10.4 Owners Committees, Management Entities and Collecting Unpaid Service Charges
Key Takeaways
An owners committee has at most nine members appointed by RERA and is formed once at least 10% of units are registered to owners (Article 22).
Committee members must be resident owners of good character who pay their charges; a developer may sit only if it owns unsold units.
The committee's duties are exclusive and advisory, such as reviewing budgets and asking RERA to replace a Category 3 management company (Article 24).
If an owner does not pay within 30 days of a RERA-approved written notice, the management entity's claim is enforceable by the RDC execution judge (Article 32).
The execution judge may order the unit sold at public auction, and the defaulting owner bears court and advocates' fees.
10.4 Owners Committees, Management Entities and Collecting Unpaid Service Charges
This section completes the JOP module: who represents owners, who runs the building, and what happens when an owner does not pay.
1. Owners committees (Articles 22–24)
| Rule | Detail |
|---|---|
| Size | Up to 9 members appointed by RERA, including the chairman and vice chairman (Categories 1 and 3) |
| When formed | Once at least 10% of the units are registered in owners' names |
| Member requirements | Full legal capacity; an owner residing in the property; good character and repute; pays service and usage charges; attends and participates |
| Developer | May be a member only if it owns unsold units |
| Chairman | Elected by the committee; represents it before the management entity and RERA |
| Changes | Membership ends if a member stops meeting the requirements, and RERA appoints a replacement; RERA may reconstitute the committee at any time |
| Meetings | Every three months (four a year), the first within 30 days of formation; quorum is a majority including the chairman or vice chairman; one vote per member regardless of units owned; the chair has a casting vote |
Duties (Article 24), which are exclusive:
- Verify that the management entity manages, operates, maintains and repairs the common parts properly.
- Review annual maintenance budgets and make recommendations, requesting financial reports.
- Discuss difficulties and recommend solutions to the management entity or RERA.
- Receive owners' and occupants' complaints, pass them to the management entity, and refer them to RERA if not addressed within 14 days.
- Request RERA to replace the management entity of a Category 3 project and advise on the choice of a new one.
- Report structural defects or urgent repairs.
- Coordinate with RERA and authorities on safety, environmental and security matters.
- Propose changes to the use of common parts or the building management regulation (which RERA must approve).
Important
The list does not include signing contracts, hiring staff or holding money. Those belong to the management entity, which concludes the maintenance, security, cleaning and insurance contracts (Article 34).
2. The management entity's obligations
- Contracts and reports (Article 34): concludes service contracts and reports to RERA every six months.
- Repairs ordered by RERA (Article 35): if common parts are not maintained, RERA may order works and, if they are not done, appoint someone else and charge the service charges or usage charges account.
- Bank guarantee (Article 36): guarantees repair of damage caused by its negligence.
- Replacement (Articles 37–38): an incompetent developer or hotel management company can be replaced by a management company appointed by RERA's CEO; for a Category 3 management company RERA consults the owners committee, gives a written warning with 14 days to respond, appoints an auditor and requires handover to the new company within 30 days.
3. Collecting unpaid service charges (Article 32)
- Lien: the management entity has a lien on the unit for unpaid charges, and the unit may not be disposed of until they are paid.
- Notice: the owner gets 30 days from service of a written notice approved by RERA; RERA decides how notices are served.
- Enforcement: after 30 days the claim is enforceable by the execution judge at the RDC, under the RDC's procedures, without a full trial on the merits.
- Auction: where necessary, the execution judge may order the unit sold by public auction to collect the charges.
- Costs: the defaulting owner pays court fees and any advocates' fees ordered.
- Usage charges: the same rules apply to usage charges owed to master developers.
4. What the management entity must not do
Article 29 forbids a developer or management entity from preventing an owner from taking possession of or using the unit, the common parts or common facilities to force payment outside the legal procedure. Cutting air conditioning, disabling access cards or blocking parking to pressure a defaulting owner (or that owner's tenant) is therefore unlawful; the lawful route is Article 32.
5. Penalties, grievances and disputes
- Fines (Article 44): violations are fined under an Executive Council resolution that lists the acts and amounts; repeating a violation within a year doubles the fine, up to AED 2,000,000.
- Grievances (Article 46): a person affected by a decision may file a written grievance with the DLD Director General within 30 days; a committee decides within 30 days, without prejudice to recourse to the RDC.
- Disputes (Article 42): the RDC has exclusive jurisdiction over disputes under the law.
The owners committee of a JLT building votes unanimously to end the security contract and sign a new AED 300,000 contract directly with another firm. What is the status of the new contract under Law No. 6 of 2019?
It is not a valid committee act: the committee's duties are exclusive and advisory (Article 24), and service contracts are concluded by the management entity (Article 34)
It is valid if all nine members sign before a notary
It is valid if it is cheaper than the old contract
It is valid once 51% of all owners countersign
An owner owes AED 28,000 of approved service charges and ignores the management company's written notice in the form approved by RERA. Thirty days pass. What is the company's remedy under Article 32 of Law No. 6 of 2019?
File a full civil lawsuit and wait for trial and appeals
Its claim becomes enforceable by the execution judge at the RDC, who can order execution measures including, if necessary, a public auction of the unit
Disconnect the unit's electricity and water until paid
Deactivate the owner's parking and lobby access
A landlord is three years behind on service charges and has let the apartment. The management company disables the tenant's parking card and asks the chiller provider to cut the unit's air conditioning. How does Law No. 6 of 2019 treat this?
Lawful, because charges follow the property
Lawful if 48 hours' notice was given by message
Unlawful: Article 29 forbids preventing the owner from using the unit or common parts to force payment, and collection must follow Article 32 through the RDC
Lawful for air conditioning but not for water
A developer still owns 60 unsold units in a Category 3 building and wants a seat on the owners committee. What does Article 22 of Law No. 6 of 2019 allow?
Developers are always excluded from owners committees
The developer may chair the committee automatically
The developer may be a member only if it owns unsold units in the property, as here
The developer may sit only after all units are sold
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