Dubai’s high population growth due to a high influx of expatriates yet limited opportunities for residential property ownership (that can lead to permanent residency) continues to fuel demand for rental properties across the city. According to an estimate, around 80 per cent of the total UAE’s residents live in rental apartments and villas. The growing presence of expatriates will continue to underpin a strong performance in the country’s rental segment, as well as further boost demand for rental properties.
After Expo 2020, Dubai rental property market has been performing optimally and rent hikes have become a constant topic among the residents around the country. The tenants are increasing in the city and so are the tenant-landlord disputes related to maintenance, tenant evacuation, deduction of the security deposit, rent calculation, and increase in monthly rentals.
We have asked Usman Asad, the Leasing Department Head at the leading real estate agency HFRE to give his insights on the important factors to consider before renting out a property in Dubai.
Q: RERA has a Rent Calculator. What is it for? How can tenants use it?
RERA Rent Calculator is a tool that helps tenants get an average market rent for the given area and calculate potential hikes in future rent. The data is periodically updated based on the data available from Ejari for different properties.
Q: What if a tenant is offered a rental property higher than the average rent in the market?
A tenant must conduct thorough market research before renting an apartment and even if a property is being offered at a higher rent, he/she can negotiate it and agree on a mutual figure. On renewal, the rental amount should be in line with the average rental index. Even still, if the tenant considers the rise unjustified, he/she can consult the Rental Dispute Settlement Centre to resolve the dispute.
Q: What are the must-haves that tenants should consider before renting an apartment?
There are a few things that a tenant must consider before deciding about a particular rental apartment in Dubai. The service charges must have been settled by the landlord before you move in. Property should be properly maintained before handing over to you. The property must be in liveable condition and must be cleaned before you move in. Make sure, the facilities available in the building are functional. Double-check your contract and see what services you can avail of from the landlord and building staff.
Q: What does the law say about the maintenance of a rental apartment in Dubai?
Maintenance (either major or minor) is the responsibility of the landlord, unless both the parties agree otherwise. In most developments, maintenance work is covered by the building management team but in case, the building’s management is not covering it, it will be the landlord’s responsibility, unless the tenant commits otherwise.
Q: What is the difference between a tenancy contract and Ejari?
A tenancy contract is a document signed by the landlord and tenant and after that, it must be registered with Ejari. It is crucial to register the tenancy contract with Ejari in order to make it a legally acceptable document in the country. Also make sure that the security deposit, contract duration and rental amounts are clearly mentioned in the Ejari.
Q: Is it true that landlords cannot increase rent in Dubai in the first three years? If not, when the rent can be increased?
No, it is not true that landlords cannot increase rent in the first three years. A rental increase is due at the end of each rental term and is applicable as per the RERA rental index. In most cases, rental terms are for one year and at the end of the term, it is at the discretion of the landlord to increase the rent or not and in either case, the tenant should be informed 90 days prior to the expiry of the lease term or unless agreed otherwise, at the beginning of lease term.
Q: What is the role of the Rental Dispute Resolution Centre in resolving disputes between a landlord and tenant?
Given the circumstance and to avoid litigation, it is always suggested to both parties to resolve the dispute themselves. In other cases, if it is impossible to reach a consensus, the tenant must approach Rental Dispute Resolution Centre with Ejari. (That is why, Ejari is of significant importance.) The authority helps resolve rental-related disputes usually within a few weeks.
The documents needed to file a complaint are:
- Emirates ID
- Original passport and visa
- Original rental contract
- Rental deposit receipt
Q: Do landlords have the right to deduct a certain amount from the security deposit, once the tenancy period is over?
The landlord can deduct a certain amount from the security deposit, in case of unpaid rent and for things agreed to in the contract including repairing, maintenance, and damage to the property. Generally, the landlords do not deduct money for deep cleaning or whitewash.
Q: Can a landlord ask the tenant to evict the rental property in Dubai on an immediate basis?
Generally, the landlord will have to notify the tenant to evict the property almost a year before the leasing contract ends. However, if a tenant is found damaging the original structure of the property, the landlord can ask the tenant to immediately evict the property, without a “statutory notice period”.
Dubai Land Department (DLD) has recently posted on its online platform on April 2, 2022 – in order to create rental awareness among tenants. According to that;
- If a tenant makes certain changes to the rental property, which is unsafe and is nearly impossible to restore the property to its original state through gross negligence, the landlord can ask the tenant to make an immediate eviction.
- In this case, the landlord will give notice to the tenant through a notary public or registered post of the necessity of eviction, while mentioning the reason.
- There will be no statutory notice period.
Q: Is there any hidden cost associated with rental amounts in Dubai?
Utility bills are usually not considered hidden costs in Dubai rental property market but once you move into an apartment or villa, you will have to pay a housing fee that applies to your water and electricity bill. It comes factored into your DEWA bills at the end of every month and is 5 per cent of annual rent.
Another hidden cost is that every time, you sign a rental contract – either new or renewal, you will have to pay the Ejari fee, which is approximately AED200. It is the registration fee of the premises online, imposed by RERA Dubai.
Other hidden costs are:
- Agency fee – For the first time, when the tenant finds the rental property.
- Security deposits
- DEWA connection activation charges
- Internet activation charges
Conclusion
These are a few important considerations that being a tenant you must consider to help complete the transition smoothly. Do you know HFRE has a rental home service, where a representative will get in touch with you after signing the rental contract and make you aware of all the permits and documents you need to swiftly move into the next property? Our team can also arrange these permits for you against a meagre amount.
All you need is to contact the team HFRE at +971 4876 2473 and discuss your plans and we will come up with a convenient solution for you along with a list of handpicked rental properties in Dubai, shortlisted as per your budget and other needs.
