We unlock the complex issue of tenancy rules in Dubai
As Dubai rang in the new year on December 31 2011, hundreds of residents on the Palm Jumeirah were banned from watching the annual fireworks display from the Palm’s beaches amid an escalating row over access to communal facilities. Nakheel, Dubai’s largest property developer, brought in security to bar people living in the Shoreline residences from stepping onto the beach, which, unsurprisingly, resulted in angry scenes and security guards warning residents they would be arrested if they tried to set foot on the sand without the necessary access cards.
The move came about after Nakheel aimed to privatise (ie, charge for) the Palm’s communal areas, such as the beach, pools and gyms, asking households to pay up to Dhs12,000 a year for access. However, at the time of going to press Nakheel appeared to be having second thoughts on this action, after the Real Estate Regulatory Authority (RERA) stated that denying access to those who had paid their maintenance fees was unlawful.
With cooling charges surging in The Gardens, rows over access cards in JBR and unfinished pool facilities in Discovery Gardens, it seems 2012 is the year in which tenants are no longer prepared to accept bad treatment from landlords and developers. To make matters easier, we’ve interviewed local real estate agents and property experts to compile this guide for tenants. Shane McGinley is chief reporter at Arabian Business.
Agents Q: Are there any UAE laws concerning the fees that real estate agents can charge? A: ‘The norm is to charge five per cent of the annual rental value or Dhs5,000, whichever is higher,’ explains Priyesh Patel, an agent at Aston Pearl Real Estate. ‘There are no set laws for fees; it is common for agents to charge both the landlord and tenant. This is always a case for negotiation,’ she advises.
Q: What licenses do you have to have to become an agent? A: ‘Each agent has to be RERA (Real Estate Regulatory Association) qualified,’ states Mario Volpi, head of residential sales and leasing at Cluttons. ‘This can only be achieved after passing an exam and being checked by the police.’ You should therefore check that each broker has a valid RERA card.
Q: Should I ask for any other documents? A: ‘Always ask for the copy of the title deed or proof of ownership,’ says Patel. ‘Beware of agents who have leased the property into their own company names and then want to sublease back to you. There have been cases where the agent has disappeared and the owner’s cheques have been returned unpaid. In this case as a tenant you have no rights and you must vacate.’
Talking point Tenancy Contracts Q: What should I check for in my contract? A: ‘Double-check the terms and conditions, dates, notice periods, what provisions there are for early termination, and that the property is registered at EJARI (www.ejari.ae, which means ‘My Rent’ in Arabic),’ advises Volpi. Nicole Davis, head of content at propertyfinder.ae, states: ‘What’s included in a contract can vary from community to community, building to building and landlord to landlord. A good starting point is to check which utilities are included in the rental price. Some places consider internet access a utility; others don’t. Also, are there any communal fees or service charges that you may have to pay for? If your property uses district cooling, make sure you check who is responsible for the fixed load charge. There are no clear legal requirements and some landlords will pay this, others won’t.’
Q: I can’t afford a lawyer. Will anyone else check over the contract for me? A: ‘If you’re in doubt about any tenancy contract but cannot afford a lawyer, I would advise asking your company’s HR department to look over it for you,’ suggests Volpi.
Q: Do different rules apply in different areas of Dubai regarding things such as single women sharing an apartment? A: ‘Technically, sharing [by unmarried or unrelated people] is not allowed, although it is usually tolerated in freehold areas only,’ says Volpi. Freehold areas include Dubai Marina, Downtown and the Palm Jumeirah. ‘Apartments in predominantly expat areas have a higher degree of sharers, but villas in non-freehold areas such as Jumeirah, Deira or Mirdif are not allowed to house sharers other than families.’
Q: I want to move out, but my contract is not up yet. Is there any way around this? A: ‘The law isn’t specific about this area,’ says Davis. ‘If you have paid in advance with post-dated cheques – as most people do in Dubai – nothing exists to ensure money will be returned.’ ‘If you need to break your contract before it expires, the first port of call is to negotiate with your landlord,’ continues Volpi. ‘If you have a legitimate reason to break your contract, the procedure would be to give your landlord two months’ notice, but expect to pay two months’ rent as a penalty too.’ You have been warned…
Q: Under what circumstances does the landlord have the right to keep my security deposit? What should I do in the event of a dispute? A: ‘The security deposit is refundable and should only be used by the landlord for repairs to the property that were the responsibility of the tenant,’ says Volpi. ‘Fair wear and tear is permissible, but it is also good practice to have the property redecorated and cleaned before you vacate it, assuming this was the condition of the property when you moved in. The rule of thumb is to hand it back as it was handed to you.’
Once you’re in your new pad Q: Are there any laws on how much I can change my apartment or villa, such as building new walls or renovating? A: ‘You will need to obtain the owner’s permission,’ says Patel. ‘In the case of new walls or total renovation, the owner may need the permission of the developers.’
Q: Why is it unacceptable to hang laundry on the balcony? A: ‘There are a few reasons for this: it can cause a hazard if there are cars below, and it also ruins the look of the buildings,’ says Patel. ‘Satellite dishes are often not allowed for the same reason.’
Q: Who has a right to hold a key to the property? How do I monitor this? A: ‘Technically, no one should have a key to the property unless it is agreed before the lease agreement is signed,’ explains Patel.
Disagreements With Landlords Q: What should I do if I have a quibble with my landlord, and in what order? A: ‘First, try to solve the issue amicably, and try to have as much written communication as possible,’ Patel explains. Then, talk to your Home Owners Association, although they can only do anything if you have a registered tenancy contract,’ advises Davis. ‘If you can’t solve the issue between yourselves, contact the Dubai Rent Committee (DRC, www.rpdubai.ae) and let them intervene and mediate,’ continues Patel. In order to file a dispute with DRC, a tenant must first ensure that the rent contract is registered with RERA. The fee to register a dispute is 3.5 per cent of the annual rent, with a minimum of Dhs350 and a maximum of Dhs20,000. The person bringing the case may also have to pay other costs. A representative from law firm Hadef & Partners says, ‘It is common for a tenant to claim the fees and costs back as part of their case but, even if successful, there is no guarantee they will be awarded them by the DRC. In some cases, the tenant and landlord split the final costs, but it is on a case-by-case basis.’
Q: What should I definitely not do? A: ‘Don’t use bad language, be aggressive or threatening, and do not stop paying rent and bills,’ says Patel. ‘If the utility bills are in your name, you are personally responsible for them.’
Q: Are there basic amenities my landlord must provide by law? A: ‘By law, the tenant has the right to enjoy the property without intrusion from the landlord. Provided he/she does not carry out any illegal or immoral activities, the landlord should allow privacy,’ clarifies Volpi.
Q: What are the basic tasks a landlord has to fulfil in the UAE? A: ‘The landlord should pay the services fees to avoid any loss of services, unless something has been agreed between tenant and landlord,’ Patel confirms.
Q: My apartment has been damaged after a small fire in my kitchen. I think the stove was faulty, but I can’t be sure. What should I do? A: ‘If you experience a fire due to a faulty appliance, obviously contact the landlord to inform him/her of the situation, and to see if he/she has insurance. We advise all tenants to insure their belongings, furniture and contents against theft and accidents due to fire, flood and so on,’ says Volpi. ‘If neither of you have insurance, it is the landlord’s responsibility to check the wiring and/or replace the faulty appliance if it was provided in the first place.’
Neighbours Q: My neighbours are noisy and antisocial. What should I do? A: ‘Try talking to them first – be calm and rational – because they may genuinely not realise they’re disturbing you,’ Davis advises. ‘Talk to other neighbours to see if they’re having similar issues: you could gather information as a group. If this doesn’t help, you could raise the issue with your HOA (Home Owners Association) if one exists, or perhaps talk to your building management or security.’ As a last resort, you could also report them to the police.
Subletting Q: I didn’t realise I was subletting my apartment, but have now been told I have to move out: what should I do? A: ‘Subleasing is illegal: there are cases of agents leasing properties in their names and asking owners to have a subleasing clause in the tenancy agreement,’ Patel says. ‘There have been cases where the agent has disappeared and the owner’s cheques have been returned unpaid. In this case as a tenant you have no rights and you must vacate.’
Eviction Q: I’ve been told I have to vacate my apartment/villa. What should I do, and in what order? A: ‘First of all, make sure the landlord is within his rights to evict you, as per the terms of your tenancy contract,’ Patel recommends. ‘If so, first arrange a removals company or make other plans to move your personal belongings. Next, you must ensure that you disconnect your DEWA, cooling, TV, phone and internet services, if applicable. If the owner is not within the rights of the contract, explain to the owner you will seek advice from Dubai Rent Committee and will not move until there has been a DRC meeting.
New to Dubai?
For those who have just arrived in the city, these basic property facts will help you to find your feet.
• First, make sure your lease is registered with Ejari (www.ejari.ae). If it’s not and anything goes wrong, you’ll have very little ground to stand on, so check that first.
• Find out if utility bills are included in your rental payments. If so, make sure you know who’s paying the electricity and water (DEWA), air conditioning (Empower) and TV/internet (du or Etisalat). If it gets cut off, you need to know who to blame.
• According to www.propertyfinder.ae, apartment rental searches dropped 15 per cent last year, while villas saw a 17 per cent surge in popularity, so remember this when negotiating with your landlord.
• At the same time, property rentals priced at less than Dhs100,000 a year saw a 30 per cent spike in interest, showing that renters are still not prepared to pay extortionate rents. In terms of areas, once again Dubai Marina is the most popular location. Here a one-bed apartment averages Dhs78,900 a year, a two-bed is Dhs120,000, a three-bed is Dhs160,900 and a four-bed is Dhs266,250. Go to www.propertyfinder.ae, click on ‘News and Advice’ and go to the ‘Renting’ tab to see the Dubai rental rates for January 2012, which provides a full breakdown of average rents in each area.
Readers’ testimonials and tips
Nicola, a graphic designer from the UK, recently went through the process of searching for a new apartment ‘Most agents charge a fee, which varies, but in my experience it can range from Dhs2,000 to Dhs5,000. I’ve yet to find an agent that I think deserved that money – one agent called to tell me he couldn’t make it to our pre-arranged appointment to view a property, and that I should just go by myself. It’s important to allocate plenty of time to search, as most agents won’t see you after working hours. Taking time off work is one option, or try to book appointments on a Saturday. Decide on your budget and areas of interest in advance, and when viewing a property, make a note of transport links and other amenities. Good luck!’
Brian, an engineer from Ireland, has just moved out of his Marina apartment and has some urgent advice ‘I recently decided to move from Dubai Marina to Downtown and my landlord’s agent was helpful – at first. Only when I was about to move did he tell me I hadn’t given two months’ notice so refused to return my remaining cheques. I asked some other agents and they said this is the industry norm. If I’d known, I’d have stayed in the apartment for another two months. My advice? Check when you sign your lease whether there are any penalties for moving out early – don’t wait to find out when you’re asking for your money back.’
Pitch your ideas now to win up to Dhs25,000 investment
JIJOU Nov 05, 2012 10:49 am
I have received a notification from my landlord to quite the studion i am currently renting as it is the end of our tenency agreement, but i definitly do not want to move as i have been here only since one year and i don't want to move now again.
Do you know if he has the right to force me to move ?
i keep calling the number 8004488 but the line is permanently busy.
leila Jan 25, 2012 09:34 pm
I would like to ask RERA DGP MIRDIFF Appartments has the rights to charge tenants a percentage of rent amount as commisions charges???
An appartment viewed 3 weeks earlier has increased by > 10% today, how come who governed this hiking in rent charges???? (i.e 1 B/R appartment was last month 40,500AED now the same appartment is AED43,500 ++???. Please RERA clarify this.
C.Fung Jan 25, 2012 12:39 pm
According to an article by staff reporter, Zaher Bitar,which appeared in the Gulf News last year, the RERA chief says that the maximum tenancy renewal fee is AED160, anything more is not legal.
deborah bellis Jan 25, 2012 12:03 pm
Only last night - friends of ours got scammed by a registered UK agent working in JLT - He wrote the cheques out to himself and asked my clients to sign - they didn't twig until they phoned me at 9.30pm . He has no POA and had the title deeds in the name of the LL and passport of the landlord .
After a few phone calls he got a bit angry until I told him I was a registered broker - He returned the cheques that were made out to him but told them they couldn't have the cash security deposit back - I rang him again and gave him 12 hours to return the cash in full otherwise I would advise them to call the police and DREI & RERA.Low and behold 9am this morning cash was returned in full .
The "agent" and I use that term loosely - is the MD for the company....
I wish there was a Name and shame policy here in Dubai _ he has been reported to RERA - but what will happen ? Seriously ?
There are some fabulous agents here in Dubai - It just takes thieves like this to give us all a bad name .
John Lethbridge Jan 25, 2012 08:59 am
'.......Freehold areas include Dubai Marina, Downtown and the Palm Jumeirah....'
Have I missed something? I thought freehold properties were still a 'promise' rather than a reality in the U.A.E. Can you own the land 'in perpetuity' or is it really just long leasehold?