Your service charges explained
This is a guide to provide an owner of a property managed by The Pearl Owners Corporation (TPOC) an insight on the quarterly service charges. The guide explains in detail the basis and calculation of the service charges, how the general fund and reserved fund budgets are created and outlines the areas of operation, maintenance, and common area rectifications and their impact on the service charges.
This guide will also cover the responsibilities and obligations of the property owner and guide the owners on the methods to complete their service charges payments.
1. What are service charges?
The service charges consist of two items:
• The Common Area service charge.
• The Master Community service charge.
The Common Area’s service charge is each owner’s financial contribution to the necessary services offered in the common area of the property. The services are formed of the routine operations such as security, cleaning, concierge and landscaping. It includes the common area preventive maintenance, common area rectifications and enhancements.
The common area’s service charge rate is computed based on the predicted annual expenditure to maintain the operation and maintenance of the common areas of the property. The common area’s service charge’s annual budget is approved by the owners at the Annual General Meeting.
The Master Community’s service charge is calculated by the master developer of The Pearl Island to maintain the island infrastructure such as the cleaning & pest control, roads, streetlights, landscape, waste disposal system, Island security and utilities. It ensures consistency in community facilities development such as beach, parks, play equipment’s, recreation facility, tennis and paddle courts. The service charge budget is based on a ‘Non Profit’ model and is annually audited by third party external auditors. The components of the service charges consist of:
• Common Area Service Charge (General Fund and Reserve Fund)
• Master Community Service Charge
• Motions Service Charge
The common area and motions service charge varies from year to year and is based on estimated expenditure.
2. What is included in the common areas general fund?
The common areas general fund is generated to cover the expenses of the property operations.
The expenses are derived from the facility management service provider expense, common area utilities consumption, landscape, maintenance of the common areas infrastructure, systems and soft services such as concierges, cleaners, and security officers.
Additionally, the common areas general funds include the expenses of the common area enhancements proposed by The Pearl Owners Corporation (TPOC) at the Annual General Meeting
(AGM) which have been requested and approved by the attended owners.
The following list is a brief description of some of the major items that make up these elements of the service charge.
The items of expenditure are based on both fixed contract and variable costs for the forthcoming year.
Facilities Management
Facilities management of the common areas includes the management of the soft services such as landscape, preventive maintenance, concierges and cleaners and includes the maintenance of the property assets and systems such as Building Management Systems (BMS) & CCTV.
Insurance
The insurance covers the strata insurance of the property core & shell which includes the facilities, and amenities by a reputable insurance company in terms of all risks and third-party liability. Apartment owners are advised to insure their property to cover its contents and personal effects.
Utilities – Electricity & water, and District cooling
Utility costs include two items, Kahramaa bills which cover the common areas electrical and water consumption. Qatar Cool covers the cooling consumption of common area corridors.
Maintenance, Repairs and Enhancements
The common areas preventative maintenance, Adhoc repairs or replacement of the property systems and assets are included in the common areas service charges. An approved enhancement budget is allocated at the annual general meeting to cover minor common area enhancements requested by the Owners.
Lifts and Electrical Substation
Lifts and electrical substations include the monthly maintenance of the common area lifts and the annual servicing of the property substations electrical transformers powered by Kahramaa.
Management, Administration and Legal
The association management services, includes expenses of the administration fees, association management fees, accounting, and customer services. Additionally, it covers the external auditing, legal expenses, and banking fees.
Fire Safety Equipment
The Fire Fighting and Fire Alarm systems costs cover the maintenance and rectification of the health and safety systems by a specialized service provider, this covers the maintenance of the smoke detectors, heat detectors and water pumps.
Security and CCTV
The security and CCTV expenses cover the cost of deploying security officers to manage and control any unauthorized access to the property. The CCTV maintenance costs are to ensure the surveillance cameras are consistently operational to ensure 24/7 monitoring of the property common areas.
Cleaning, Pest Control and Waste Management
The common areas cleaning expenses cover the cleaning of common area corridors, lobbies and hallways, trash rooms, parking areas, lifts, and amenity areas. The façade and window cleaning included. The pest control expenses cover necessary treatments for the prevention and extermination of pest infestations within the common areas. Waste management covers the removal of domestic waste, collection of bulky items and green waste collections in an environmentally friendly procedure.
Landscaping expenses cover the cost of the gardeners’ visits to maintain the liveliness of the common areas landscape
3. What are the common areas reserve fund?
A reserve fund is a long-term savings account that all owners contribute through their service charges. The annual financial accumulation in the common areas reserve is to financially safeguard the property common areas in the occasion of unplanned major expenses. Such major expenses include replacement of major system equipment such as lifts, backup generator or transformers that are property assets and are a necessity to ensure the continuity of the operations.
The purpose of a reserve fund is that the contributing owners will over the years be gradually contributing for major rectifications or enhancements instead of facing a one-time high increase in the service charges at the point of replacement.
4. What are Master Community service charges?
The Master Community within The Pearl Island includes the maintenance of roads, parks, beaches, play areas, recreational facilities, street lighting, utility infrastructure, security, and cleaning in these areas. The master developer of the community is fully responsible to manage the expenses on the community facilities and developments in The Pearl Island.
5. Are the service charge audited?
As part of our governance, we are required to appoint an external auditor to annually verify the final service charges expenditures. The auditor’s responsibility is to review the expenses incurred and ensure the expenses charged are not inflated. Additionally, the auditor will to ensure the financial statements for the given year represent an accurate record of the common area’s assets, liabilities, and financial position. Audits are conducted in accordance with International Financial Reporting Standards (IFRS).
6. How are service charges distributed amongst different types of residential properties?
A tailored budget is created for each association depending on the size of the property and the association. Budgets differ for each tower, townhouse, and low-rise building depending on the systems installed, manpower required to manage the property common area and similar factors.
Each association budget is applicable to that association only.
Upon obtaining the budget approval from the attending owners at the Annual General Meeting it is then distributed based on participation quota (PQ) ratio which is an internationally recognized and recommended practice in the GCC. The PQ ratio is the recommended cost allocation to ensure fairness in sharing the expenses amongst all owners depending on the size of the apartments.
7. What does the management fee cover?
Management fees cover the management of the administrative and operational cost of the services for the maintenance of the common area.
8. Why can’t the common area service charges be fixed?
The service charges is a non-profit operational budget that may vary from one year to the next, it may increase or decrease. The Pearl Owners Corporation (TPOC) will continuously focus on minimizing the expenses required to manage the association.
Multiple factors can affect the service charges and the annual budget to manage the property such as an inflation, price rises from suppliers/contractors and changes to service levels and staffing.
TPOC annually conducts a thorough review of the property managemented budgets to apply cost saving measures without impacting on the quality of services deliver.
Your contribution is valued and therefore we aim to deliver the best quality services at a competitive market price.
9. How is a surplus or a deficit being managed?
If a surplus arises due to lesser expenditure than the budgeted amount for the year, the surplus is credited to the owners in the following year’s budget.
In case of a deficit, due to over expenditure than the budgeted amount for the year, the amount is charged to the owners in the following year’s budget. However, a deficit should only arise under exceptional circumstances due to an unpredicted expense.
10. Why do the owners pay for the services they do not use?
Owners are required to contribute their fair share for the cost of services to maintain the general upkeep of the property’s external appearance, internal common areas maintenance and continuous operation of the property to ensure its serviceability and meeting the standards.
For example, if an owner is charged for lift maintenance but always uses the staircases the owner is still liable to pay for this service as it is available for use when needed.
11. Who pays the share of unsold apartments?
If an apartment remains unsold, the developer of the property is responsible for the costs that would be attributed to the unsold apartment.
12. Why should the owners pay while visitors do not?
The community visitors are restricted from accessing the master community areas such as parks and beaches, or the property common areas swimming pools, gymnasiums or any other amenities which are for the exclusive use by residents and their guests.
13. Do all owners have to pay the service charges?
All owners are legally obliged to pay the service charges as stipulated in the Sales and Purchase Agreement (SPA).
14. I did not receive the service charges invoice, what should I do?
The service charges invoices are sent on quarterly basis to the registered email address on the Sales and Purchase Agreement (SPA). If an owner wishes to change the contact details, please contact The Pearl Owners Corporation (TPOC) on: Office: +974 44095217 E-mail: enquiries@thepearlowners.com / tpoccollection@thepearlowners.com
15. When is the service charges due?
The service charges are payable quarterly in advance and the payment will be due within 30 days from the date of the invoice issuance. The service charge year is aligned with the budget, which is from 01st of January to 31st of December.
16. What happens if an owner does not pay the service charges?
If an owner refuses to pay the service charges, he will be in breach of the Sales and Purchase Agreement (SPA). The resident of the apartment will be restricted from accessing the common area amenities.
The Pearl Owners Corporation (TPOC) encourages all owners to perform their payments by the due date to avoid any legal action.
A late penalty fee may also be applicable for each month that an owner does not settle outstanding service charges dues.
17. How can I pay my service charges?
An owner can perform payments via bank transfers, by debit or credit card, through the community portal or mobile application.
An owner may visit in person the collection officers’ front desks at UDC offices in Medina Centrale.
More details are available on the service charges invoice cover letter.
18. Where can I get more details?
If you wish to request further details, please do not hesitate to contact
The Pearl Owners Corporation (TPOC) on: Office: +974 44095217
E-mail: enquiries@thepearlowners.com / tpoccollection@thepearlowners.com
