behaves differently from one priced on floor area, and the difference is not cosmetic. Two shops of the same size in the same market pay different amounts if their rents differ, because the charge tracks the contract rather than the square metres being cleaned. A rent review therefore moves the service charge with it automatically, without any change in the services delivered.
The resolution also fixes when the percentage itself can move. Because an amendment must be made at the time of concluding or renewing the tenancy contract, the rate is stable within a term and changes only at the same moment as the rent. For an occupier, this means the two numbers must be modelled together at renewal rather than separately, since the second is a fixed multiple of the first for the life of the contract.
The one-off percentages: 10%, 10% and 5%
Three transaction charges in the same 2023 resolution use that base again. Assignment of a tenancy contract to a third party costs 10% of the annual rent stated in the contract or of the annual rent of similar property in the market, whichever is higher. Subleasing costs 10% on the same alternative base, whether the property is subleased in whole or in part. Exchanging one leased property for another costs 5%.
Two conditions on those charges matter as much as the rates. An assignment requires that at least one year has passed since the property was leased to the assignor, and that the property was actively occupied throughout, not closed without a reason the municipality accepts. And the “whichever is higher” wording means a below-market rent does not produce a below-market fee: the comparison to similar property inside the market sets a floor under the charge that the contract alone cannot lower.
The meter clause, and what it costs
Article 7 handles property without its own metering, and it does so by reference to someone else’s tariff. Where a unit has a sub-meter drawing from the municipality’s main meter, or shares a meter, consumption charges are determined at the highest consumption slab prescribed by the Dubai Electricity and Water Authority when the meter is read. On a shared meter the total is then divided among the units by total area and nature of activity.
The published slab tariff shows what that clause is worth. For a commercial consumer, electricity runs from 0.230 AED per kWh in the first slab to 0.380 in the highest, and water from 7.700 AED per cubic metre to 10.120. Being billed at the top slab rather than the first therefore costs 65.2% more per unit of electricity and 31.4% more per unit of water — before the August 2026 fuel surcharge of 0.060 AED per kWh and 1.100 AED per cubic metre, before meter service charges of 5 to 35 dirhams depending on meter type, and before the 5% VAT the utility notes on the same page. What that multiplier produces in dirhams depends on consumption, which nobody publishes for these units and which is not assumed here.
Where the model usually goes wrong
The recurring error is importing a private-market habit into a municipal one. In a privately owned building a service charge is quoted per square foot or per square metre, so an occupier compares it to the rent per unit of area. In these fifteen markets the 2023 charge has no area component at all: it is a percentage of the rent, capped at 25%, and it moves whenever the rent moves.
The second error is treating the meter position as a technical detail. A unit on its own meter pays the slab its consumption reaches; a unit on a shared or sub-meter is charged at the highest slab regardless. That is a difference in unit price of about two-thirds on the August 2026 electricity tariff, decided by metering rather than by usage, and it is set out in the same resolution as the service charge rather than in any utility document.
Conclusions
The bill for a shop in a Dubai Municipality market has four layers, and three of them are percentages of the rent. Administrative Resolution No. 27 of 2023, issued on 25 January 2023, prices guarding, cleaning and maintenance at between 2.5% and 25% of annual rent depending on the market — 25% at the Central Fruit and Vegetable Market, 15% at four markets including Al Hamriya’s old shops, 10% at six, 7.5% at Naif Souk and Al Fahidi Souk, 5% at the Birds and Pets Market and 2.5% at Al Hamriya’s new shops — with an absolute cap of 25% and amendment permitted only at conclusion or renewal of the contract. On top of that sit one-off charges of 10% of annual rent for assignment, 10% for subleasing whether whole or partial, and 5% for exchange, each computed on the contract rent or on the rent of similar property in the market, whichever is higher, and assignment additionally requiring a year of active occupation. The fourth layer is metering: a unit without its own meter is charged for electricity and water at the highest slab the utility prescribes, which on the published tariff is 0.380 against 0.230 AED per kWh and 10.120 against 7.700 AED per cubic metre, or 65.2% and 31.4% above the first slab, before the fuel surcharge, the meter charge and 5% VAT. For an occupier the operative conclusion is that the rent is not the variable to negotiate in isolation: on a base of AED 100,000 the service charge alone ranges from AED 2,500 to AED 25,000 by market, so the address determines a larger share of the annual cost than any single term of the contract does — and since Dubai Municipality publishes no rents for these units at all, while the emirate’s own rental index releases values one identified unit at a time, the only honest way to state any of it is as a percentage against a base that has been named.
This material is informational in nature and does not constitute legal, tax or financial advice.