In 2023, Abu Dhabi made a headline-worthy change: the Abu Dhabi Real Estate Centre (ADREC), part of the Department of Municipalities and Transport (DMT), announced a 6% reduction in service and community charges for jointly owned properties across the emirate.
This cut wasn’t just a number — it’s a signal of how regulatory policy can meaningfully influence the cost structure for property owners and investors. In this article, I’ll break down:
- What the 6% reduction means in practice
- Other 2025 regulatory updates and incentives
- How buyers and landlords can strategically benefit
Let’s dive in.
What Does the 6% Reduction Mean for Owners & Investors?
The Headline: Savings across the Board
ADREC’s policy change meant that, in aggregate, property owners saved AED 39.7 million across jointly owned properties when comparing 2023 to 2022 fees.
Service and community charges refer to the costs associated with maintaining common areas and shared facilities (e.g. landscaping, lighting, security, pool maintenance, corridor cleaning). The 6% cut means those recurring costs are now lighter on annual budgets.
How Much It Saves You Annually
The actual savings depend on the scale of your property and the prior charges. Let’s consider a few hypothetical examples:
| Property Type | Annual Service & Community Fee Before Cut | Approx. 6% Reduction | Annual Savings |
| Mid-size apartment | AED 20,000 | AED 1,200 | AED 1,200 |
| Luxury villa / townhouse | AED 100,000 | AED 6,000 | AED 6,000 |
| High-end branded residence | AED 300,000 | AED 18,000 | AED 18,000 |
These are illustrative, but they show that for larger properties, the savings can be material. Over time, these reductions improve net yields for investors and reduce the total cost of ownership for end-users.
Other Benefits Beyond Pure Savings
- Improved ROI / yield: Lower costs push net returns higher.
- Better cash flow for landlords: Less burden helps withstand rental pressure.
- More competitive pricing: Some developers or communities may pass part of the savings to attract buyers.
- Increased investor confidence: Policy acts like this build trust in stability and regulation.
According to ADREC, the move was intended to “streamline property management, cut operational expenses, elevate returns on real estate investments, and offer competitive pricing for homeowners.”
Other Regulatory Changes & Incentives in 2025
The 6% fee reduction is only one piece of a larger wave of regulatory tweaks. Here are key updates in 2025:
1. New Real Estate Law – “Triple Protection” (Law No. 2 of 2025)
As of 2 August 2025, Abu Dhabi introduced a new law to strengthen oversight and protection across developers, purchasers, and financiers.
- Escrow stricter rules: Developers can only access funds after 20% project completion to reduce risk of stalled projects.
- Clearer mortgage frameworks and central registration aims to raise transparency.
- Enhanced enforcement for service charges: non-payment may now trigger penalties or registration restrictions.
These measures increase confidence for buyers and reduce downside risk in off-plan investments.
2. Off-Plan Contracts: Developer Termination Rights
A major change: developers can now terminate off-plan contracts under certain conditions if the buyer breaches contractual obligations — subject to defined procedures.
This gives developers a more agile legal recourse, but also limits buyer rights — so it’s important for buyers to fully understand their contract obligations (payments, deadlines, conditions).
3. New Governance Over Advertising & Listings (Madhmoun Platform)
To reduce misrepresentation, all online property listings in Abu Dhabi now require a permit via ADREC’s Services Portal to be published. Unverified or non-compliant listings may be removed or penalized.
Additional rules restrict each listing to a maximum of three brokers and align listing data with official ownership records.
This fosters transparency and reduces fake listings or misleading promotions.
4. Licensing & Market Compliance for Agents & Brokers
Since mid-2024, ADREC started penalizing agents who operate without a Broker License Number (BLN) or who post unregistered/off-plan projects online.
From 19 September 2024, all real estate agents must hold a valid Abu Dhabi real estate license as part of regulatory oversight.
This raises professionalism in the industry and protects buyers against unscrupulous intermediaries.
5. New Ownership & Management Rules in Joint Properties
Under the new DMT / ADREC updates:
- Owners’ Committees (replacing less formal owner associations) will have regulated responsibilities, primarily advisory and supervisory in nature.
- The definition of “real estate activities” has expanded to include brokerage, operations, valuation, etc.
- New penalties for breach of real estate rules, such as restrictions on property disposal, fines up to AED 2 million, or registration blocks, may come into play.
These shifts show that Abu Dhabi is gearing toward stronger rule-based governance in its property market.
How Buyers & Landlords Can Take Advantage
Knowing these changes is one thing — leveraging them is another. Here are strategies to stay ahead and benefit:
✅ For Buyers / Investors:
- Push for lower operating cost negotiation
In new contracts or purchases, reference the 6% reduction. Some developers or sellers may absorb part of cost relief (e.g. reduced common charges) as a selling point. - Prioritize projects under the new law / escrow protections
Off-plan projects that comply with stricter escrow rules carry lower risk of delay. Always verify whether developer follows the new 20% completion rule. - Confirm listing authenticity via Madhmoun / ADREC portal
Only rely on verified listings; avoid deals based on ads not permitted or non-compliant. - Negotiate owner incentives
Developers may offer incentives (bonus payments, free service charge periods) to entice buyers, using the cost savings margin. - Factor lower fees into yield models
When calculating projected ROI, reduce the service & community charge component by 6% (or more, depending on community recovery) to refine your investment model. - Watch off-plan termination clauses carefully
Be rigorous in meeting contract obligations, deadlines, and conditions. Use legal support to interpret buyer protection rights.
✅ For Landlords / Property Managers:
- Pass savings to tenants partially
In competitive markets, you may lower net effective rent slightly while maintaining attractiveness, but still retaining margin thanks to lower charges. - Show lowered cost advantage in your marketing
Stress “reduced service/community charges” as a value add to tenants. It can differentiate your property. - Stay current with regulatory compliance
Ensure your property is properly registered with ADREC, owners’ committee structures are in place, your listings are permitted, and your agent is licensed. - Enforce timely payments
With stronger enforcement powers under the new law, ensure tenants or co-owners pay their charges on time to avoid penalties, liens, or registration flags. - Use community savings for upgrades or amenities
Some of the cost relief margin can be reinvested to improve shared facilities — increasing property appeal, tenant retention, and potential for higher rents.
Final Thoughts
The 6% reduction in service & community charges in Abu Dhabi wasn’t just a cost-cutting move — it was a statement of intent. It shows that regulatory bodies are willing to intervene to maintain affordability, trust, and competitiveness in the real estate market.
But the real story lies in 2025’s broader policy shifts: stronger buyer protection, greater transparency, tighter oversight, and more accountability. For buyers, landlords, and investors, these changes create both opportunities and responsibilities.
If you’re looking to leverage these changes — whether you’re buying, investing, or managing properties — I’d be happy to help you navigate the best strategies tailored to your portfolio.
