In recent years, Dubai has seen a growing number of disputes between developers and off-plan buyers at the point of handover. A common issue has been a misunderstanding—particularly among international buyers: that service charges only become payable once the property is physically handed over.
In many jurisdictions, this assumption is reasonable. Buyers expect that until they receive the keys, their financial obligations have not fully begun. However, Dubai’s system operates differently. As projects reached completion, a consistent pattern emerged. Buyers delayed handover due to ongoing discussions or concerns, registration formalities were not completed on time, and service charges remained unpaid while buildings were already operational.
At the same time, developers and management entities continued to fund maintenance, services, and common areas—regardless of whether individual units had been collected. This disconnect led to increasing disputes and inconsistent outcomes.
In October 2025, the Dubai Rental Disputes Centre (RDC) stepped in to clarify the position.
- Buyers may still be required to pay service charges even without taking possession, where the delay is attributed to them.
This does not introduce a new obligation. It clarifies how the existing Jointly Owned Property Law (Law No. 6 of 2019) is applied in practice.
- The practical effect is direct: delaying handover does not necessarily delay financial exposure.
In this review, we bring this clarification forward to highlight the often-overlooked financial exposure linked to handover delays, and to clarify when service charge liability can arise before possession.
The Key Principle in practice
At its core, the position is straightforward: service charges in Dubai are linked to ownership, not strictly to physical possession.
Once a project is completed, the obligation to contribute to the upkeep of common areas does not automatically wait for the buyer to take the keys. Liability can arise earlier—particularly where the handover process is delayed for reasons attributed to the buyer.
To understand the practical implications, it is necessary to examine how these situations typically develop.
Where this typically arises
In practice, exposure often develops in situations that initially appear routine. A buyer may have completed payment but has not finalised registration. Handover may be delayed due to issues that have not been formally documented. A dispute may exist, but the buyer’s position has not been clearly structured or evidenced. In many cases, there is simply an assumption that financial obligations do not begin until possession.
Across all these scenarios, the underlying risk is the same: liability may begin before possession is taken.
Why this becomes a real risk
What appears to be a timing issue can quickly develop into a structured financial exposure. Service charges are applied on a recurring basis. Where handover is delayed, costs can accumulate without immediate visibility, often only becoming apparent once a position has hardened or a dispute has escalated.
These situations are not assessed based on general fairness. They are determined by what can be demonstrated through records and documentation. A buyer who believes the developer is responsible may still face liability if that position is not clearly evidenced.
Informal handling of disputes—whether through conversations, messages, or unstructured complaints—tends to weaken the buyer’s position. Without formal notices and a clear record, it becomes significantly more difficult to establish that the delay was not attributable to them.
The process itself is also not neutral. Developers and management entities typically control the timing of notices, documentation flow, and handover coordination. Without a structured approach, this can materially influence how responsibility is later assessed.
In many cases, buyers only become aware of their exposure once charges have accumulated and enforcement steps are already underway. If the matter progresses, enforcement is not theoretical.
Unpaid service charges may lead to RDC claims, liens over the property, and formal recovery procedures. At that stage, the issue is no longer whether the charges feel justified—it is whether the position can be legally sustained.
The Critical Question: Who caused the delay?
Against this background, one question becomes decisive: Who is responsible for the delay in handover?
- Where the delay is attributed to the buyer—such as incomplete registration, missed appointments, or unstructured defect claims—service charge liability is likely to apply.
- Where the delay is clearly attributable to the developer—such as incomplete works, material defects, or missing approvals—liability may shift.
In practice, however, most cases fall within a grey area, where the outcome depends on how the facts are documented, timed, and interpreted.
Where Buyers commonly get caught
It is within this grey area that exposure most often arises. Buyers frequently assume that no handover means no cost, do not review how service charge liability is triggered in their contract, raise concerns without formal legal structure, or delay action while expecting the situation to resolve itself. By the time the position is clarified, liability may already have accrued.
Practical steps to manage exposure
Given how these situations develop, the focus should be on structure and timing.
Before handover, buyers should understand when service charge liability is triggered and how their contract allocates risk. During any delay or dispute, communication should be formalised, defects properly documented, and a clear timeline of events maintained.
If charges are imposed, the basis, calculation, and timing should be carefully reviewed before any position is taken. Ultimately, outcomes depend less on the existence of a delay, and more on how that delay is managed and evidenced.
Where Motei & Associates can assist
These situations typically turn on contract interpretation, evidence, and procedural handling. We assist clients by advising on service charge risk before handover, structuring and formalising disputes to clearly establish responsibility for delay, reviewing and challenging the basis and timing of service charge claims, and representing clients in RDC proceedings and enforcement stages.
Final Perspective on paying without possession
This is not a new obligation—it has always existed within Dubai’s property ownership framework. What has changed is how it is now being interpreted, applied, and enforced in practice.
The recent RDC clarification removes ambiguity that previously allowed for differing assumptions, particularly among off-plan buyers. As a result, service charge liability is now approached with greater consistency and less flexibility, especially where delay in handover can be attributed to the buyer.
The key shift is practical:
- Delaying handover no longer delays financial exposure where the delay is linked to the buyer
- What is often treated as a routine delay can quickly become a structured financial exposure
- Outcomes are determined by evidence, timing, and how the position is managed—not assumptions