Part of the service charge you pay on a Dubai apartment does not go on this year's running costs at all. It goes into a reserve fund, which exists to pay for the expensive things a building needs once a decade rather than once a month.

What is it for?

Lifts, chillers, roof waterproofing, facade work, pumps, fire systems. Items that cost a great deal, fail rarely, and cannot be deferred once they go. The reserve fund spreads that cost across the years so no single year brings a bill nobody budgeted for.

It is separate from the general fund, which covers the day to day: cleaning, security, insurance, landscaping, common area electricity.

Why a buyer should care

Because you inherit the building's position, not just the flat. Two towers can charge the same service charge per square foot while one has been quietly funding its reserve for a decade and the other has not. When the chillers fail in the second, the owners are asked for the money directly, and that request lands on whoever owns the flat at the time.

This is one of the least examined risks in Dubai apartment buying, and it is entirely checkable before you commit.

What should I ask before buying?

What the service charge splits into, general fund against reserve fund. If nobody can tell you, that itself is informative.
The reserve fund balance, and whether it is considered adequate for the building's age and equipment.
Whether there has been a special levy in recent years, or one being discussed. A history of levies suggests chronic underfunding.
The age of the big items. A twelve year old building with original lifts and chillers has expenditure coming, whoever owns it.
Whether service charges are paid up on the unit you are buying. Arrears can follow the property.

Who decides the amount?

Service charges in Dubai are reviewed and approved rather than set at a developer's discretion, and the approved figure for a building is a matter of record. Our guide to service charges in Dubai covers how that works and what the money buys, and owners associations explains who administers it.

Is a low service charge good news?

Not by itself, and this is where buyers get caught. A building with a very low charge is either genuinely efficient or is not funding its reserve, and the two look identical on a listing. The second is cheaper every year until the year it is not.

What you want is a charge that looks reasonable for the amenity on offer, with a reserve fund that has actually been accumulating. If you are weighing two buildings and cannot get a clear answer on either, ask us to look before you sign.