Based on availability and owners’ expectations, the rental market in Dubai has fluctuated considerably over the last 20 years. Rentals plummeted after 2008, but have been either rising or stable since. At present, there is an expectation that rentals could drop again.
Due to the instability of the situation, it is advisable to get as much current information as possible – and see as many properties as you have the energy for – before you make a decision. The Real Estate Regulatory Agency (RERA) is the Dubai Government department that deals with property ownership and rental in Dubai.
The creation of this organization has meant much better conditions for tenants, as long as you know your rights and demand them.
I don’t know about you, but I have definitely been guilty of signing documents without reading them thoroughly. I have trusted the agent, the lawyer, or the other party. The renter may be trustworthy, but in the UAE, you do need to know what the rental agreement you are signing stipulates.
The landlord cannot write in conditions that break the law, but as these laws are developing in Dubai, it may be possible to add some stingers that are not technically illegal – so read it closely and ask for clarification where necessary.
Also, keep in mind that the house or apartment will be insured, but your contents are your responsibility. Despite buildings being new, flood damage does occur due to leakages. The catastrophic fire in the ironically named Torch Tower in Jumeirah was a warning to all that there is plenty, even in a mostly concrete structure, that can burn fiercely.
Rental Payment Procedure
At times when rental properties are scarce, odd and possibly unscrupulous practices emerge despite the best efforts of the government. For example, in desirable areas, some property agents are requesting a deposit before they will show the property. This is not against the law, probably because no one has thought to regulate against it, but it is a sign that you are dealing with an unscrupulous property agent. If this happen, move on.
Landlords, however, can ask for a security deposit to cover any damage. It may be part of the agreement that a portion of this deposit will be used to cover repainting the property interior when you leave. This should be stipulated in the lease.
Also, landlords are entitled to request payment for the year in the form of signed, post-dated check. Some landlords request two checks, but you may be able to negotiate this upward. If you are caught with an obligation to pay in two hits, it is essential to budget for it.
In the past, a bounced check led to jail, which is not a sensible response – as someone in jail would find it near impossible to arrange funds. These days, there are regulations that cover the tenant defaulting on payment and take a much more humane view. In fact, it seems that sometimes it is the owner who suffers these days.
When property is plentiful, it is sometimes possible to negotiate and have the rental paid in four or six checks. Under these conditions, you are usually paying a little more overall, but it may be worth it.
Rent Increase Protection
There is a rent cap law in Dubai, but because this is all relatively new, it is malleable and subject to change by decree. The good news is that there are now laws considering the difficulties tenants faced in the past.
In 2007, there was a restriction on rent increases in the first two years of rental. That did not apply to the Dubai Financial District (DIFC) where rents could be increased at the end of the first year.
In 2013, a new decree was introduced to allow annual rent increases based on how low the current rental is in comparison to the average rental for a particular property in a particular area. If the property is assessed to be anywhere between 11% and 40% below market rental, your rent can increase annually on a sliding scale from 5% to 20% accordingly. This can be applied to the private and public sectors anywhere in Dubai.
There is a Dubai Government rent increase calculator available to give landlords and renters a guide for the coming year. How accurate it is I couldn’t say, but the Dubai Government has been developing all its online systems rapidly, so it is certainly a good starting point when considering what your rental situation could be in the coming year.
Currently, all landlords are required to give 90 days notice of a rent increase in writing.
A landlord cannot evict tenants without giving a year’s notice, and then only if the property is to be sold, rented, required for the landlord to occupy it personally, or for family members to occupy it.
This is another one of the welcome new real estate laws in the UAE. Previously, tenants could be evicted without any significant reason.
RERA has a rental disputes phone number and email address. However, not having used it, I cannot say how likely it is that you will get fast or efficient service.
I do know that when a dispute arises between an owner and a tenant, the resolution could be a lengthy and/or costly process.
It is preferable to avoid disputes if at all possible – and thanks to the increasing involvement of RERA, this is so for both the tenant and the owner. The balance of power is now much more eve, and some landlords would even say it has gone too far away from their favor.
Excess on Repairs
A rental lease may say nothing about responsibility for repairs. In such a case, the landlord is responsible. Some landlords, however, amend the lease to include an excess on repairs. The idea is that minor repairs are the preserve of the tenant. However, you may find you are responsible for repairs up to AED1000. In a country where the houses have been constructed rapidly using largely unskilled or semiskilled labor, repairs are common.
In addition, the desalinated water takes a toll on water heaters, so you could find that you are paying out AED1000 every year. Check the lease. If there is a high excess, try to negotiate the amount down to something more reasonable.
What is reasonable? Well, less than AED500.
Imagine this scenario: it is 40-50 degrees outside and the air-conditioning has broken down. You call a repair company. They can come the next day – already a disaster in that heat. They arrive at the appointed time, and after an hour the repair is complete. The house is cool and you are out of pocket AED400. Money well spent, perhaps, but what if this happens two or three times a year? Even in luxury villas, this is an accurate scenario.
Responsiveness in Terms of Repairs
The next scenario to consider is the one where the landlord is totally responsible for repairs. Sounds ideal, right?
What if the air conditioner is on the blink or you have no water, and the landlord or his/her representative is unresponsive. Being unresponsive is a powerful tool.
…Or perhaps the landlord answers the phone, but claims to be out of the country. No problem. Get it fixed, pay the bill, and it will be reimbursed…
Good luck with that one.
One of the great benefits of renting an apartment is that each apartment building has a watchman, and his job is to handle the repairs.
In cheap apartments, the watchman may be a little slow to respond, but in luxury apartments, the service is usually exemplary. I do not know anyone who has had to pay for their own repairs in a rented apartment, but even as I type this, I have just returned from a BBQ in a luxury villa where the tenant had to pay just over AED400 for air-conditioner repairs. Money well spent, but money the homeowner ought to be spending -not the tenant.