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New Dubai law bars developers from collecting service fees

Dubai - Mollak, an electronic platform for tenants and home owners, is on track to record Dh4 billion.

Dubai developers are no longer allowed to collect service charges from property owners as a new law comes into effect removing developers from setting charges or collecting funds. Developers have only a month left to start invoicing all service charges on ready properties through the Dubai Land Department's Mollak system, which was launched by the Dubai Land Department.
Mollak, an electronic platform for tenants and home owners to pay service fees, is on track to record Dh4 billion towards service fees. The platform has so far registered 231,277 real estate units, 1,240 properties, and 89 real estate companies. "At present, the total amount of service fees audited in the system exceed Dh1.3 billion," according to DLD.
The introduction of Mollak ensures that henceforth developers have to invoice service charges on properties only through the new electronics payment platform. The initiative is in line with the Common Properties Law, No. 6 of 2019, which comes into effect on Tuesday.
Mollak, which has been designed to be more fair and transparent, comprises an online automation process that requires the developer and the joint ownership property management, through its manager, to provide accurate information regarding the services provided in joint ownership properties so that Real Estate Regulatory Agency (Rera) can approve the service fees.
The system also assists joint ownership property owners and ascertains smooth and easy operations with property managers as well as provides a new and integrated structure to monitor accounts related to service charges in these projects by relying on the financial accounts that operate as per to the mechanism of the escrow account, DLD said.
Sultan Butti bin Mejren, Director General of DLD, addressing a press conference held to highlight the 'Joint Real Estate Ownership Law in Dubai,' said the new law would contribute to enhancing transparency and consolidating global leadership of Dubai's real estate sector. "We are pleased to announce the Mollak system, which will make common service charges smooth and easy to pay."
Marwan bin Ghalita, CEO of  Rera,  highlighting the updates, development, transparency, and confidence that this law will bring to the Dubai real estate market, said the law would ensure better services to gain investor confidence in the Dubai real estate market. "The law covers all common grounds, property management companies, and developers. On-ground implementation has already begun, and the team is fully prepared to implement and act accordingly," Ghalita said.
Judge Abdulqader Mousa, Chairman of the Rental Disputes Center, said the centre added a new mandate, namely disputes relating to common real estate issues, in cooperation with Rera and Emirates Real Estate Solutions.  
Majid Al Marri, CEO of the Registration and Real Estate Services sector at DLD, said that the Real Estate Registration and Services Sector would focus its attention on the real estate register of common property, including all land owned by developers of joint properties, such as parking spaces and open spaces, pointing out that the law will resolve any disputes concerning these types of properties, for easy segregation and determination of responsibilities and duties. Khalifa Al Suwaidi, CEO of Emirates Real Estate Solutions, said they are working closely with DLD and had developed several applications to enhance technology in the real estate sector. - issacjohn@khaleejtimes.com