The question of service charge

 

Khalid Ababneh, Chairman of Deyaar Community Management (DCM), provides a realistic assessment of a few of the challenges community managers endure when it comes to service charges

 
April 19, 2022 Community Management
 

The question of service charge
 

The community management industry in the UAE is currently coping with numerous complexities that stem from a lack of awareness among residents. 

In an exclusive interview with CM Today magazine, Khalid Ababneh, Chairman of Deyaar Community Management (DCM), provides a realistic assessment of a few of the challenges community managers endure when it comes to service charges.

According to Khalid, the majority of owners in jointly owned communities are unaware of the existence and purpose of service charges.

The owners must understand that the service charges are budgeted for the purpose of maintaining the common area, providing security for residents, enhancing community well-being, and jointly owned the property on which they live. These funds are not distributed to the developer or community management organization. The reserve fund contribution included in the service charge each year represents the return and investment value of future asset repair and maintenance.

There is ambiguity among homeowners regarding which AC charges are covered by common service charges. “They must differentiate between common area service charges and air conditioning charges consumed by individual units. ,” he says.

He emphasizes that any surplus monies from service charges following the fiscal year are transferred in to the community's reserve fund escrow account, not in the developer's or community management company's profit. Since the fees of the community management companies are fixed by the Real Estate Regulatory Agency (RERA).

Homeowners, believing it is an unnecessary expense and are always requesting a reduction in service charges. However, a significant drop might be damaging to the community's long-term well-being and investment of their own property.

“Perhaps a community management business might successfully mitigate the effects of the changes, but the associated costs must be evaluated. At the end of the day, residents and homeowners will expect high-quality services regardless of the charge."

He continues, "For example, if a community management company agrees to lower rates, residents must understand what they are receiving for this reduction. Maybe the company will reduce the number of security guards from two to one, or their working hours will be reduced. The residents will then complain about the lack of 24-hour security service and safety of residents. At the end of the day, without appropriate funds, we cannot provide a high-quality service.” 

Nevertheless, he accepts that it is not acceptable to completely ignore the needs of homeowners. “It is not right to underestimate the values. We will do our best to achieve it. That's our business, and that's our duty care.” 

To this end, community management companies must look for innovative ways to reduce charges without impacting the quality of service. 

Giving the example of Deyaar, Khalid explains that one of the strategies they have devised is integrating the community management department in the planning process of the building. “At Deyaar, the community management team maintains a close coordination with the development team before the launch of any project. Deyaar Development takes absolute feedback and an understanding from the community managers as individuals. This helps our customers in having the most value in their buildings and the best systems from the beginning, rather than trying to solve difficulties later.”

Another initiative that DCM is pursuing is the adoption of new energy management practices. As the majority of the service charge is used to manage the building's utilities, improving the building's energy efficiency is one strategy to minimize owners ' service charges. "While the difference would be negligible, it is an angle we are exploring.” 

Additionally, the company is committed to transparency regarding the manner in which the service charge is used. According to Khalid, it is critical to be transparent and receptive to communication in order to overcome today's issues. "It fosters a sense of community. "We must maintain open communication with both our customers and the government. We continue to meet with both on a monthly basis at the very least. The authorities are quite cooperative and attentive to the issues we raise, and our clients understand that we are not concealing anything when we communicate honestly with them.” 

By winning client loyalty and embracing innovation, DCM aspires to become one of the UAE's leading providers of community management services.

DCM is expecting to more than double the number of units it manages, from 9,000 to 20,000, within a span of two years. 

Despite the industry's high level of competitiveness, Khalid feels the aim is reachable. "Of course, I believe that with enough effort, anything is possible. "There is no such thing as an impossibility," he observes.

At the moment, community management is a highly sought-after service for businesses, and many individuals are gravitating into the community manager profession. The vast number of developments and mixed-use developments currently in the pipeline adds to this trend's momentum. "The opportunities are expanding at a breakneck pace. Nowadays, everyone aspires to be a community manager. "It's a hot field," he remarks. 

Competition is fierce, which drives businesses to go above and beyond to improve the services they provide to homeowners and developers alike. "There is a high level of competitiveness and considerable room for advancement."

Though community management is a popular career path at the present, he acknowledges that the profession now has unique obstacles due to the fact that it is a relatively young subject with gaps in public understanding of the role. "The government authorities are making strenuous efforts to close the gaps. Not every regulation is simple to implement. It moves at its own pace. However, with close communication and collaboration from the authorities, I believe we will obtain optimal solutions very soon."

Khalid remarks that achieving a 100% satisfaction rate from community residents in the UAE is unrealistic. “It's really hard to satisfy all the clients. With such a diverse population of nations and cultures, there will always be disparities in their wants, likes, and desired amenities."

But this diversity and unity of cultures is also what makes communities in Dubai different and unique. For DCM, Regular community gatherings and events, according to DCM, are an excellent way to bring people from various walks of life together and build residents together. 

We strive to accommodate the community's diverse cultures through our events. For instance, if we held a Christmas party, everyone, regardless of faith, would participate, which is, in my opinion, one of the best aspects of this country. We coexist peacefully and safely here, appreciating all seasons, cultures, and beliefs. You have the atmosphere of a big family."

Basically, the events contribute to the community's and investors' value growth. It is not solely for entertainment purposes. For homeowners, events bring joy, a community spirit, and a sense of togetherness. He remarks

The question of service charge  

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