Many people are still unaware of their rights as tenants in Dubai
24 June 2014| Last updated on 4 September 2017
Despite the stories in the local press and information given by the authorities and the Real Estate Regulatory Agency (RERA) with regards to the rental laws of the country, many people are still unaware of their rights as tenants in Dubai.
To make sure you have a firm understanding of the property laws in Dubai, and your rights as a tenant, here's the information and resources you need in order to safely rent and renew your rental agreement with your landlord or property agent in Dubai.
1. What you should know about real estate agencies
All real estate agents and agencies must be registered with RERA and listed on their broker’s list if this is not the case than the real estate agency or agent could be a fraudster out to get your money.
Always check if your broker is listed before any money changes hands. Furthermore, real estate agents are not entitled to charge a fee to show you around properties in Dubai. Their fee is paid once they have successfully rented the property to a tenant. That’s what the agent’s fees are for.
2. The costs involved in renting a property in Dubai
When you are renting a property in Dubai, it is important to be aware of the extra costs that you may incur over and above your rent.
Firstly, rent is paid with postdated cheques in Dubai. This means that the rent is paid in advance for the whole year. Some landlords will require the entire rental amount to be paid in one cheque, while others will allow for 2, 3, 4, 6 or 12 cheques. It is very rare to find a landlord who will allow for a monthly rent amount to be paid. You can also negotiate the number of cheques you will pay, however the rental price may increase with the number of cheques.
Secondly, you will have to pay the agents fee. This is not regulated by law as such but is usually 5% of the total lease amount or AED5000, whichever amount is higher. The agent will collect a fee from both the tenant and the landlord.
Thirdly, the tenant will have to, on top to the rent and fees, give a maintenance deposit. This is a refundable deposit, which the landlord will use in order to restore the property to what it was like before he rented it out to the tenant. This is usually 5% of the total rent amount. According to Article 20 of the law regulating the relationship between landlords and tenants (Law no. 26 of 2007):
Another additional cost is setting up your DEWA (Dubai Electricity and Water Authority) account. This will require a refundable deposit of AED 2,000 for apartments and from AED 4,000 for villas.
Finally, you will have to register with Ejari. This is the authority responsible for regulating the relationship between the landlord and the tenant and all rental contracts should be registered with Ejari. Registration costs AED 215.
3. Other things you need to know
Check the conditions of the property as the landlord is required to hand the property over to the tenant in working order. Most properties are rented before the DEWA is set up. It is important that your contract has a clause within it that will allow you a few days after you move in, to check that the AC and all water pipes are in good working order. If not, the landlord will be responsible for fixing these.
Before you sign the contract, ensure that there are no service fees outstanding. Once you have signed the rental agreement it is difficult to get the owners to pay the service fees and this could make life a little worse for you as lack of service fees generally means that the amenities lack maintenance.
Make sure that there is a title deed or Oqood on the property before you agree to rent it and part with your hard earned cash. Ensure that the name on the title deed and tenancy agreement are the same. If not, ask questions. You should be writing the cheques to the property owner and not a third party. Be aware of real estate fraud in the Emirate, it still exists despite the fact that authorities are clamping down on it.
Read your contract carefully before signing it. It is a binding document and you could sign away some of your rights and luxuries if you do not read it properly. Make sure that maintenance is included in the contract agreement. Usually the tenant pays for minor maintenance while the landlord takes care of the major maintenance. If the contract is in Arabic ask for it to be translated by a legal translator before signing. Do not rent on trust.
4. Rental increase at contract renewal
Article 9 of Law no. 33 of 2008 that amends some of the provision stipulated in the law regulating the relationship between landlords and tenants says that:
“The Committee shall specify the similar rent in accordance with the standards of specifying the rent increase percentage applied by the Agency and in accordance with the general economic circumstances in the Emirate, and pursuant to the property status the similar market rent in the same area and in accordance with any valid legislation in the Emirate regarding properties’ rent and any other factors the Committee may decide.”
In Dubai, rental increase is regulated by the rental increase calculator and can be increased only by the amount that the calculator stipulates. For example, if you are living in an area and your rent is well below the current market value, the landlord will be able to increase your rent.
CAUTION: Please note that rent cannot be increased by more than 20%, no matter how far below the market value you’re currently renting. Do not let your broker or real estate agent bully you into the rent increase. The law is on your side and the rental increase calculator stipulates the exact amount that your rent can be increased by.
If the landlord intends to increase your rent, he must let you know three months before the expiry of the contract and vice versa. You can amend the contract at any time before the contract expires, however both parties have to agree to the amendment. This is in accordance to Article 14:
5. The law governing eviction
Articles 25 and 26 of Law no. 33 of 2008 that amends some of the provision stipulated in the law regulating the relationship between landlords and tenants stipulate the terms of eviction.
1. Landlord may demand eviction of tenant prior to expiry of tenancy period in the following cases:
- a. If tenant fails to pay rent value, or part thereof, within thirty (30) days of landlord’s notification for payment; unless parties agreed otherwise
- b. If tenant subleases the property, or part thereof, without landlord’s written approval and in such case eviction shall be applicable to the tenant and the subtenant, and the subtenant’s right to refer to tenant for compensation shall be reserved.
- c. If tenant uses, or allows others to use, the property for illegal or immoral activities.
- d. If the leased property is a commercial shop and the tenant left the same without occupation and without legal reason for 30 continual days or 90 non-continual days in one year; unless the parties agreed otherwise.
- e. If tenant causes changes that endanger safety of the property in a way that it cannot be restored to its original condition or if he causes damage to the property intentionally or due to his gross negligence to take proper precautions or if he allows others to cause such damage.
- f. If tenant uses the property for purposes other than the purpose it was leased for or if he uses the property in a way that violates planning, building and land using regulations.
- g. If the property is in danger of collapse, provided that landlord must prove such condition by a technical report issued by Dubai Municipality or accredited by it.
- h. If tenant fails to observe legal obligations or tenancy contract conditions within 30 days from date of notification by landlord to abide by such obligations or conditions.
- i. If development requirements in the Emirate require demolition and reconstruction of the property in accordance with government authorities instructions.
And for the purpose of this clause (1) of this Article the landlord must notify the tenant through the Notary Public or by registered mail.
2. Landlord may demand eviction of tenant upon expiry of tenancy contract limited to the following cases:
- a. If the owner wishes to demolish the property for reconstruction or to add new, constructions that prevent tenant from benefiting from the leased property provided that necessary licenses are obtained.
- b. If the property requires renovation or comprehensive maintenance which cannot be executed while tenant is occupying the property, provided that a technical report issued by Dubai Municipality or accredited by it is to be submitted to this effect.
- c. If the owner of the property wishes to recover the property for use by him personally or by his next of kin of first degree provided that he proves that he does not own a suitable alternative property for that purpose.
- d. If the owner of the property wishes to sell the leased property.
And for the purpose of clause (2) of this Article, landlord must notify tenant with reasons for eviction at least twelve months prior to the determined date of eviction subject that such notice be sent through the Notary Public or by registered mail.
If the Committee decided for the landlord to recover the property for his own use, or use by his first degree next of kin pursuant to the provision of paragraph (c) of clause (2) of Article (25) of this Law, then landlord shall not rent the property to others for at least two years for residential properties and three years for non-residential properties from date of recovery of the property, unless the Committee decides less period for reasons considered by it, otherwise the tenant shall have the right to request the Committee to order proper compensation to him.
Finally Article 28 or Law no. 26 of 2007 protects the tenant from early eviction should the landlord decide to sell the property. “The transfer of title to a new landlord shall not affect tenant’s right to continue occupation of the premises in accordance with tenancy contract signed with the previous owner, provided that tenancy contract has fixed date.”