Unpaid Service Charges Could Impact UAE Property Owners’ Credit Scores

Dubai’s thriving real estate market continues to attract global investors, residents, and homeowners. However, alongside the benefits of property ownership comes an increasingly critical responsibility: paying service charges on time. What was once a maintenance obligation is now evolving into a major financial factor with real consequences for your credit score in the UAE.

The Etihad Credit Bureau (ECB) is preparing to include property-related service fees in the country’s national credit registry. This means missed payments on quarterly service charges may soon carry the same weight as defaulting on credit cards or personal loans.

The New Reality: Miss a Payment, Damage Your Credit

Property owners in Dubai and across all Emirates are now entering a new era where service charge defaults don’t just impact building maintenance; they could also restrict financial access. If unpaid, these dues may appear on your credit report, limiting your eligibility for:

Personal loans or mortgages

Business financing

Competitive interest rates on existing credit

Future real estate investments

According to Marwan Ahmad Lutfi, Director-General of the ECB, “Whether it’s rent or service fees, individuals are expected to pay on time just like any other credit facility. This will apply across all Emirates.”

This move marks a significant policy shift that aligns property-related obligations with formal financial discipline

Why This Move Is a Game-Changer for UAE Property Owners

Previously, if an owner failed to pay service charges, the consequences were mostly confined to the property itself. For instance, they couldn’t rent out their unit without a valid Ejari certificate or finalize a sale until dues were cleared. Legal enforcement was rare, and during post-pandemic recovery, many owners deprioritized payments due to reduced rental income.

That’s no longer sustainable. As service fees become part of an individual’s credit profile, a bad credit rating could now

Delay or deny loan approvals

Increase borrowing costs

Undermine entrepreneurial ventures

Impact overall financial reputation

This shift compels homeowners to treat service charges with the same urgency as mortgages, utilities, or EMIs.

Why Are Service Charge Defaults on the Rise?

Despite some improvement in 2024, non-payment of service charges is again becoming a concern in 2025. A key reason for this is the April 2024 flooding in Dubai, which caused extensive damage across numerous buildings and communities. While some repairs were covered by insurance, much of the cost came from property reserve funds leaving many buildings cash-strapped.

To recover, service charges have increased in 2025, placing more pressure on homeowners in freehold developments. The Dubai Land Department (DLD) attempted to ease the situation by introducing 6-month payment plans in March, allowing residents to repay dues without penalties. But this may be a temporary cushion, especially now that credit reporting is being tied to payment behavior.

Why Linking Service Charges to Credit Scores Might Work

Many in the property and facilities management industry welcome the ECB’s initiative. For years, developers and owners’ associations have struggled with late or non-payments, which directly affect the maintenance and quality of communities.

A senior executive from a Dubai-based property firm noted, “If missing a service charge payment hurts someone’s credit score, that’s a real incentive to pay. This approach treats service charges with the same seriousness as any other financial commitment.”

This reform reflects a broader UAE trend: integrating civic duties with financial accountability. It reinforces the idea that real estate ownership also means contributing to the sustainability of shared environments.

What UAE Property Owners Should Do Now

If you own a property in Dubai or any other emirate, you need to be proactive. Here's how to stay ahead of the upcoming changes.

Automate Service Charge Payments
Set up automatic bank transfers or direct debit with your property manager. Avoid accidental delays and missed due dates.

Stay Informed About Your Dues
Track your quarterly or annual service charge bills. Understand exactly what you owe and when payments are due.

Use Flexible Repayment Plans if Needed
If you’ve fallen behind, contact your community or building management. Most offer flexible plans that can help you avoid penalties and negative credit reporting.

Monitor Your UAE Credit Score
Register with the Etihad Credit Bureau. This lets you track your credit report and ensures you catch any errors or missed payments early.

A Smart Step Toward a More Accountable Market

This development isn’t just a policy update it’s a mindset shift. For too long, service charge payments have been seen as secondary expenses by some property owners. By integrating them into the national credit system, the UAE is creating a more responsible, stable real estate ecosystem.

Homeowners, landlords, and investors alike should treat this change as a wake-up call. Paying service charges on time now affects more than just your building it affects your financial future.