Where you stand in Dubai with rent hikes, home insurance and more
Living away from your home country will undoubtedly raise questions about what you’re entitled to and what your status is as a resident. But whether you’re new to Dubai or are a long-term resident, brand-new laws affecting wills and assets, recent building fires and overseas voting issues being fiercely debated are throwing up more questions than ever before – so we sought out expert advice to help you know where you stand on the everyday stuff that matters.
Rent hikes Many of Dubai’s most sought-after neighbourhoods may have seen their rents cease rising for the past six months as the market continues to stablise, but some landlords are still determined to make the most from their investment. Anna Lucas, marketing manager at Property Finder UAE offers advice on legal rent increases. ‘Your landlord cannot raise your rent on a whim according to Decree No (43) of 2013. If he or she does, you can file a case with the Rent Committee based on Decree No (26) of 2013. An increase in rent must follow the Rent Index set by RERA. If your rent is up to ten percent less than the average rental value of similar units, your landlord cannot increase your rent. If your rent is 11-20 percent less than the average rent of similar properties in the area, the landlord can increase your rent by five percent, and your landlord can hike your rent by ten percent if your current rate is 20-30 percent lower than the going value. Use the rental calculator at www.dubailand.gov.ae to know how much your landlord can legally raise the rent by. Landlords must give you 90 days’ notice if they intend to raise the rent, and they must give 12 months’ written notice in the form of a notarised document or sent via registered mail if they wish to request an eviction.
If you want to negotiate a reduction in your rent, Keren Bobker, senior consultant at Holborn Assets LLC, says that to ask isn’t always to get. ‘A tenant can ask but the landlord is within their rights to ask what they want of a new tenant. The rules are very different for existing tenants, as RERA stipulates the level of increase and the period of notice. The landlord is under no obligation to accept a lower figure, but it does no harm to ask. Some landlords will agree a lower rent for fewer cheques and others may consider a reduction if it can be demonstrated that other similar properties are being rented for a lower figure.’
Home insurance Following the widely publicised fire at Dubai Marina’s The Torch tower earlier this year, insurers have saw a rise in the number of residents seeking property and contents coverage. It should hardly take an inferno to spur your decision, but reports after the blaze revealed that just six percent of UAE residents have home insurance, compared to 76 percent in the UK. Keren Bobker, senior consultant at Holborn Assets LLC, advises all residents, renters and owners to consider an insurance plan. ‘The owner of a property should insure the premises, but it’s not a bad idea for renters to check that cover is in place. If you’re unsure, ask the owner for proof and sight of a policy schedule. Owners are only responsible for the building structure, unless renting it furnished.
In the rare case of a homeowner not having building insurance and a fire occurring, the responsibility is with the owner unless the tenant is responsible for causing the fire. That would be a criminal case. Apartments are slightly different as there is usually one main policy for the whole building that all owners contribute to via service fees. Unless a villa is mortgaged then the owner does not have to insure it (but would be daft not to!) so that’s why it’s wise to check with a private landlord.
Both tenants and people living in their own property should certainly have contents insurance. If a landlord is renting a property unfurnished then the contents are the responsibility of the tenant alone. No landlord is expected to insure items that belong to their tenant.
Even just a few personal possessions could cost a surprising amount to replace. There are quite a few companies that offer contents cover and it is important to check the small print. Not all insurers cover accidental damage, for example. The cost will vary depending on the value of possessions and the size of your home but a basic plan with a low level of cover can start at just Dhs300 a year. When taking contents insurance, just check that the insurance company is aware the property is not owner-occupied. Most plans here are similar for either owner-occupiers or tenants, but make sure you understand what the plan actually covers and the cover limits.’
Ejari explained One of the legal requirements for tenants and landlords is to have their tenancy agreement registered with Ejari. The Arabic word for ‘my rent’, the Ejari system in Dubai was introduced to regulate the city’s real estate market and is the only piece of paperwork considered valid legal proof of address in Dubai, according to the government’s online registration portal. These days, you don’t just need your Ejari certificate to raise a rental dispute at the Dubai Land Department, but also to obtain and renew your family’s residence visa, get an internet or TV connection, obtain a business licence, employ domestic staff, get your water and electricity connected with DEWA and apply for a drinks licence. Gaining your Ejari is simple and can be done at one of Dubai’s many registered typing centres (Dhs195) or online at www.ejari-registration.ae (Dhs280).
Tenancy fees Anna Lucas at Property Finder UAE helps us get to grips with who pays for what when negotiating terms of a tenancy agreement.
‘The landlord is responsible for paying any service fees related to a property, however, as a tenant, you are responsible for paying a municipality tax of five percent of the annual rent, which is shown separately on your electricity bill. You may be required to pay a contribution of the air conditioning fees if the property is not set up to meter each unit individually. In this case the charges are normally made by the developer and not the utility provider. This varies from building to building so it’s important to clarify this with your agent before you sign any contract. Normally, your landlord should tell you whether you need to apply for Empower district-cooling services. Another thing to watch out for are housing fees, which might not always appear on your DEWA bill, so make sure you check this before it hits you all of a sudden.
When it comes to moving out and dealing with wear and tear repairs or repainting, there is no law that states a definite response to this. Unfortunately most landlords will want to repaint before putting the property back on the market. It is therefore better to have wear and tear removed from your contracts because the landlords will not accept receiving a property back that requires painting without using your deposit for this purpose.’